Eagle Star Insurance Company Ltd v Green & Anor

For a second-tier appeal, permission requires an important point of principle or practice, or another compelling reason.

Law of Property (Miscellaneous Provisions) Act 1989, section 2, governs contracts for the sale or other disposition of an interest in land. It does not govern the execution of a mortgage created by deed. A deed is a different legal instrument from an ordinary contract, and its validity is governed by the statutory provisions concerning deeds. Accordingly, the absence of the lender’s signature did not make the executed mortgage deed unenforceable. An authority concerning an informal equitable mortgage created by deposit of title deeds did not assist where the mortgage was created by deed.

Eagle Star obtained an order in Swansea County Court requiring Nigel Green and Yvonne Challis to give possession of their farm and pay the outstanding mortgage debt. The mortgage, executed in 1989, charged the farm and assigned an assurance policy to Eagle Star.

After the defendants’ defences were struck out, permission was granted for an appeal to Judge Jones, who rejected the argument that the mortgage failed to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Mr Green sought permission for a second-tier appeal to the Court of Appeal. The central issue was whether section 2 applied to a mortgage created by deed because the deed lacked a signature on behalf of the lender.

1. Permission refused. The proposed appeal did not raise an important point of principle or practice, nor was there another compelling reason to grant permission. There was no order for costs.
2. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 applies to a contract for the sale or other disposition of an interest in land. A mortgage may constitute a disposition for that purpose, so a contract to create a mortgage must comply with section 2.
3. Section 2 does not apply to a mortgage already created by deed. Section 1 of the 1989 Act deals with the formal requirements for deeds, while section 2 deals with contracts. The Act therefore recognises deeds and contracts as different legal instruments.
4. The mortgage in question was not a contract to create a mortgage. Mr Green and Miss Challis had executed a mortgage deed. The absence of a signature on behalf of Eagle Star did not prevent enforcement of the charging provisions in that deed.
5. United Bank of Kuwait Plc v Sahib [1997] Ch 107, also reported at [1996] 3 All ER 251, concerned an informal equitable mortgage by deposit of title deeds and involved no deed. It therefore did not assist the appellants. The other authorities relied upon added nothing material to that analysis.
6. The order for possession and payment made by His Honour Judge Jones was not shown to be susceptible to a successful appeal on the section 2 point. The remaining complaints, including arguments concerning the debt, documents and human rights, did not justify permission.

• Court of Appeal (Civil Division): refused permission for a second-tier appeal and made no order for costs.
• Swansea County Court: His Honour Judge Jones ordered possession of the farm and payment of the outstanding mortgage sum on 15 June 2001, after an earlier order striking out the defences.