Abbey National Plc v Bartholomew

Under section 36 of the Administration of Justice 1970, possession may be suspended or postponed only where the mortgagor is likely, within a reasonable period, to pay the sums due or remedy the default. The decision is discretionary. An appellate court should not interfere unless the discretion was exercised on wrong principles or on a misunderstanding of the facts. Failure to comply with earlier payment conditions, continuing default and prolonged delay may demonstrate that the statutory likelihood is absent. A proposed sale of the mortgaged property does not itself justify further suspension, and any dispute about the mortgage account may be pursued separately.

Abbey National sought possession of a mortgaged flat and judgment for the sums due after the borrower fell into arrears. The Ilford County Court made a possession order but suspended enforcement subject to payment of the arrears alongside the regular mortgage instalments. The borrower failed to maintain those payments. A later application for further suspension was dismissed by a District Judge, and His Honour Judge Platt dismissed the resulting appeal. The borrower then sought permission to appeal, relying on disputed redemption figures and proposed sales of the property. The central issues were whether the court could interfere with the discretionary refusal to suspend possession and whether those matters justified further relief.

Permission to appeal was refused.

1. The borrower remained in default. Abbey National therefore had a right to possession, subject to the discretionary power in section 36 of the Administration of Justice 1970. That power permits suspension or postponement for such period as the court thinks fit where the mortgagor is likely within a reasonable period to pay the sums due or remedy the breach.
2. The question whether possession should be suspended was uniquely a matter for the District Judges’ discretion. The County Court and the Court of Appeal could interfere only if the discretion had been exercised on wrong principles or upon a misunderstanding of the facts. No such error had been demonstrated.
3. The earlier suspension orders required payment of the regular monthly instalments and additional sums towards the arrears. Those payments had not been made, so the suspension lapsed. The prolonged duration of the proceedings and the continuing arrears supported the conclusion that the borrower was not likely to pay the mortgage instalments and arrears within a reasonable period.
4. The proposed sale of the flat did not alter that conclusion. If the property were sold for the highest available price, properly calculated redemption charges could be paid from the proceeds only if sufficient equity existed. A challenge to the mortgage account could be pursued by other available methods.

The application for permission to appeal was refused, and the order was: application for permission to appeal refused.

• Court of Appeal (Civil Division): Lord Justice Aldous refused permission to appeal because there was no realistic prospect of establishing an error in the discretionary decisions below.
• Ilford County Court: District Judge Rose made a money judgment and possession order, initially suspending enforcement subject to payment of arrears and regular instalments. Further applications were later made after the required payments were not maintained. District Judge Ostroff refused further suspension, and His Honour Judge Platt dismissed the appeal.