Angel Solicitors (a firm) v Jenkins O'Dowd & Barth (a firm)

A solicitor’s undertaking to redeem or discharge a mortgage requires payment of the sum needed to secure redemption when performance is sought, including later advances secured by the mortgage. The court cannot substitute an earlier, lower figure or interfere with the mortgagee’s contractual and equitable rights. Summary enforcement is appropriate where the undertaking is undisputed, there is no real prospect of defence and no other reason for a trial. Exceptionally, if a mortgagee demands a wholly unreasonable sum, the court may refuse enforcement and award compensation instead. Delay caused by the solicitor’s breach does not improve the solicitor’s position.

The claimant solicitors acted for purchasers in three residential property sales. The defendant solicitors acted for the sellers and gave undertakings to redeem existing mortgages and provide discharges. The undertakings were not performed, and the claimant sought summary enforcement.

The defendants argued that the court should determine what the mortgagees would have accepted in 2007, before the undertakings were breached, and should join the mortgagees and one seller to the proceedings. The central issues were whether an inquiry into historic redemption figures was required, whether the mortgagees should be joined, and whether summary judgment was appropriate.

1. The court allowed the claimant’s application for summary judgment. The defendant solicitors accepted that appropriate undertakings had been given and had no real prospect of successfully defending the claim.

2. The purpose of the undertakings was to secure the discharge of the mortgages over the properties. That purpose could be achieved only by paying the sums required by the mortgagees when redemption was sought. The court therefore rejected the argument that the relevant sums should be assessed by reference to what the mortgagees might have accepted in 2007.

3. The court had no jurisdiction, in law or equity, to interfere with the contractual and equitable rights of the mortgagees by imposing an earlier or lower redemption figure. Any increase caused by delay was unfortunate for the defendants or their insurers, but did not affect the purchasers’ rights or the mortgagees’ entitlements.

4. The court distinguished Fox (John) v Bannister, King & Rigbeys, because that case concerned an undertaking to retain money as a potential source of payment for a disputed liability. That undertaking had become incapable of performance, so an inquiry into loss was appropriate. The present undertakings required a particular result: discharge of the mortgages.

5. The judge stated obiter that summary enforcement might be refused, or an existing order discharged in favour of compensation, if a mortgagee demanded a sum considerably exceeding both what could reasonably have been contemplated when the undertaking was given and the property’s current unencumbered market value. That situation did not arise here.

6. There was no relevant dispute with Barclays or Close and no basis for joining either under CPR 19.2(2). The application to join Ellenwell was also dismissed because any claim against it should be brought separately under CPR Part 7.

First instance decision. The judgment does not state any subsequent appellate history.