Da Rocha-Afodu & Anor v Mortgage Express Ltd & Anor

A mortgage term concerning goods left after possession should be construed purposively. A provision allowing removal, storage, disposal or return of goods gave the mortgagor a seven-day grace period. It did not impose an exclusive sequence requiring removal and storage before disposal.

A mortgagee in possession is an involuntary bailee and must do what is right and reasonable in all the circumstances. The standard remains fact-sensitive. The mortgage relationship does not create a separate, more exacting duty, although all relevant circumstances must be considered.

The appellants left personal chattels at their home after Mortgage Express Ltd enforced its security and obtained possession. They were given repeated warnings and access to collect their goods. The remaining goods were disposed of before a further arranged collection.

District Judge Langley dismissed claims for conversion and breach of the Mortgage Conditions 2000. She held that Mortgage Express had acted reasonably as an involuntary bailee. She also found the evidence insufficient to establish the claimed value of the chattels, allowing only a nominal alternative figure of £5,000.

The appellants appealed principally on the construction and effect of section 9 of the Mortgage Conditions.

1. Appeal dismissed. Section 9 of the Mortgage Conditions did not require the mortgagee to remove and store goods before disposing of them. Construed purposively, its principal function was to give the mortgagor a seven-day opportunity to remove goods before adverse steps were taken. The listed steps were optional and non-exclusive. Disposal could therefore follow the requisite period without prior storage.

2. The court rejected the submission that section 9 exhaustively defined the mortgagee's common-law duty. It supplied a framework and starting point, but the governing duty of an involuntary bailee remained to do what was right and reasonable in all the circumstances. That formulation was consistent with Elvin & Powell Ltd v Plummer Roddis Ltd [1933] Solicitors Journal 48 and the approach in Scotland v Solomon [2002] EWHC 1886.

3. There was no distinct heightened standard merely because a mortgagee could anticipate that chattels might be left following eviction. The categories of involuntary and gratuitous bailment need not be treated rigidly, but the relevant circumstances are considered in applying the same standard. The court explained the observation in Houghland v RR Low [1962] All ER 159 in that sense and treated Toor v Bassi as consistent with it.

4. On the judge's unchallenged findings, Mortgage Express had given warnings, permitted several collections and offered a house sitter. It was entitled to the conclusion that Mortgage Express had discharged its duty. The appellate court would not find that storage was the more reasonable course when its cost, location and duration had not been investigated at trial.

5. Quantum did not arise for decision. The court nevertheless observed that there is no rule requiring valuation by discounting replacement cost. The claimant must prove the chattels' value at the date of conversion.

• Court of Appeal (Civil Division): dismissed the appellants' appeal.
• Central London County Court (District Judge Langley, 19 January 2012): dismissed the claim for conversion and breach of the Mortgage Conditions 2000.