Land -> Mortgagee's and Remedies

Remedies available to a legal mortgagee (i.e. the bank):

1. Power of Sale.
2. Foreclosure.
3. Possession.
4. Appointing a receiver.
5. Personal Remedy of suing on Covenant to repay.

The first three are primarily concerned with recovering capital whereas the last two seek to recover interest.

Power of Sale

When does it Arise

The power for the mortgagee to sell the land is implied into every mortgage made by deed by Law of Property Act 1925 (LPA), s 101(1) and arises when the mortgage has become due on the contractual date of redemption.

When is the Power of Sale Exercisable?

However it’s not exercisable until one of the conditions are satisfied by LPA 1925,s 103:

1. You have given the mortgagor a notice requiring payment and the default has continued for 3 months after.
2. Some of the interest payable is at least two months in arrear.
3. There has been a breach of a covenant in the mortgage (other than non-payment) or some other provision of the LPA 1925.

Sale has the advantage over foreclosure that it’s not necessary to apply for a court order. However the mortgagee may be liable to the mortgagor for any loss caused through his negligence in conducting the sale.

Significance of its exercise on any other Mortgagees

Unless the mortgaged property is standing empty, the mortgagee will need to seek ‘an order for possession’ before sale. He is not obliged by law to do so, but he cannot evict the mortgagor by force, and the property will probably not be saleable unless the mortgagee can give vacant possession. The effect of sale is to vest the estate in land in the purchaser, free of the mortgage and any other mortgages of lower priority (LPA s. 104).

The two duties owed by the selling mortgagee

According to Salmon LJ in Cuckmere Brick v Mutual Finance a selling mortgagee owes certain duties, which were also re-emphasised in Silven v Royal Bank of Scotland:

1. Act in good faith: in order to obtain the best price possible. Otherwise the mortgagee will find himself liable to the mortgagor if he fails to do so. Which is why mortgagee's usually appoint a receiver to handle the sale as an agent, thereby limiting their liability (unless they're negligent in appointing the receiver).
2. Take reasonable care.

Mortgagee’s Responsibilities regarding proceeds of Sale

LPA s. 105 states all proceeds of sale must be paid in order of priority of the mortgages and any outstanding amounts can be claimed personally.

Foreclosure

When a borrower can not repay a load and the lender seeks to sell the property. The legal process by which the mortgagor’s equitable/statutory rights to redeem the property is terminated.

• Foreclosure can not be sought before contractual obligations to repay have been broken. (Williams v Morgan).
• A court order is required for foreclosure, its effect is to vest the mortgagors estate in the mortgagee in full settlement of debt (LPA 1925, 88(2) & 89(2)).
• If the property is worth more than the debt, the mortgagee is not liable to pay the difference to the mortgagor, which can be seen as being unfair to the mortgagor.
• On hearing the application for foreclosure the court will give the mortgagor a period to redeem the mortgage. However since the mortgagor is usually in financial difficulties and therefore unable to repay the load.
• Mortgagor has right to ask for an order for sale instead of foreclosure (LPA s.91(2)). ADVANTAGE: After sale the mortgagee can only keep the amount due while any remainder goes to the mortgagor or others entitled.
• DISADVANTAGE to Mortagor: Once an order for foreclosure has been given the case can be reopened and allow the mortgagor to redeem property (Campbell v Holyland) provided they meet the criteria: Speed of mortgagor’s application, reason for failure to redeem and nature of property. UNLESS the property has already been sold by the mortgagee.

Possession

Although the mortgagee has the right to possession, the mortgagee will not normally exercise that right where the borrower has not defaulted (exp Bignold). Although theoretically a mortgagee does not require a court order (Wade [1995]), very few will proceed without one as seen in Barclays Bank v Bird.

Land -> Mortgages

A mortgage of land is the conveyance/transfer of land made to secure future repayments of a loan. Thus the land is transferred to the lender subject to redemption… aka once you’ve paid up the loan the land is transferred back.

Mortgagor- Borrower in a mortgage (i.e. Some-guy).

Mortgagee- Lender in a mortgage (i.e. Bank).

Equitable Right of Redemption: a fundamental principle where the mortgagor is able to redeem the property early, however this is not an absolute rule a mortgagee can not always be allowed to redeem early (Knightsbridge v Byrne). The courts have struck down any attempt to ‘fetter the equity of redemption’ (Biggs v Hoddinott).

No clog on the equity of redemption: on redemption all mortgage obligations must be discharged. In Kreglinger v NewPatagonia Meat where a collateral advantage for the mortgagee maybe upheld where it does not prevent the mortgagor getting his land back. However any collateral provision that allows mortgagee an option to purchase the property as a clog and therefore void (Samuel v Jarrah Timber).

Interest rates on Mortgages: subject to the principle that equity will set aside a bargain which is oppressive/unconscionable (Cityland and Property v Dabrah).

Contract -> Offer and Acceptance

ANSWER STRUCTURE:

1. Has an offer been made? Was it specific and definite proposition of offerors intentions? Not an ITT, as adverts are usually ITT with few exceptions (Carlill v Carbolic Smoke Ball). Theres little difference between advertising goods in a shop window (Fisher v Bell) and other mediums of advertisement. As advertisements wording is usually too vague (Grainger & Son v Gough) they're considered ITT.

2. If it’s an offer, does the offeree accept unequivocally?
a) Does acceptance contain any new terms, if so it may be a counter-offer which would require the other party to accept (Hyde v Wrench). Although it is possible to accept an offer unequivocal while also making a colateral contract (Society of Lloyds v Twinn).
b) Silence rarely constitutes acceptance, unless offeree has argeed to that method of acceptance (Re Selectmove Ltd).
c) Has acceptance been authorised and communicated by offeree or agent (Powell v Lee).

3. Acceptance communicated effectively? Is acceptance effective on receipt or must it be read? Traditionally acceptance on receipt (Entores Ltd) as without hearing the message it has not been communicated effectively, but recently The Brimnes suggest receipt and intention of parties required: as an answer machine suggests delaying the actual time when communicated therefore a court could imploy the indeterminate time between the reeipt of a letter and it being read.
a) Has offeree used correct mode of communication? If alternative mode used acceptance may not be valid (Tinn v Hoffman).
b) Postal rule: postal acceptance is effective on posting, subject to reasonableness and express reservation contained in offer (Adam v Linsdale) even if lost delayed or destroyed.

4. When acceptance is deemed effective, is the offer still open?
a) Has the offer expired? Baring in mind this can also happen with the death of the offeror (Bradbury v Morgan).
b) Has offer been revoked? Effective anytime before acceptance, provided its communicated (Dickinson v Dodds).

N.B: Remember in the end conclusion the answer need not necessarily be definite. As these questions tend to focus on your analytical argument for both sides.

Contract -> An Offer

A contract may be defined as an agreement between two or more parties that is intended to be legally binding.

The first requisite of any contract is an agreement (consisting of an offer and acceptance). At least two parties are required; one of them, the offeror, makes an offer which the offeree, accepts.

The first stage in any contractual dispute is to establish if a contract actually exists. Which will depend on its formation, based on three key ingredients:

• Agreement: based on mutuality over terms, agreement exists when a valid acceptance follows a valid offer. An offer is simply a statement of willingness to be bound by the terms of an offer.
• Consideration: given by both sides, the quid pro quo, the proof that the bargain exists or “the price of the promise” (Dunlop v Selfridge) by doing some act.
• Intention to create legal relations: since contract is legally enforceable.

An offer is an expression of willingness to contract made with the intention that it shall become binding on the offeror as soon as it is accepted by the offeree.

A genuine offer is different from what is known as an "invitation to treat", ie where a party is merely inviting offers, which he is then free to accept or reject.

The following link will show a more detailed diagram.

Offer: a statement of willingness to be bound by the terms of the offer.

Consideration: given by both sides, the quid pro quo, the proof that the bargain exists and “the price of the promise” (Dunlop v Selfridge) by doing some act.

Acceptance: an unequivocal expression of intention to agree to the exact terms of the offer which is then communicated.

Invitation to treat: indication by the maker of willingness to receive offers (negotiations). ITT lacks the required intent and specificity to be an offer.

Public -> Judicial Review

“Principles of JR give effect to the rule of law. They ensure administrative decisions will be taken rationally in accordance with a fair procedure and within the powers conferred by Parliament” – Lord Hoffman.

JR not an appeal process; in finding a public body has exceeded its lawful authority; the court will not enquire into the subjective correctness of the decision but only into the process by which the decision was reached. JR procedure applies only to ‘public functions’ and when an issue of public law is in question, JR being an appropriate procedure (O’Reilly v Mackman (1982)).

Requirements:

(a) Leave: Apps for JR are made to Administrative Court (s31 Supreme Court Act (1981)) to filter out unmeritorious claims and made no later than 3 months after.

(b) Sufficient Interest: App must have ‘locus standi’ per s 31 in order to bring an action.

Grounds:

The GCHQ case identifies 3 heads for grounds on review:

(a) Illegality – narrow ultra vires – if a body acts outside their authority/jurisdiction (AG v Fulham Corporation).

An error in law: a mistake in legal interpretation leads to an error on the face of the record (Perilly v Tower Hamlets).

An error in fact: a mistake that leads to a critical error in decision making process a finding of fact that is totally unreasonable and lacking any evidential basis will be reviewable (R v Secretary of State for Home Department exp Khawaja).

Wide Ultra Vires: when a decision maker its within his powers but does so in a manner that abuses its discretion:

a) Acting for an improper purpose (World Development Movement case)

b) Taking irrelevant factors into account or leaving out relevant material (Bromley LBC v GLC).

c) Unauthorised delegation (R v Talbot)

Fettering Discretion: the decision maker has discretion, thus they should consider each case on its merits (BOC v Board of Trade).

(b) Irrationality/unreasonableness (Wednesbury unreasonableness)

When a decision maker comes to a decision that is so unreasonable no other body would have come to that decision. Or the decision is lawful but imposes conditions that are unreasonable (R v Hillington).

(c) Procedural Impropriety: failure to follow the correct procedure can invalidate a decision (Bradbury v Enfield LBC).

Natural Justice:

(a) a right to a hearing: Ridge v Baldwin HL concluded that an individual severely affected by a decision must be afforded an opportunity to hear and refute the case against them.

(b) Duty to give reasons: although there’s no strict duty to give a reason the courts however have held failure to give reasons may invalidate a decision if in order to have a fair hearing the applicant requires an explanation (R v Doody).

(c) Bias: A decision maker must act free from bias (impartially) i.e. financial interest no matter how small (Dime v Grand) or a member of an organisation party to the case (R v Bow Magistrates Court).

TEST FOR BIAS: Whether a ‘fair minded and informed observer would consider there is a real possibility or danger of bias’ (Porter v Magill).

(d) Legitimate Expectation: where a prior course of dealing with the decision maker leads to a reasonable legit expl on the part of the app regarding future decisions.

(e) Legal Representation: a right to be legally represented before the decision maker, criteria set out by R v Home Sec, Exp Tarrant:

1. Seriousness of charge & penalty.
2. A point of law likely to arise.
3. The capacity of the defendant to present their own case.
4. Complexity of procedure.
5. A need for reasonable speed in decision making.
6. Need for fairness between students and teachers.

(f) Cross-examination; oral hearings automatically carry a right to cross examine those who give evidence (Bullshell v Sec of State for Environment).

Remedies

Quashing Orders (certiorari) - such an order renders the original order invalid once grounds for finding it unlawful/irrational or procedurally improper have been found.

Mandatory orders (mandamus) – An order that compels a body to take action i.e. ordering a tribunal to hear a case that it has refused to deal with.

Prohibiting Orders (prohibition) – Prevents a body from making a decision that would be susceptible to a quashing order.

Tort -> Defamation Defences

Defences

• Justification (truth): The truth can never be defamatory but the burden will be on the defendant to prove the statement is true. Therefore the claimant has no right to complain about true statement which lowers his reputation. If there’s only a small part that can’t be proven but you have proved the main part then the defence of justification will still work (Alexander v North Eastern Railway). Intention on the defendant’s part is irrelevant (malice, public interest). Defence of justification failed in Wakley v Cooke as ‘liabelist journalist’ meant a habitual liabelist.
• Fair Comment: here the defendant is exercising a right to criticise the claimant, and does not have to show his comments are true (freedom of expression). The courts have to strike a balance between upholding a democratic right and protection of reputation. The defence can be used in one of the following ways:

a. The statement must be an opinion not fact: The defendant must be able to show that the words in question consist of a comment on a given set of facts, but not necessarily true but merely fair (London Artists v Littler).

b. Statement must be based upon true facts: or on statement made on a privileged occasion. Facts must be stated or implied (Kemsley v Foot).

c. In the public interest: if the defendants comments in the “public interest” or a matter submitted for public criticism (a book). In other words matters which affect people generally in which they are legitimately interested or concerned i.e. conduct of politicians (Seymour v Butterworth), closure of West End play (London Artists v Littler).

d. Fair and Honest: ‘Would any honest person, however prejudiced or obstinate their views, have held this view?’ (Turner v MGM). The judge will decide whether a hypothetical person could honestly express the commentators views on the assumption that he knew the facts accurately.

e. If the defendants comment was motivated by malice there can be no defence of Fair Comment. Therefore if it can be proved that malice was intent when making the comment and the defendant doesn’t really believe his comment … then he has no defence of fair comment.

Privilege

The third main defence. Here we consider an occasion when the public interest in freedom of expression overrides any concerns as to the effect of this freedom on the claimant’s reputation. This is subject to being able to show the court that the occasion falls within an established head of privilege:

Absolute privilege

Applied on occasions where the need to protect freedom of speech is so important as to create an absolute defence to any action for defamation irrespective of the authors motives. Usually applied to statements made in Parliament, in court and by certain officers of state. Possible 5 Occasions where it can be applied:

1. Statements in Parliament: Article 9 of the Bill of Rights 1688 states “the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament”. Thus allowing parliament autonomy and MPs freedom to criticise individuals as they feel appropriate. S13 of the Defamation Act 1996 allows an MP to waive privilege for the purpose of defamation hearings.
2. Reports, papers, votes and proceedings ordered to be published by either houses. By virtue of s 1 Parliamentary Papers Act 1840 statements in such documents are absolutely privileged… but not extracts or abstracts of these docs (but is covered by qualified privilege…see below).
3. Judicial Proceedings. To ensure a fair trial absolute privilege is therefore given to all oral and written statements made in the course of judicial proceedings. Privilege extends to judge, jury, advocates as well as parties and witnesses.
4. Reports of UK court proceedings: s14 of Defamation Act 1996 provides all fair and accurate reports of public proceedings in any court to have absolute privilege.
5. Communication between certain officers of state: Officers of state will perform their duties better if they are not acting under fear of litigation. CoA in Chatterton v Secretary of State for India held any judicial inquiry into such things will deprive officers of state of their freedom of action. But doesn't extend to civil servants or any officer below the rank of minister (Stacho v Fink).

Qualified Privilege

Qualified privilege operates only to protect statements which are made without malice. The judge must decide whether the situation is covered by qualified privilege. If so the jury must then decide whether the defendant acted in good faith or whether there was malice.

The following are protected by QP:

1. Statements made in pursuance of a legal, moral or social duty, but only if the party making the statement had an interest in communicating it and the recipient had an interest in receiving it.
2. Statements made in protection of an interest, eg public interests or the defendant's own interests in property, business or reputation
3. Fair and accurate reports of parliamentary proceedings.
4. Fair and accurate reports of public judicial proceedings in the UK, eg when the report is not published contemporaneously with the proceedings.
5. Statements privileged by s15 of the Defamation Act 1996, which applies to statements made in newspapers and radio and television broadcasts.

KEY CASE: Reynolds v Times Newspaper: HL held 10 matters were critical:

• Seriousness of allegations.
• Was it of public concern?
• The source of the information
• Whether steps were taken to verify it.
• The status of the information.
• The urgency of the issue.
• Whether comment was sought from the claimant.
• Were the claimants comments included in the article?
• Tone of the article.
• Circumstances & timing of publication.

Tort -> Defamation

“A statement which tends to lower the claimant in the estimation of right- thinking members of society generally” – Lord Atkin (Slim v Stretch).

In answering a question on defamation we must ask four main questions:

a) Is the statement defamatory?

b) Does it refer to the claimant?

c) Has it been published?

d) Does any of the defences apply?

Is the statement defamatory?

• ‘A statement which tends to lower the claimant in the estimation of right thinking member of society’ (Slim v Stretch) where the claimant is ‘shunned or avoided’ (Youssoupoff v MGM Pictures) as a result of the statement.

• Therefore the question is whether your reputation has been harmed in the eyes of ‘right-thinking members of society’… apply reasonable person test. Decided by Judge if capable of being defamatory, Jury will decide if it is defamatory and its hoped their views will reflect current trends in society.

• The defendant may be able to allege it was said in the heat of the moment (although this is a very fine line) and not meant to be taken seriously. The courts may disregard words spoken in the heat of the moment as mere abuse but not written words. Generally because the writer would have had time to cool off before choosing to publish it (Berkoff v Burchill).

Does it refer to the claimant?

• TEST: Would the reasonable person having knowledge of the circumstances understand the words to refer to the claimant?

• Needs not refer to the claimant by name; as seen in Morgan v Oldham Press HL – was reported a girl had been kidnapped by a dog-doping gang but had been staying with Mr Morgan. As people had seen them together the headlines implies he’s part of a dog-doping gang.
• Accidental defamation: in the case of Newstead v London Express Newspaper where a report said a Mr Newstead age 30 of Camberwell London was convicted of bigamy. Another Mr Newstead who also lived in London of the same age. CoA upheld his claim. The decision imposes a considerable burden on newspapers to check every story.
• Is it reasonable to expect a newspaper to bear the risk of a person being mistaken for another individual? (O’Shea v MGN)
• Group defamation: the statement relates to a group of individuals, therefore difficult to say the words refer to him directly. Unless the group has legal identity (company) and (i) the class is so small and claimant can establish statement must apply to every member. (ii) The claimant an show the statement refer to him directly. (Knuppfer v London Express Newspaper).

• THE TRUE TEST WAS: weather a reasonable jury could find that the article was capable of referring to the claimant?

Has it been published?

It is only harmful to a defendant’s reputation if the statement is published to a 3^rd party. Therefore insults made in private are not capable of harming a defendant’s reputation.

• TEST: if it is reasonably foreseeable that a 3^rd party would see the statement then the defendant will be liable. As used in Theaker v Richardson.

• It is still the rule that a husband does not publish words by telling them to his wife.

Slander & Libel

• While slander is considered temporary (words shouted across a room) Libel however is considered a more permanent and therefore deemed to be more serious. Damage is presumed and libel is therefore actionable per se (without proof of damage).
• Slander requires proof of special damage i.e. financial loss or any other loss capable of measure in financial terms i.e. being shunned by clients will suffice if statement impacts business (Storey v Challands) but shunning of friends will not.

• The loss must not be too remote, and the test for remoteness as stated in Lynch v Knight: “the loss is such as might fairly and reasonably on the facts of the case have been anticipated and feared to result”.