Western Bank v Schindler [1977] Ch 1

Court of Appeal

Basic Facts : Defective mortgage terms meant D did not need to pay interest until nine years later. Western Bank sought possession despite no arrears.

Issue for the Court : Are arrears necessary for the application of s.36 and s.8 of the Administration Justice Act (AJA 1970 + 1973)?

Held :The court reaffirmed that a mortgagee must act fairly and reasonably when exercising power of sale.

Held Buckley LJ

• Possession can be sought by a mortgagee for security purposes, not just for arrears.

• s.36 applies to possession claims irrespective of arrears, but the discretion is limited by whether there is default.

Held Scarman LJ

• Courts have discretion to delay possession orders even without default, depending on the circumstances and intentions of the parties.

Held Goff LJ

• s.36 applies only in default situations, and it would be unusual to seek possession without arrears.