Repossession questioned by deeds not being signed

[bhall]

Ben,

 

See the definition of 'mortgage' - 'or' simply makes it easier to distinguish the different types of 'mortgage' and the different ways of creating the same effect:

 

(xvi)“Mortgage” includes any charge or lien on any property for securing money or money’s worth; “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage and “legal mortgagee” has a corresponding meaning; “mortgage money” means money or money’s worth secured by a mortgage; “mortgagor” includes any person from time to time deriving title under the original mortgagor or entitled to redeem a mortgage according to his estate interest or right in the mortgaged property; “mortgagee” includes a chargee by way of legal mortgage and any person from time to time deriving title under the original mortgagee; and “mortgagee in possession” is, for the purposes of this Act, a mortgagee who, in right of the mortgage, has entered into and is in possession of the mortgaged property; and “right of redemption” includes an option to repurchase only if the option in effect creates a right of redemption;

 

 

Apple

 

Apple read your own submission to the property chamber and what you said, in your own words

 

 

1) The applicant is the registered owner of the registered estate

2) It is submitted that the applicant had no legal power to create a mortgage by demise

3) contrary to a mortgage by demise a charge by way of legal mortgage is evinced when the borrower remains the owner of the estate

 

You said the applicant is the registered owner of the registered estate and then you say contrary to a mortgage by demise a charge by way of legal mortgage is evinced when the borrower remains the owner of the estate

[bhall]

Ben,

 

See the definition of 'mortgage' - 'or' simply makes it easier to distinguish the different types of 'mortgage' and the different ways of creating the same effect:

 

(xvi)“Mortgage” includes any charge or lien on any property for securing money or money’s worth; “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage and “legal mortgagee” has a corresponding meaning; “mortgage money” means money or money’s worth secured by a mortgage; “mortgagor” includes any person from time to time deriving title under the original mortgagor or entitled to redeem a mortgage according to his estate interest or right in the mortgaged property; “mortgagee” includes a chargee by way of legal mortgage and any person from time to time deriving title under the original mortgagee; and “mortgagee in possession” is, for the purposes of this Act, a mortgagee who, in right of the mortgage, has entered into and is in possession of the mortgaged property; and “right of redemption” includes an option to repurchase only if the option in effect creates a right of redemption;

 

 

Apple

 

The Law Commission would disagree with you

 

 

Two ways of creating a legal mortgage- demise or by charge - They have the same effect but s.23(1) only refers to one type being demise and the amendment to s.87 confirms that it does not apply to mortgage by legal charge

 

Read the explanatory notes at least

[bhall]

http://www.legislation.gov.uk/ukpga/2002/9/notes/division/4/3/1/1

 

55.This section states the unlimited powers of an owner. It makes one change to the current law. Under the existing law, there is a presumption that a registered charge takes effect as a charge by way of legal mortgage, unless there is clear provision to the contrary, or it is made or takes effect as a mortgage by demise or sub-demise. Mortgages by demise or sub-demise are now in practice obsolete, because of the advantages of a charge (that enables freeholds and leaseholds to be made the subject of a single charge rather than separate demises or sub-demises; the grant of a charge of a lease is not thought to amount to a breach of the common-form covenant against subletting without the landlord’s consent; and the form of legal charge is short and simple). Subsection (1)(a) therefore abolishes them, with prospective effect.

 

" Mortgages by demise or sub-demise are now in practice obsolete, because of the advantages of a charge " -"Subsection (1)(a) therefore abolishes them, with prospective effect."

 

23 Owner’s powers

 

(1)Owner’s powers in relation to a registered estate consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a mortgage by demise or sub-demise, and

 

Only mention of demise and sub-demise no mention of legal charge or even "things with the same effect"

[applecart]

Apple read your own submission to the property chamber and what you said, in your own words

 

 

1) The applicant is the registered owner of the registered estate

2) It is submitted that the applicant had no legal power to create a mortgage by demise

3) contrary to a mortgage by demise a charge by way of legal mortgage is evinced when the borrower remains the owner of the estate

 

You said the applicant is the registered owner of the registered estate and then you say contrary to a mortgage by demise a charge by way of legal mortgage is evinced when the borrower remains the owner of the estate

 

Ben,

 

The Borrower has NO STATUTORY POWER to grant any Lender a 'mortgage by demise' or 'sub-demise' or 'charge by way of Legal Mortgage' - FULL STOP.

 

You are going around in circles.

 

You are overstating a point that you will not and cannot win - why? - because the LAW says you will NOT WIN.

 

Leave this alone now Ben, and move on - you're doing my head in mate ; )

 

Apple

[bhall]

Ben,

 

The Borrower has NO STATUTORY POWER to grant any Lender a 'mortgage by demise' or 'sub-demise' or 'charge by way of Legal Mortgage' - FULL STOP.

 

You are going around in circles.

 

You are overstating a point that you will not and cannot win - why? - because the LAW says you will NOT WIN.

 

Leave this alone now Ben, and move on - you're doing my head in mate ; )

 

Apple

 

yes he does, the law confirms that a borrower does have the statutory power to grant a lender a charge by way of legal mortage

 

Read the law Apple

 

http://www.legislation.gov.uk/ukpga/2002/9/section/27

 

27 Dispositions required to be registered

 

(2)In the case of a registered estate, the following are the dispositions which are required to be completed by registration—

 

(f)the grant of a legal charge.

 

If Is It Me? relied on this, he would have been laughed out of the chamber

[Peterbard]

Lots and lots in the application and argument before the Chamber too - the Lender was DUMBSTRUCK - he had NO DEFENCE

 

I think you will find that Ben's posts imply that 'mortgage by demise' is unlawful but he reckons that a 'charge by way of legal mortgage' is OK - funny really when you look at the definition in LPA 1925 to see that they are all the same thing giving exactly the same effect hey??

 

Pretty much sums up Ben's understanding of property law really doesn't it?

 

I'm hopeful that Lenders will rely on Ben's interpretation and understanding though ; )

 

Apple

 

Great lets see this evidence you speak of.

 

I think it is the LRA that says that mortgages by way of charge are "OK" and those by demise are not

 

EDIT and everyone else of course

[bhall]

Your own submission to the Property Chamber confirms that is It Me?'s friend granted a charge by way of legal mortgage and not a mortgage by demise

 

"contrary to a mortgage by demise a charge by way of legal mortgage is evinced when the borrower remains the owner of the estate" - Your words

 

"The applicant is the registered owner of the registered estate" - Your words

 

* did the posts jump to the next page again ?

 

This is exactly as I have previously posted

 

One moment you say s.23(2) are the lenders powers and when it doesn't suit you, you say they are the borrowers powers

 

Here, one moment you say a mortgage by demise is different from a mortgage by legal charge and now you say they are the same

 

Lets see what the chamber has to say

[applecart]

yes he does, the law confirms that a borrower does have the statutory power to grant a lender a charge by way of legal mortage

 

Read the law Apple

 

http://www.legislation.gov.uk/ukpga/2002/9/section/27

 

27 Dispositions required to be registered

 

(2)In the case of a registered estate, the following are the dispositions which are required to be completed by registration—

 

(f)the grant of a legal charge.

 

If Is It Me? relied on this, he would have been laughed out of the chamber

 

Ben, Is It Me's friend is the Proprietor of a registered estate.

 

His friend is not the Proprietor of an unregistered estate.

 

Subsequently, he had no statutory power (note the word 'statutory') to grant a 'legal charge' by virtue of the LRA s.23 (1)(a)

 

Additionally, he had no statutory power (note the word 'statutory') to grant a Legal sub-mortgage by virtue of LRA s.23 (2)(b)

 

See the definitions in LRA s.23 (3)© and the LPA 1925 s.205 for assistance.

 

When you check them out, you will come to see (hopefully - but I doubt it) that non of what you are saying or looking to rely on will assist any Lender.

 

It was the Lender who was DUMBSTRUCK it was the Lender who was possibly laughed out of the Chamber - but, I doubt it - Borrowers tend not to be looking into this matter to laugh at anyone - for Borrowers this is a serious issue - not a score board.

 

Apple

[bigphil61]

I will answer for you all. It means that the charge was n longer effective on the estate it was erased , defunct gone.

Although how that helps the OP is a complete mystery to me anyway, because in that case the charge was a third part to the mortgage.

 

 

Hi Dodgeball, I really was hoping that I would get a response from the person I had directed the question to, as that's how it works in polite debates.

 

 

However, I do believe your observations about 'the charge' is the same as my interpretation! I note that you then went on to add 'the charge was a third part to a mortgage', not totally sure what you mean by that!

 

 

But;

 

 

If you mean that the case was complicated, then be assured I have read the whole case and I fully understand and agree with that observation.

 

 

If you meant that you don't understand what the OP's reliance on it is, then let me explain it to you from my interpretation of the case in just a few sentences;

 

 

The Garguilo's were cheated by associates of theirs, these associates then went on to mortgage the property with a lender (Lloyds Bank). The Adjudicator, having applied there 'interpretation' of statute & case law surrounding 'speciality contracts' made a decision that came to the same conclusion that you and I have just agreed upon, i.e. the deed is void and the charge falls away....

 

 

The OP and others reliance on case law in this instance is, a deed is a 'speciality contract' and as such the T&C's form part of that 'speciality contract', hence; no signature from both parties on either the deed or the T&C's, then no contract, no deed, and no charge! Therefore, nothing for the Lender to rely on....BP

[applecart]

Your own submission to the Property Chamber confirms that is It Me?'s friend granted a charge by way of legal mortgage and not a mortgage by demise

 

"contrary to a mortgage by demise a charge by way of legal mortgage is evinced when the borrower remains the owner of the estate" - Your words

 

"The applicant is the registered owner of the registered estate" - Your words

 

* did the posts jump to the next page again ?

 

This is exactly as I have previously posted

 

One moment you say s.23(2) are the lenders powers and when it doesn't suit you, you say they are the borrowers powers

 

Here, one moment you say a mortgage by demise is different from a mortgage by legal charge and now you say they are the same

 

Lets see what the chamber has to say

 

Ben, this is getting petty.

 

More beer garden than constructive debate.

 

I'll come back when it returns to Is It Me's thread.

 

Apple

[Peterbard]

Hi Dodgeball, I really was hoping that I would get a response from the person I had directed the question to, as that's how it works in polite debates.

 

 

However, I do believe your observations about 'the charge' is the same as my interpretation! I note that you then went on to add 'the charge was a third part to a mortgage', not totally sure what you mean by that!

 

 

But;

 

 

If you mean that the case was complicated, then be assured I have read the whole case and I fully understand and agree with that observation.

 

 

If you meant that you don't understand what the OP's reliance on it is, then let me explain it to you from my interpretation of the case in just a few sentences;

 

 

The Garguilo's were cheated by associates of theirs, these associates then went on to mortgage the property with a lender (Lloyds Bank). The Adjudicator, having applied there 'interpretation' of statute & case law surrounding 'speciality contracts' made a decision that came to the same conclusion that you and I have just agreed upon, i.e. the deed is void and the charge falls away....

 

 

The OP and others reliance on case law in this instance is, a deed is a 'speciality contract' and as such the T&C's form part of that 'speciality contract', hence; no signature from both parties on either the deed or the T&C's, then no contract, no deed, and no charge! Therefore, nothing for the Lender to rely on....BP

 

Yes I see what you are saying howeever a couple of points. Firstly it was the borrowers signature which was in question(or one of them)

 

Secondly Ellens question was relating to the enforceability options of the lender if a deed was proven to be void and therefore the charge drops away.

 

The point I was making is that the case you mention is complicated because the borrower is not the owner of the title of the estate, the deed which was not correctly executed was not the one with the lender for a loan it was with the title holder and gave him authority to apply for a secured loan, by giving him interest in the property.

 

When that fell away the interest in the property did also, so the problem as far as the lender is concerned is who do they sue ? Is it the fault of the borrower who after all had the money, or is it the fault of the owner who did not ensure that the security was properly made.

 

Of course none of this applies to the OP as they are the owner of the estate, IMO if the charge was not effective because for some reason the deed was wrongly made the agreement would still enable the lender to enforce through the judicial process and gain both a charging order and eventual possession.

[fletch70]

I think this is getting very silly. Immovable object and unstoppable force springs to mind.

 

Something that IIM said a few pages back but probably only a few minutes ago was that he has helped people and in 4 out of 4 cases the lender did not get what they wanted. I noticed he didn't say won or lost, maybe it was more time, maybe it was all part of the legal game that gets played but in essence there was nothing to show that anything really positive came out of the situation.

 

Not getting what you wanted is not automatically a loss.

[Peterbard]

Ben, this is getting petty.

 

More beer garden than constructive debate.

 

I'll come back when it returns to Is It Me's thread.

 

Apple

 

LOL

 

Why is it apple when Ben catches you with a faux pas, you want to go to the beer garden.

 

Alcohol is not the answer you know

[bigphil61]

Yes I see what you are saying howeever a couple of points. Firstly it was the borrowers signature which was in question(or one of them)

 

Secondly Ellens question was relating to the enforceability options of the lender if a deed was proven to be void and therefore the charge drops away.

 

The point I was making is that the case you mention is complicated because the borrower is not the owner of the title of the estate, the deed which was not correctly executed was not the one with the lender for a loan it was with the title holder and gave him authority to apply for a secured loan, by giving him interest in the property.

 

When that fell away the interest in the property did also, so the problem as far as the lender is concerned is who do they sue ? Is it the fault of the borrower who after all had the money, or is it the fault of the owner who did not ensure that the security was properly made.

 

Of course none of this applies to the OP as they are the owner of the estate, IMO if the charge was not effective because for some reason the deed was wrongly made the agreement would still enable the lender to enforce through the judicial process and gain both a charging order and eventual possession.

 

 

Hi Dodgeball,

 

 

I can see where your going with this, but;

 

 

The OP's application is much more straight forward than 'Garguilo' (i.e. no tri-party agreements to deal with), it comes down to just two parties involved, the borrower and the lender.

 

 

The principle relied upon from 'Garguilo' remains the same, if the deed is not executed by the lender and the T&C's are not signed by both parties to it and remembering were discussing 'speciality contracts' here, then their is no agreement, no deed and no charge that the Lender can rely on to secure any monies from the borrower.

 

 

All of this is easily rectified, for those who might be looking to seek a mortgage in the future, by the lender simply signing the 'Deed'...BP

[Peterbard]

Hi Dodgeball,

 

 

I can see where your going with this, but;

 

 

The OP's application is much more straight forward than 'Garguilo' (i.e. no tri-party agreements to deal with), it comes down to just two parties involved, the borrower and the lender.

 

 

The principle relied upon from 'Garguilo' remains the same, if the deed is not executed by the lender and the T&C's are not signed by both parties to it and remembering were discussing 'speciality contracts' here, then their is no agreement, no deed and no charge that the Lender can rely on to secure any monies from the borrower.

 

 

All of this is easily rectified, for those who might be looking to seek a mortgage in the future, by the lender simply signing the 'Deed'...BP

 

I think if you are arguring that the deed in the OPs case can be void in the same way as the case you mention you will be hard pressed.

 

A form for the creation of a mortgage under the LOPA and LRA is well documented and nowhere does it state that the signature of the lender should be present, this is the kind of agreement the OP has.

 

The agreement and the deed in the case mentioned was a different arrangement, and indeed the mismanagement of the paperwork was far more involved than just the lack of a signature.

[fletch70]

LOL

 

Alcohol is not the answer you know

 

Alcohol is ALWAYS the answer! hic

[bigphil61]

I think if you are arguring that the deed in the OPs case can be void in the same way as the case you mention you will be hard pressed.

 

A form for the creation of a mortgage under the LOPA and LRA is well documented and nowhere does it state that the signature of the lender should be present, this is the kind of agreement the OP has.

 

The agreement and the deed in the case mentioned was a different arrangement, and indeed the mismanagement of the paperwork was far more involved than just the lack of a signature.

 

 

Hi Dodgeball,

 

The Adjudicators decision is not in the public domain, so no idea what that decision is yet and I'd rather not speculate.

 

The word used for your benefit was 'Principle', I then pointed you at 'Garguilo' for 'Statute' and 'Case Law', I believe Case Law and Statute are 'Principles' that you informed us, you base your interpretations on, no?...BP

[Peterbard]

In addition Bp

The issue on which the court ruled that the deed was void was

 

Execution of the lease

The Adjudicator found:

1 the signature page and the plan were signed by the third party and that he did so knowingly and willingly. The Lease was therefore not a forged document.

2 As to section 1 (3) of the 1989 Act Mr and Mrs Garguilo submitted that even if the signatory pages of the Lease were, as found, executed separately and inserted into the Lease this invalidates the instrument as a matter of law.

Section 1 (3) provides

An instrument is validly executed as a deed by an individual if, and only if,

 

(a) it is signed -

(i) by him in the presence of a witness who attests his signature’

- See more at: http://www.commercialblawg.com/business-law/garguilo-v-jon-howard-gershinson-2-louisa-brooks-joint-fixed-charge-receivers-of-desmond-daniel-charles-moore/#sthash.oW16wmb5.dpuf

 

Which again applies to the borrowers(in the ops case) signature only, not the additional lenders signature.

[Peterbard]

 

The word used for your benefit was 'Principle', I then pointed you at 'Garguilo' for 'Statute' and 'Case Law', I believe Case Law and Statute are 'Principles' that you informed us, you base your interpretations on, no?...BP

 

Your right, i do , see above .

],

[bigphil61]

In addition Bp

The issue on which the court ruled that the deed was void was

 

Execution of the lease

The Adjudicator found:

1 the signature page and the plan were signed by the third party and that he did so knowingly and willingly. The Lease was therefore not a forged document.

2 As to section 1 (3) of the 1989 Act Mr and Mrs Garguilo submitted that even if the signatory pages of the Lease were, as found, executed separately and inserted into the Lease this invalidates the instrument as a matter of law.

Section 1 (3) provides

An instrument is validly executed as a deed by an individual if, and only if,

 

(a) it is signed -

(i) by him in the presence of a witness who attests his signature’

- See more at: http://www.commercialblawg.com/business-law/garguilo-v-jon-howard-gershinson-2-louisa-brooks-joint-fixed-charge-receivers-of-desmond-daniel-charles-moore/#sthash.oW16wmb5.dpuf

 

Which again applies to the borrowers(in the ops case) signature only, not the additional lenders signature.

 

 

Hi Dodgeball,

 

 

With respect, I explained exactly what, I believe, the OP would be relying on from 'Garguilo'. If for some reason your unable to interpret that, nevermind, let the debate move on....BP

[bhall]

I think for this part, we need to look at the actual legislation –

 

Firstly Schedule 2, Article 10(2) of the Regulatory Reform (Execution of Documents and Deeds) Order 2005

 

http://www.legislation.gov.uk/uksi/2005/1906/schedule/2/made

 

1989 c. 34. The Law of Property (Miscellaneous Provisions) Act 1989.

 

In section 1—

 

(a) in subsection (3)(b), the words from “by him” to the end;

(b) in subsection (5), the words “involving the disposition or creation of an interest in land”; and

© in subsection (6), the definition of “interest in land” and the word “and” preceding it.

 

Secondly, we need to look at s.1(3)(b) of the LP (MP) A 1989 – before and after it was amended.

 

Before

 

(3)An instrument is validly executed as a deed by an individual if, and only if—

 

(b)it is delivered as a deed by him or a person authorised to do so on his behalf.

 

After

 

(3) An instrument is validly executed as a deed by an individual if, and only if:

 

(b) it is delivered as a deed.

 

It is asserted by the application to the Property Chamber that the repeal of the words “by him or a person authorised to do so on his behalf” – have created a new obligation upon a lender to sign a mortgage deed.

 

However, if we look at both s.1(2) and (3) as amended by the RRO 2005, a very different picture emerges –

 

“(2) An instrument shall not be a deed unless:

 

(a) it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise); and

 

(b) it is validly executed as a deed:

 

(i) by that person or a person authorised to execute it in the name or on behalf of that person, or

 

(ii) by one or more of those parties or a person authorised to execute it in the name or on behalf of one or more of those parties

 

(2A) For the purposes of subsection (2)(a) above, an instrument shall not be taken to make it clear on its face that it is intended to be a deed merely because it is executed under seal.

 

(3) An instrument is validly executed as a deed by an individual if, and only if:

 

(a) it is signed:

 

(i) by him in the presence of a witness who attests the signature; or

 

(ii) at his direction and in his presence and the presence of two witnesses who each attest the signature; and

 

(b) it is delivered as a deed.”

 

 

If we use a mortgage deed as an example s.1(2) as amended confirms that

 

(a) A mortgage deed is not a mortgage deed unless it makes it clear on its face that it is intended to be a deed - it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise) – If we look at the Accord Mortgage Deed – we can see that it does make it clear on its face that it is a deed.

(b) (i) It is validity executed as a deed by the person making it– s.1(3) details the requirements for a valid execution of a deed – I will return to that topic in a moment.

 

So s.1(2) confirms that a deed must be validly executed by the person making it – It is the borrowers deed, as the borrower is granting a legal charge to the lender – so it must be validly executed by the borrower.

 

s.1(3) explains what the borrower as the person who is required to validly execute a deed must do.

It must be signed by him in the presence of a witness who must attest the signature and it must be delivered.

 

If delivery as asserted by the application to the property chamber is a statutory implied obligation on the Lender – Why does statue include delivery, as part of what is required by the borrower to validly execute the deed – resulting from the statutory requirements to make an instrument a deed ?

[bhall]

Remember s.1 which applies to deeds only requires

 

“(2) An instrument shall not be a deed unless:

 

(a) it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise); and

 

(b) it is validly executed as a deed:

 

(i) by that person or a person authorised to execute it in the name or on behalf of that person, or

 

(ii) by one or more of those parties or a person authorised to execute it in the name or on behalf of one or more of those parties

 

(2A) For the purposes of subsection (2)(a) above, an instrument shall not be taken to make it clear on its face that it is intended to be a deed merely because it is executed under seal.

 

(3) An instrument is validly executed as a deed by an individual if, and only if:

 

(a) it is signed:

 

(i) by him in the presence of a witness who attests the signature; or

 

(ii) at his direction and in his presence and the presence of two witnesses who each attest the signature; and

 

(b) it is delivered as a deed.

 

(ii) at his direction and in his presence and the presence of two witnesses who each attest the signature; and

 

(b) it is delivered as a deed.”

 

Nothing in s.2 applies to deeds unless it is also mentioned in s.1

[bigphil61]

Hi Dodgeball, In the hope that we can move this forward, what's your opinion on the following extract from the link you posted above:

 

 

Conclusion

The register was rectified by cancelling the lease and the charge. That no doubt has very serious consequences for the lender and ultimately may lead to various claims .

Whilst the factual background is rather complex this case serves a timely reminder to conveyancers and lenders as to basic principles . Ignore proper execution of deeds at your peril.

Of significant interest is the adjudicator’s use of section 131 (2) of the 2002 Act and the key as to who is in possession and thus who was entitled to apply for alteration. Indeed the land registry have now altered its practice note.

- See more at: http://www.commercialblawg.com/business-law/garguilo-v-jon-howard-gershinson-2-louisa-brooks-joint-fixed-charge-receivers-of-desmond-daniel-charles-moore/#sthash.oW16wmb5.Y9Jg1gDV.dpuf

[bhall]

before the RRO 2005 the legal position was confirmed by Eagle Star Insurance Company Ltd v Green & Anor [2001] EWCA Civ 1389 (8 August 2001) and as shown above, the RRO 2005 didn't make the changes suggested by this thread

 

 

12. So, says Mr Green, section 2 requires the signature of all the parties to a mortgage, being a contract for the disposition of an interesticon in land. He says that if you look at this mortgage at the end where the signatures appear it will be seen (on page 50 of Volume 1 of the bundles of documents) that there are the signatures of himself and Miss Challis, but there is no signature on behalf of Eagle Star. So, he submits, the mortgage of 8th November 1989 does not comply with the requirements of section 2 of the 1989 Act, which by then had come into force. He made it clear that it is not disputed that he owes money to Eagle Star, but there is a dispute about the precise amount. He emphasised that he has been regularly paying monthly payments to Eagle Star, though he accepts there are arrears. He says that the effect of applying section 2 to the mortgage of 8th November 1988 is that it is unenforceable. That means that the Eagle Star company are not entitled to obtain the order for possession which it obtained from His Honour Judge Jones. He emphasised a number of times during his submissions that without the signature of someone on behalf of Eagle Star the mortgage is not a full and complete legal document and so they are not entitled to enforce the charging provisions in it against him.

 

13.Mr Green referred to some passages in the report of the Law Commission which led to the bill enacted in the 1989 Act. He referred to passages in the Law Commission Paper No.164, in particular 4.5, 4.6 and 4.8. He also referred to a number of authorities. I think the most important of these (because it was concerned with a mortgage, while the other cases he referred to concerned contracts for the sale of land) was United Bank of Kuwait Plc v Sahib [1997] Ch at 107. I have been supplied with a copy in [1996] 3 All ER 251. That is an important case. It decided that the requirements contained in section 2 of the 1989 Act to the effect that a contract for the sale or other disposition in land must be in writing in a single document incorporating all the terms and signed by the parties, abolished the rule that a mere deposit of title deeds relating to property by way of security created a mortgage or charge. Following the 1989 Act the rule had changed. There had to be a written document, not merely a deposit of title deeds by way of security in order to create a mortgage or charge.

 

14.Mr Green relied on that for the proposition that the same should apply to this case because there was, in this case, within the mortgage deed a contract by him in the form of the covenant to repay. There were also contractual provisions or covenants by Eagle Star. So, he said, if the mortgage in United Bank of Kuwait v Sahib was governed by section 2 of the 1989 Act, so should this mortgage with similar results for its enforceability.

 

15.In my judgment this argument does not stand any real prospect of success. This is not a case of a contract: it is a case of a deed. If we were simply dealing with a contract to create a mortgage then Mr Green would be right. But in this case he and Miss Challis have actually executed a deed. It is clear from the provisions of the 1989 Act itself that a distinction is drawn between the formal requirements affecting the execution of deeds and the formal requirements governing contracts. Section 1 makes alterations to the law about the execution of deeds. For example, they are no longer required to be written on any particular kind of substance and a seal is not required for the valid execution of an instrument as a deed by an individual. There are a number of detailed provisions in section 1 relating to deeds. Section 2 does not apply to deeds; it applies to contracts. It may be a contract for the sale of land, it may be a contract for some other kind of disposition of an interest in land, one other kind of disposition being a transfer by way of security over what is commonly called a mortgage or charge.

[Peterbard]

Hi Dodgeball, In the hope that we can move this forward, what's your opinion on the following extract from the link you posted above:

 

 

Conclusion

The register was rectified by cancelling the lease and the charge. That no doubt has very serious consequences for the lender and ultimately may lead to various claims .

Whilst the factual background is rather complex this case serves a timely reminder to conveyancers and lenders as to basic principles . Ignore proper execution of deeds at your peril.

Of significant interest is the adjudicator’s use of section 131 (2) of the 2002 Act and the key as to who is in possession and thus who was entitled to apply for alteration. Indeed the land registry have now altered its practice note.

- See more at: http://www.commercialblawg.com/business-law/garguilo-v-jon-howard-gershinson-2-louisa-brooks-joint-fixed-charge-receivers-of-desmond-daniel-charles-moore/#sthash.oW16wmb5.Y9Jg1gDV.dpuf

 

I am not sure what you mean by"move this forward", I had no idea we had stalled.

 

Anyway the quote refers to this particular case relates to possession and the charged estate, of no relevance to the OPs situation