|Neutral Citation No.  NIMaster 15||Ref:||2013NIMaster15|
|Judgment: approved by the Court for handing down||Delivered:||22/03/2013|
|(subject to editorial corrections)*|
2. VICKY CLINT
"(3) Where the plaintiff claims delivery of possession the affidavit must show the circumstances under which the right to possession arises and, except where the Court in any case or class of case otherwise directs, the state of the account between the mortgagor and mortgage with particulars of –
(a) the amount of the advance;
(b) the amount of the periodic repayments and payments of interest required to be made;
(b)(b) the rate of interest payable –
(i) at the commencement of the mortgage;
(ii) at the commencement of the proceedings; and
(iii) at the date of the affidavit.
(c) the amount of any interest or instalments in arrears at the date of issue of the originating summons and at the date of the affidavit; and
(d) the amount remaining due under the mortgage."
"(1) Where by a mortgage of land which consists of or includes a dwelling-house, or by any agreement between the mortgagee under such a mortgage and the mortgagor, the mortgagor is entitled or is to be permitted to pay the principal sum secured by instalments or otherwise to defer payment of it in whole or in part, but provision is also made for earlier payment in the event of any default by the mortgagor or of a demand by the mortgagee or otherwise, then for the purposes of section 36 of the Administration of Justice Act 1970 (under which a court has power to delay giving a mortgagee possession of the mortgaged property so as to allow the mortgagor a reasonable time to pay any sums due under the mortgage) a court may treat as due under the mortgage on account of the principal sum secured and of interest on it only such amounts as the mortgagor would have expected to be required to pay if there had been no such provision for earlier payment.
(2) A court shall not exercise by virtue of subsection (1) above the powers conferred by section 36 of the Administration of Justice Act 1970 unless it appears to the court not only that the mortgagor is likely to be able within a reasonable period to pay any amounts regarded (in accordance with subsection (1) above) as due on account of the principal sum secured, together with the interest on those amounts, but also that he is likely to be able by the end of that period to pay any further amounts that he would have expected to be required to pay by then on account of that sum and of interest on it if there had been no such provision as is referred to in subsection (1) above for earlier payment. …"
"So, without seeking to construe the section at this stage, one can see that the intent of it was, in the case of instalment mortgages, to enable the court to defer possession if it was satisfied that there was a reasonable prospect of the mortgagor paying off, within a reasonable period, not the whole of the principal sum, but the outstanding instalments."
"So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with Convention (ECHR) rights."
"General provisions about interest
12.1 We will charge interest each day on the capital owing as the end of that day. The following terms explain how we work out the capital:
(a) any money we lend you will increase the capital from the date when we release the money to you (or the date when the money is transferred if we pay it by electronic transfer);
(b) any fees which we incur will increase the capital if they are not paid when due,
(c) any money we receive for the credit of your mortgage account will be used (after paying off any interest which is due for payment) to reduce the capital with immediate effect, except that, where the money is paid by cheque, it may not be used to reduce the capital unless the cheque has cleared;
(d) the interest we charge on capital each day during an interest period will be added to the capital on the first day of the following interest period (unless it has been paid off in the meantime)."
"3.7 'Capital' means any money on which we can charge you interest under Condition 12.1."
"Capital" is further defined in footnote 6 to that condition as:-
"The amount on which we charge you interest each day. Condition 12.1 explains how we work out the capital owing on your mortgage account".
"8.1 You agree to pay us the monthly payment at monthly intervals until you have repaid all the money you owe us.
8.7 We will work out the monthly payment so as to provide that:
(a) you pay interest only on any capital which is covered by an interest-only scheme; and
(b) any capital which is not covered by an interest-only scheme is repaid with interest by the end of the repayment period."
"13.1 We may change the monthly payment at any time by giving you notice. The change will come into effect on the date stated in the notice, which will not be earlier than the date when we give the notice.
13.2 We may change the monthly payment for any of the following reasons:
(g) if you have paid us less or more than is necessary to ensure that the money you owe us is repaid within the repayment period. ..."
"3.20 "money you owe us" means all the money you owe us under Part 1 of these conditions [which Part includes all of the conditions I quote in this judgment] and the offer, including any unpaid interest or fees".
(Emphasis by emboldenment supplied; that by underlining added.)
"As the Court emphasised in McCann ... , the loss of one's home is the most extreme form of interference with the right to respect for the home. Any person at risk of an interference of this magnitude should in principle be able to have the proportionality of the measure determined by an independent tribunal in light of the relevant principles under Article 8 of the Convention, notwithstanding that, under domestic law, his right to occupation has come to an end."
"A firm should ensure that its written policy and procedures include:
(f) repossessing the property only where all other reasonable attempts to resolve the position have failed."
In other words, possession is a matter of last resort, whether under a regulated or an unregulated mortgage contract.
Our Clients: David & Vicki Clint
You're Client: Santander (UK) Plc
Property at: 43 Demesne Crescent, Ballywalter, BT22 2NE
I refer to the above and to previous correspondence. As you will be aware this matter is listed for hearing on 5th April 2013 at 4.15 pm.
At a Chancery hearing on 7th September 2011, the Master suspended a Possession Order on the terms that our clients pay their contractual monthly instalment plus £50 per month towards arrears. Our clients felt that this was their best realistic proposal and felt it was sustainable in the long term. Mr Goodfellow of your offices objected to the suspension of the Order on the basis of the poor payment history and non-compliance with agreements in the past, he felt the arrears would not be cleared within a reasonable time and that the property was in negative equity. No reference was made to interest being levied on the arrears and added to the arrears balance on a monthly basis and, therefore, the proposal made did not reflect interest levied on arrears. Our client was of the belief that the £50 per month payment towards arrears would reduce their arrears balance.
Your instructed solicitor made an application for leave to enforce the Suspended Possession Order and Housing Rights Service agreed to assist Mr & Mrs Client at their hearing on 13th November 2012. We secured an adjournment to advise the clients comprehensively.
At the hearing on 14th December 2012 we made an application to reaffirm the terms of the previous Order so that our clients would make payments of contractual monthly instalment plus a sum of £50 per month towards arrears. It was at this hearing that we were informed that there was interest of £38.34 being levied on the arrears balance monthly.
Our clients were shocked at this development as they stated that it was the first time they were advised that interest on the arrears would have to be paid monthly in addition to the contractual monthly instalment plus a sum off arrears. They state that they were not advised of this at the time they entered into the Suspended Possession Order or at any time since.
The fact that interest is levied on and appears to be added to the arrears balance makes it impossible to calculate proposals to address arrears within the remaining term of the mortgage. A proposal to deal with arrears and associated interest based on the figures announced at court will not reflect the diminishing arrears balance, assuming regular payment towards arrears, nor will it reflect the diminishing interest on arrears. It is impossible for us to make accurate proposals to address arrears and interest levied on arrears as we do not have the software available to your client.
I would appreciate copies of all notifications sent to my clients advising them of the additional monthly payments required to cover interest on arrears.
I refer to the Mortgage (sic) Code of Business and in particular Section 13.3.3: The requirement in MCOB 13.3.1 R(2) for a written policy and procedures is intended to ensure that a firm has addressed the need for internal systems to deal fairly with any customer in financial difficulties. MCOB 13.3.1 R(2) does not oblige a firm to provide customers with a copy of the written policy and procedures. Nor, however, does it prevent a firm from providing customers with either these documents or a more customer-orientated version. Please forward a copy of the written policy and procedures.
In relation to MCOB 13.3.2 E(1)(a), customers:
(1) should be given a reasonable period of time to consider any proposals for payment that are put to them; in addition, and depending on the individual circumstances, a firm may wish to do one or more of the following with the agreement of the customer:
(a) extend the term of the regulated mortgage contract; or
(b) change the type of the regulated mortgage contract; or
(c) defer payment of interest due on the regulated mortgage contract or mortgage shortfall debt; or
(d) treat the payment shortfall as if it was part of the original amount borrowed;
(2) should be given adequate information to understand the implications of any proposed arrangement; one approach may be to provide information on the new terms in line with the requirements for annual statements (see MCOB 7.5.3 R).
Please outline your client's policy in relation to (1)(c) above.
I look forward to your reply by return in advance of the next hearing.
Housing Adviser (Debt)."
(Emphasis in second paragraph supplied; that in later paragraphs added.)
(a) a statement that interest on arrears has been added to arrears figures otherwise than by adding capitalised interest to the overall debt and re-formulating the contractual monthly payment accordingly;
(b) the duration of the remaining mortgage term;
(c) the rates of interest charged at the date of the suspended (or last variation) order and at the date of swearing;
(d) the state of account between the parties (as described in Order 88 rule 5(3) but omitting the rates of interest as therein specified and the arrears as at the issue of the originating summons) on the explicit basis of the plaintiff's present practice as to interest on arrears; but including also a statement disclosing how much of the stated "arrears" figure comprises accrued interest on arrears and statements of the total and monthly projected additions of interest on arrears of instalments if payment of such arrears had to be spread over the full remainder of the mortgage term;
(e) a like statement of account, but explicitly based on correct compliance with the relevant standard conditions and therefore omitting reference to interest on arrears and adding a statement confirming that this is so;
(f) the terms of payment in the suspended order (or the most recent variation thereof);
(g) particulars of payments which should have been and those which actually have been received since that order;
(h) the amount of the shortfall in payments under that order.