Claims for Money Judgments
A Money judgment in addition to a claim for possession is simply a new remedy and not a new claim: Particulars of Claim can therefore be amended at any stage to include a Money Judgment.
Lloyds Bank Plc - v - Rogers (16th July 1999)
The Claimant Bank sought to amend the Particulars of Claim after the limitation period had expired to include a Money Judgment in addition to the claim for possession. Held: The amendment was allowed as:-
- it was a claim for a new remedy a new cause of action.
- alternatively, if it were a new claim, it arose out of the same or substantially the same facts as the possession claim and the Court would have been prepared to allow the amendments.
- It is seriously arguable that a mortgagee’s claim for the shortfall after he has repossessed and sold the security is in simple contract and therefore statute barred after 6 years.
John Hopkinson & Ors - v- Tupper (30th January 1997)
The question for the Court was whether all or a significant part of the money claim was statute barred. The Judge at first instance held that at least part of the claim was not statute barred because it was principal secured by a charge to which the Limitation Act 1980 section 20(1) applied a 12 year limitation period. However the part of the claim relating to interest was statute barred as it was outside the 6 year limitation period. The Court of Appeal held that it was seriously arguable that where a mortgagee had re-possessed and sold the security and was seeking to recover the shortfall (principal and interest) its claim was in simple contract. It did not matter if the claim for principal and interest was made under the mortgage deed, it was not for or in respect of a sum "secured by mortgage or other charges". Thus it was seriously arguable that all or most of the money claim was statute barred.
An all monies covenant to pay gives rise to a 12 year limitation period under Section 8(1) of the Limitation Act 1980.
Securum Finance Ltd – v- Ashton & Anr (10th June 1999)
The claimant brought proceedings (11 years after the mortgage was granted) on the covenant in the Mortgage for payment, possession, sale and foreclosure.
Held: The mortgage contained an all monies covenant to pay, which was subject to a 12 year limitation period under sections 8 and 20(1) of the Limitation Act 1980. Accordingly the Defendants were subject to a liability under the mortgage.
Default Interest
Contractual provisions which make the contractual interest rate chargeable on any unpaid interest before or after judgment are not unfair.
Director General of Fair Trading –v – First National Bank Plc (30th July 1999)
The Bank included in its Standard Form Loan Agreement a provision which in the case of default made interest at the contractual rate chargeable on any unpaid interest (as well as on the outstanding capital) after the Judgment as well as before until the Judgment was discharged by payment. The question for the Court was whether the provision for payment of interest on default were "core" provisions and if they were not, were the provisions unfair? Held: the provisions were not "core provisions" and accordingly it was open to the Director General of Fair Trading to show that the provisions were unfair. However it was not possible to categorise the provisions as inherently unfair because a borrower would not regard it as unfair to have to pay the contractual rate of interest, so long as the loan remained outstanding; he would have been surprised to discover that his obligations would be less onerous after a Judgment, in the absence of such a provision. Accordingly the Director General failed to show that the provisions were unfair or operated unfairly.
Further information
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