Judgement : Alliance & Leicester v Diane Reynolds - (Mortgage Shortfall)

[citizenB]

This judgment might be useful where there is a shortfall after a repo'd property has been sold.

 

In this case the lender took the ex-owner to court for it. It wasn't allowed as they'd already got a judgment for the money.

 

It may have been over 6 years old, but the lender was refused judgment as it was an abuse of process due to the money judgment when the property was repossessed.

 

Whilst County Courts Judgments do not set precedents, used properly it could be classed as persuasive.

 

 

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[citizenB]

http://www.consumeractiongroup.co.uk/forum/showthread.php?169002&p=4263633#post4263633

 

A County Court Judge in Warrington has ruled that the Alliance and Leicester could not succeed in their claim for an £20,000 shortfall from when the property was sold in 2002.

 

His Honour Judge Platts upheld a District Judge’s decision that the bank’s claim was an abuse of process and should be dismissed.

 

Back in 2001 the Court gave Alliance & Leicester a possession order and a judgment for the amounts due under the mortgage. The bank sold the property in 2002, but the sale did not raise sufficient funds to repay the mortgage in full, leaving a £20,000 shortfall.

 

Earlier this year, the bank brought a county court claim for the balance.

 

At a hearing in August, the District Judge threw out the bank's claim. The bank appealed.

 

Dismissing the bank’s request for permission to appeal, Judge Platts said that it was an abuse of process for the bank to bring a claim now when it already held a judgment for the mortgage debt.

 

“This decision will affect many cases all over the country” explained Nick Davis of Albinson Napier & Co, solicitor for Mrs Reynolds. “Banks often wait for many years before suing for a shortfall. Not all lenders asked for judgments when they obtained a possession order, but those who did will find that they cannot now bring a new court claim for any shortfall following sale of the property.”

 

The problem the banks face is that many of the original judgments are more than six years old, and therefore are very difficult to enforce.

 

 

 

Case details:

 

Alliance & Leicester Plc v Reynolds

 

Warrington County Court 14 November 2008.

Edited May 24, 2015 by caro