more 6 yr/12 yr case law : LUSENET : Repossession : One Thread

Can anyone give me any more details about Scottish Equitable plc v Thompson, a county court case heard in Central London 10 April 2002? I've only found a very brief note on it; a mortgage shortfall case where the limit was judged to be 6 years rather than 12 because the charge (ie the mortgage deed?) contains no covenant to repay the principal sum, as it was envisaged it would be covered by an insurance policy. Surely this has profound implications for shortfall debt based on endowment mortgages?

-- Melody (, August 18, 2002


Hi there

I suspect that the CA decision means that it doesn't matter whether the promise to repay was included as a covenant or not.

As s.20 was held to apply to principal, my feeling is that the 12 years under s.20(1) will apply to all loans that were secured by mortgage or legal charge (with a 6 year limit for interest under s.20 (5)). If the decision had been based on the 12 years for a specialty under s.8, the fact that some or all of the terms and conditions were not contained in a document under seal (i.e were not under a covenant) things might be different. But the court found that s.20 applied and not s.8.

Anyone have any other thoughts?

All the best


-- Guy Skipwith (, August 19, 2002.

Still trying to get a copy of the judgement...will think out loud (for what it's when I've read it.

-- Too scared to say (, August 19, 2002.

Hi again

I have been thinking about the point you raised again.

The CA decision in Bartlett appears to apply to any action to recover any capital secured by a mortgage which existed when the right to recover the money accrued (para 31).

However, the CA also held that the cause of action arose from the borrower's default under the terms of the deed (para 28). From this it could perhaps be implied that where default is not under the deed but under a simple contract, the position may be different.

However, CA also said that the mortgage deed and any underlying contract merged, at least to the extent of the indebtedness which existed at the date of the loan (para 22).

I still feel that s.20 probably does apply to secured loans where the terms regarding repayment are in a contract rather than in the mortgage deed, but it is not totally clear that this is the case.


PS I have a copy of the uncorrected judgment but only in hard copy and not emailable.

-- Guy Skipwith (, August 19, 2002.

Moderation questions? read the FAQ