Appeal Court case - Adamson v Halifax - Damages awarded to borrower for underselling : LUSENET : Repossession : One Thread

I thought this case might be of interest, it proves it's possible. The information is from CMS Cameron McKenna's Electronic Information Service:

In a recent Court of Appeal decision, a mortgage lender (the "Lender") was ordered to pay 6,000 in damages to a borrower in compensation for a breach of its duty to obtain the best price it reasonably could when selling a repossessed property (the property had been sold for 6,000 less than its market value).

In overturning the first instance decision, the court ordered that this should be paid to the claimant in full notwithstanding that the property was also subject to a charging order in favour of a second bank (the "Bank") for a judgment debt of nearly 5,000, because the Bank had made no attempt to pursue the claimant or the Lender.

At first instance, the claimant had only been awarded 1,000, as the trial Judge said that the remaining 5,000 would have been paid to the Bank pursuant to the charging order if the property had been sold for its full market value. The Judge considered that the claimant should not obtain a "windfall" of 5,000 because the Bank had taken no steps to recover their money and was now statute barred by limitation.

However on appeal, the Court of Appeal held that the full amount should have been paid to the claimant. There appeared to have been no likelihood of the Bank seeking to sue the Lender for the damage to its security caused by the low price obtained for the property. Even if the Judge had considered that there was such a risk, the proper course would have been to order that the money be paid into court, to be repaid to the claimant if the Bank did not bring an action within the statutory limitation period.

The information and opinions expressed in this document are not necessarily comprehensive and do not purport to give professional advice. If you would like specific advice please call your usual contact, at CMS Cameron McKenna.

Copyright (C) 2002 CMS Cameron McKenna. All rights reserved. May be reproduced in any medium for non-commercial purposes as long as attribution is given.

-- M Amos (, May 16, 2003


If anyone wants the full transcript of this case it's on: doc=/ew/cases/EWCA/Civ/2002/1134.html&query=Adamson%20v%20Halifax

One thing which caught my eye was: 13. Delay in issuing the proceedings can be a valid reason for reducing the period for which interest is awarded, though rarely, if at all, for depriving a successful party of all interest.

-- M Amos (, May 18, 2003.

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