If there is no reasonable prospect of a mortgage debt being discharged within a reasonable time, the court can refuse to adjourn possession proceedings.
The Court of Appeal reaffirmed that this is the position in Cheval Bridging Finance Ltd v Hastings, Hastings and Bhasin. Following divorce, Mrs Bhasin agreed with the Hastings that they would pay off her mortgage, take over the legal title to her property and hold it on trust for her so she could live there rent free with the option to repurchase.
Although the refinancing took place, default occurred and the claimant sought possession, joining Bhasin in to the proceedings as a party. Bhasin commenced proceedings against the Hastings for breach of trust and fiduciary duty and unsuccessfully sought an adjournment of the possession proceedings.
Although Bhasin was successful in her claim against the Hastings and was awarded damages, those damages were not paid. Bhasin contended that an application for a stay of the proceedings ought to have been granted either under the court's inherent jurisdiction or under the court's case management powers, pending the outcome of her action against the Hastings.
The Court of Appeal held that it was academic whether the court had the power to stay the possession proceedings. Given that the Hastings had failed to pay any damages to Bhasin, the possibility of them discharging the mortgage debt within a reasonable time was remote and that was what the court had to consider.
Things to consider
The court will consider all the circumstances when deciding whether repayment can be made within a reasonable time. Litigation against another party may be relevant but, as this judgment shows, not if it will not assist with repayment of the arrears.