Bank of Scotland Plc v Peter Lisney Hoskins & Anor
[2023] EWHC 306 (Ch)
Kirsty Amanda Mary Louise Cadogan v Kevin Andrew Cadogan & Ors
2 February 2024
[2024] EWHC 165 (Ch)
High Court
A sister got a court order to sell her brother's house to pay back money he owed her. The order said her costs came first, before the bank's mortgage. The bank didn't know about this until later. The judge changed the order, saying the bank's mortgage came first, but the sister could still get her costs back from her brother. It's a lesson about being clear with everyone involved in a court case, even those not directly named.
Key Facts
- •Bank of Scotland PLC (BOS) applied to vary an Order for Sale (OFS) prioritizing the claimant's costs of the claim over the mortgage.
- •The claimant, Kirsty, had obtained charging orders against her brother, Kevin, who owned the property.
- •The property was in negative equity due to mortgage arrears and a cladding issue.
- •Kirsty obtained possession and incurred costs managing the property, which she sought to include as costs of sale.
- •The OFS, modified from a standard form, prioritized Kirsty's claim costs, which was unknown to BOS until later.
Legal Principles
Variation of final orders: CPR 3.1(7), Tibbles v SIG plc [2012] 1 WLR 259.
CPR 3.1(7), Tibbles v SIG plc
Non-party intervention: CPR 40.9.
CPR 40.9
Rights of mortgagees and priorities: Fisher and Lightwoods Law of Mortgages, paragraph 55.33 to 55.38.
Fisher and Lightwoods Law of Mortgages
Application of proceeds of sale by mortgagee in possession: Section 105 Law of Property Act 1925.
Section 105 Law of Property Act 1925
Costs and expenses of sale: Parker-Tweedale v Dunbar Bank plc & ors (No2) 1991 Ch and Holder v Supperstone & Others [1999] EWHC Ch 189.
Parker-Tweedale v Dunbar Bank plc & ors (No2); Holder v Supperstone
Costs recoverable by mortgagee in possession: Cousins: The Law of Mortgages, 4th Edition, 32.22-32.24.
Cousins: The Law of Mortgages
Outcomes
BOS's application to vary the OFS succeeded.
The modification prioritizing Kirsty's claim costs over the mortgage was unjust to BOS, a non-party who lacked notice of the modification. The court held that while Kirsty could add her costs to her charge, they couldn't take priority over the mortgage. The delay in BOS's application was not unreasonable given the circumstances.
Kirsty's Sale Costs Application failed.
The disputed costs (insurance, bailiffs, clearance, repairs) were not costs of sale but costs of managing possession. Kirsty could add these to her charge against Kevin but not prioritize them over the mortgage.