Lloyds Banking Group Plc v Burnley Borough Council
[2024] UKUT 20 (LC)
Bank of Scotland PLC v Burnley County Council
22 October 2024
[2024] UKUT 328 (LC)
Upper Tribunal
A council bought a house that was worth less than the mortgage. The homeowner didn't get involved, so a judge decided how much money the bank (which held the mortgage) should get. The judge agreed with the £35,000 the bank and council had already agreed on, plus extra money for interest and the bank's costs.
Key Facts
- •Compulsory purchase of 11 Kay Street, Padiham, Burnley.
- •Property subject to a mortgage held by Bank of Scotland PLC.
- •Mortgagor, Ms Plummer, did not participate in proceedings.
- •Property in disrepair; value significantly less than outstanding mortgage debt.
- •Parties agreed compensation of £35,000.
- •Tribunal determined the appropriate level of compensation under section 15 of the Compulsory Purchase Act 1965.
Legal Principles
Where a mortgaged property's value is less than the outstanding debt, and the mortgagor doesn't participate, the Tribunal determines compensation.
Compulsory Purchase Act 1965, section 15
The Tribunal must determine compensation even if the mortgagee and acquiring authority have reached an agreement, if the mortgagor is not involved.
Section 15(1), Compulsory Purchase Act 1965
Outcomes
Compensation of £35,000 awarded to Bank of Scotland PLC.
The Tribunal found the agreed compensation reflected market conditions, considering the property's condition and comparable sales. The mortgagor's non-participation triggered the Tribunal's jurisdiction under Section 15(1) of the Act.
Statutory interest payable from the vesting date (2 May 2023).
Confirmed by the authority in their response to the notice of claim.
Bank's reasonable costs of negotiating the compensation are also payable.
Confirmed by the authority in their response to the notice of claim.