Brighton & Hove City Council v Audus [2009] EWHC 340 (Ch) (26 February 2009)

Brighton & Hove City Council v Audus [2009] EWHC 340 (Ch) (26 February 2009)

The arrangement between Mr and Mrs Bull and Mr Audus was not in substance a mortgage or security transaction but a family arrangement whereby Mr Audus provided the purchase money for the flat on the basis that Mr and Mrs Bull could live there for life and he would ultimately become owner. The documents executed as...

Source-derived case information.

Citation
[2009] EWHC 340 (Ch)
Parties
Claimant: Brighton & Hove City Council; Defendant: Peter Audus
Jurisdiction
England and Wales
Judgment Date
26 February 2009
Procedural Posture
Chancery Division Civil Claim / Trial Judgment
Outcome
Claim dismissed
Legal Topics
Mortgages, Equity of Redemption, Clogs on Redemption, Constructive Trusts, Proprietary Estoppel, Land Registration Priorities
Property Law Equity Land Registration Mortgages Equity of Redemption Clogs on Redemption Constructive Trusts Proprietary Estoppel +1 more

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Parties

Brighton & Hove City Council

Claimant

Peter Audus

Defendant

Procedural Posture

Chancery Division Civil Claim / Trial Judgment

Legal Issues

  1. 1 Whether the second registered charge in favour of Mr Audus is void as a clog on the equity of redemption or otherwise unconscionable
  2. 2 Whether the arrangement between Mr and Mrs Bull and Mr Audus constituted a mortgage or a different equitable arrangement
  3. 3 Whether the Council's charge has priority over the second charge

Ratio Decidendi

The arrangement between Mr and Mrs Bull and Mr Audus was not in substance a mortgage or security transaction but a family arrangement whereby Mr Audus provided the purchase money for the flat on the basis that Mr and Mrs Bull could live there for life and he would ultimately become owner. The documents executed as charges did not reflect the true agreement and were not intended to create a loan or security interest. Therefore, the equitable rules relating to clogs on the equity of redemption do not apply. The second registered charge is not void as a clog, and the Council's charge does not have priority over it.

Court Disposition

Claim dismissed

Orders

  • The Council's claim for a declaration that the second registered charge is void is dismissed.
  • No order for rectification of the register is made.