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Exquisite irony

By J

Zinda v Bank of Scotland [2011] EWCA Civ 706

In short, as you all know, the combined effect of ss.36 and 8, Administration of Justice Acts 1970 and 1973 is to allow a court hearing a claim for possession based on mortgage arrears, to, amongst other things, make suspended possession orders. The usual form of order is usually expressed as “CMI plus £x per month”, so as to ensure that the current monthly installments are paid, together with a sum to pay off the arrears over time.

The actual form of order is an N31. That provides that the order is suspended so long as the occupier pays £X off the arrears (e.g. £10 pcm) “in addition” to any future instalments under the mortgage. In Zinda, an SPO had been made in 2005, and provided, in the usual way, for the arrears to be paid off by instalments over a 9.5 year period, together with the CMI. In 2008, the bank capitalised the arrears which, in practical terms, had the effect of wiping them out (since, obviously, if they’ve been consolidated into the main debt, they’re not arrears any more). Sadly, however, in due course, Mr Zinda then failed to make other payments due under the mortgage (i.e. missed his CMI) and the bank issued a warrant.

Mr Zinda sought to stay the warrant on the basis that, in effect, by capitalising the arrears (and wiping them out) the original possession order had somehow become unenforceable. His argument failed before the DJ and on appeal to the CJ, both of whom pointed out that, for the suspension to remain in force, he had to pay both the arrears AND the CMI. The failure to pay the latter meant that, even though the former was now irrelevant, the suspension had lapsed.

Undeterred, Mr Zinda appealed to the Court of Appeal, who dismissed his appeal, essentially for the same reasons that the county court judges had given. A form N31 order requires both the CMI and the arrears instalments to be paid, otherwise the suspension ceased.

The reference to exquisite irony? See para. 39. Mr Zinda argued that the effect of this judgment was to re-write his mortgage and interfere with his freedom of contract, which is the cornerstone of free market libertarianism. His authority for this proposition was Lochner v New York (1905) 198 US 45 (a rather controversial, and largely now superseded, US Supreme Court decision in which it was held that a law regulating the working hours of bakers was unconstitional as an unnecessary interference with freedom of contract: see here. For those who are really keen, buy and read this book). Of course, as Munby LJ pointed out, applying such an approach, the Administration of Justice Acts would be unconstitutional and Mr Zinda would have no right to remain in occupation at all.


J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.


  1. kjetilniki

    I trust all duty solicitors will now ask [when a routine suspended order is made] for the judge to make an order

    for possession in [28] days

    and to order that

    the order [for possession] is not to be enforced so long as the defendant pays arrears of £y by monthly instalments of £z per month in addition to those current instalments under the mortgage that fall due hereafter while the arrears remain unpaid.
    the order is not to be enforced once the arrears and the said instalments are paid

    Admin J 1970 s36
    Has anyone ever seen any senior court authority on why the court should not routinely order adjournment while pay cmi + £x rather than an SPO on cmi +£x?

  2. Ben Reeve-Lewis

    A worrying case given how many SPOs get granted

    @kjetilniki I always ask for an adjournment but with only a 50% success rate. What I am usually seeking is time to negotiate (which despite the pre action protocol and MCOBs lenders still fail to do) and what I am finding lately is judges giving the SPO to keep the banks happy and the time to us happy.

    I have had some success where there are joint mortgages and 1 party didnt turn up at the original hearing, in getting the order set aside and in one case where the borrower did attend and the lenders solicitor tried to block the application under CPR 39.3 and judge was so furious at the bank’s failure to negotiate that he dismissed their blocking point completely, saying “I’m not interested”

  3. J

    Is it really that bad? You’re obliged to pay the instalments come what may, so why shouldn’t a suspension be conditional on making those payments? I don’t anticipate there being any interest in the county courts now producing new, bespoke, possession orders.

    Entirely agree on the merits of an adjournment on terms though and one that I do know of courts going for

  4. Ben Reeve-Lewis

    Yes J. It really is that bad.

    I have been doing mortgage repo work for slightly over 2 years now and in 99% of cases the lenders have not followed either the pre-action protocol or the Mortgage Conduct of Business Rules.

    I have known lenders:-
    routinely use repossesion before looking into alternative methods of forbearance, As recorded in Paragraph 4 of the FSA’s Mortgage Market Review 2010.
    Drag cases into court for outright possession where there are less than £2,000 of arrears and well in excess of £50,000 worth of equity.
    Obstruct a court hearing on the basis of a client paying the full CMI plus well in excess of the Norgan figure once she had obtained work that would clear the arrears.
    Through their lawyer hide a second income from the courts to justify an outright possession claim.
    Staff at a lender refuse to give me their name when I called – for which the DJ read the riot act.
    And in the case of 1 well known high street lender flatly refuse to give me the contact number of their legal department so I could discuss an impending case

  5. J

    Sorry, I wasn’t entirely clear. I too know of plenty of cases where lenders have behaved terribly at all stages of the process (from improper selling techniques through to even consider negotiating terms of re-payment) and I particularly enjoy fighting mortgage companies. What I meant was that I don’t see what is objectionable per se about requiring someone to comply with their contractual obligations as a condition of suspension. There are (many) other areas of mortgage work where I’d rather focus my fire

  6. Ben Reeve Lewis

    Sorry J. I see your point now, and like you I enjoy pulling the lender’s case apart But I do think the conditional SPO is important. I hate to think that people get saved in the 11th hour only to find themselves back again a couple of years later.

    Have you had any experience challenging on the new strengthened pre action protocol? I wonder how the court are going to react to it. Fluff a technical error and get struck out? That’s what I’m hoping.

    • J

      A colleague of mine was doing a case for me on Friday about this – we were asking for it to be adjourned generally until they complied with the protocol and, in particular, gave us reasons why they’d refused to negotiate with us. No idea what happened yet. I expect I’ll find out on Monday

  7. Ben Reeve Lewis

    Ah keep me in the loop on that J. I am in court tomorrow on my first case where the new protocol will be relevant.

    I have already seen a breach of 5.5 in not responding to a refused offer within 10 business days (althoguh god only knows what the N123 will say about it) I was going to ask for the case to be struck out. Fortune favouring the brave and all that haha

  8. chief

    PTA refused by the Supreme Court on 2 November.


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