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Ahuja v Kerrigan & Anr - ChD

Cecily Crampin has succeeded in obtaining an interim injunction to prevent the sale of a family home by receivers appointed by a mortgagee. In this case, the loan was granted to the Claimants’ company, with a charge over the Claimants’ home, in which the Claimants gave a primary covenant to repay the loan. The loan was primarily used to repay the previous mortgage over the property, and to release funds to undertake works to it intended to allow it to be lived in by the Claimants and their extended family. By the date of the hearing, the Claimants estimated that 3 months’ works were required to finish those works; once finished, the Claimants said, the value of the property would be much improved beyond the reserve price given in the auction which the receivers had arranged.

Nugee J accepted Cecily’s submissions that there was a serious issue to be tried that the loan was a regulated mortgage contract under art 61 of the Financial Services and Markets Act 2000 (Regulated Activities Order) 2001, and since the lender was not authorised under the Financial Services and Markets Act 2000,  the loan was not enforceable without an order of the court, under s26 and s28 of that Act. No order had been obtained. Cecily successfully argued that there was a serious issue that, although the company was not an individual within the meaning of art 61, given the primary liability of the Claimants under their covenant to repay contained in the charge credit had been given to the Claimants, and that regulated mortgage contract status could be made out. In the particular circumstances of this case, the balance of convenience favoured permitting the Claimants an opportunity to finish the works.

Cecily was instructed by Walker Morris LLP.

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