Knightsbridge Estates Trust v Byrne - 1939

Modified: 16th Jul 2019
Wordcount: 324 words

Disclaimer: This is an example of a student written case summary. If you want to create an essay on any question or title, try out our AI Law Essay Writer.

Cite This

Knightsbridge Estates Trust Ltd v Byrne [1939] Ch 441

Repayment period of forty years in mortgage deed not unreasonable

Facts

The plaintiff company granted a mortgage to the defendant’s insurance company. The mortgage deed provided for repayment in eighty instalments over a period of forty years. The plaintiff sought a declaration that, notwithstanding the repayment provisions, they were entitled to early redemption of the mortgage upon payment of the principal sum secured thereunder, with interest to the date of redemption and proper costs.

Issues

At first instance, it was held that the period of postponement for redemption for forty years constituted a clog on the equity of redemption and the plaintiff company was entitled to the declaration sought. The defendants appealed. They argued that the doctrine of the clog on the equity of redemption was intended to deal with the case of an impecunious landowner and unscrupulous lender which did not apply in the present circumstances.

Decision/Outcome

The Court of Appeal allowed the appeal. The Court observed that this was a proper business transaction which had none of the features of an oppressive bargain where the borrower is at the mercy of an unscrupulous lender. The Court refused to find that the repayment period of forty years was “unreasonable” in the circumstances. According to the Court, equity is concerned that the essential requirements of a mortgage transaction are observed and that oppressive or unconscionable terms are not enforced. Otherwise, it does not interfere with a commercial bargain. The Court declined to treat the relevant provisions in the mortgage deed as unreasonable where the deed was entered into by two parties such as those involved, who had acted with the assistance of competent advisers.

274 words

Cite This Work

To export a reference to this article please select a referencing style below:

Generate a new AI Essay from this title with Nomikos AI

  • Free to use
  • Takes under 2 minutes
  • No registration required
  • 2:1 level work

Suggest 3 More Related Essay Titles with Nomikos AI

  • 2:1 academic standard titles
  • Instant suggestions
  • No registration required

Get Academic Help Today!

Encrypted with a 256-bit secure payment provider