In this case, the Court of Appeal consider when it is right, and reasonable, for mortgagees in possession to remove and dispose of items that have been left in repossessed properties.


The Claimants had a mortgage with the Defendant lender. They fell into arrears and the Defendant issued possession proceedings. The Defendant subsequently received an eviction date and served a notice on the Claimants advising that they required vacant possession of the property by the specified date. The notice also stated that the Claimants must remove all of their belongings by that date. The Claimants failed to remove all of their belongings from the property and returned three times over the next month to continue to remove items. During this time, a number of notices were placed on the windows of the property, warning that if the Claimants did not remove all their belongings within 14 days, they would be disposed of. Upon returning to the property for a fourth time, the Claimants found that their belongings had been removed, and destroyed.

The Defendant’s mortgage terms and conditions stated that in the event of default, or repossession, if the borrower left goods at the property, the Defendant could take steps to remove and store the goods and either dispose of them, or return them to the rightful owner, if that person was not the borrower. The terms and conditions stated that the above steps would only be taken if the items were not removed within seven days of receiving notice at the borrower’s new address or, if no new address had been provided, within seven days of vacating the premises.

The Claimants issued proceedings seeking damages for conversion of their personal chattels and contested that the mortgage terms and conditions set out a number of trigger events that the Defendant had to comply with. They argued that the procedure set out in the mortgage conditions applied sequentially and therefore the mortgagee could only dispose of the goods, after having removed them and stored them elsewhere in the first instance. They submitted that as the Defendant had not done so, they had acted in a manner that was not right and/or reasonable.


At first instance, the District Judge dismissed the Claimants’ claim. The District Judge held that Claimants had been obliged to deliver up vacant possession of the Property by the eviction date. The Defendant, when in possession of the property, was an involuntary bailee and as such was required to act in a way that was right, and reasonable. The District Judge held that this test was subjective, and depended on the circumstances of each case. In this case, he found that the Defendant had discharged this duty.

The Claimants appealed and the appeal was dismissed. The Court of Appeal found that the mortgage terms and conditions were not exhaustive, or exclusive, as to the steps that the Defendant must take. They stated that the correct approach, and the starting point in any case, was to look at the purpose of the mortgage terms and conditions. In this case, they provided the Claimant with a seven day grace period to remove items from the repossessed property and mandated that if the Defendant wanted to dispose of the goods, then the requisite 7 day notice must have been served. Once this position had been established, the Court held that they would consider what was right, and reasonable, in the case before them. On considering the facts of this case, particularly the opportunities provided to the Claimants to remove the goods, the Court found that the Defendant had discharged its duty as an involuntary bailee.


The Court recognised that, had the Claimants’ case been allowed, it would have led to absurd results and placed unreasonable and unjustifiable burdens on the Defendant. Whilst the Court of Appeal confirmed that each case would be treated on its own merits, it clarified that the Courts are willing to look beyond the mortgage terms and conditions, and take into account all the circumstances, when determining whether the mortgagee had discharged its duty to act in right and reasonable manner. This is a reassuring result for lenders who are faced with goods left in repossessed properties.

For further information, please contact Georgina Squire or the Partner with whom you usually deal.