21 December 2015
Security enforcers should note today's timely reminder from the Court of Appeal on the scope of their duties as mortgagee. In finding for the mortgagee (for whom Clifford Chance acted), the Court of Appeal confirmed existing law that the mortgagee does not owe its duties to those without a recognised interest in the property sold. The decision also confirms that whilst a mortgagee who seeks to buy mortgaged property is under a heavy duty to show that it has acted fairly to the mortgagors, the mortgagee still decides on the timing and method of sale. The decision recognises the value to aircraft mortgagors of a mortgagee being able to bid for the aircraft and that a mortgagee is not obliged to pay more than the market price. The decision should reassure secured financiers as to the enforcement powers available to them under English law.