The Court of Appeal gave its judgment on 24th January 2012 which dismissed the appeal against the earlier High Court decision (HHJ Behrens) in these test cases on sale and rent back.

*** October 2012 UPDATE ***

Permission to appeal to the Supreme Court was granted in Cook v The Mortgage Business PLC et al [aka North East Property Buyers ] -€“ the appeal is not expected to be listed until June 2013 at earliest.

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Cook v The Mortgage Business Plc [2012] EWCA Civ 17 judgment

The proceedings concern whether sale and leaseback arrangements between tenants who had previously owned their homes and an organisation known as North East Property Buyers bind the mortgage lenders to North East Property Buyers as overriding interests under the Land Registration Act 2002. By the time of the appeal there were 4 test cases extant and around 90 cases stayed. There were also cases stayed in other parts of the country in relation to similar schemes where mortgagees are attempting to recover possession from tenants after the borrowers have defaulted.

For an analysis of this latest decision and its relevance to equity release schemes and the existing caselaw of Abbey National BS v Cann [1991] 1 AC 56, see commentary on Nearly Legal : 26/1/12 Equity Release Schemes: the CA view (Nearly Legal).

James Stark of Garden Court North instructed by David Gray & Co Solicitors and Clark Willis Solicitors led by Jonathan Small QC of Falcon Court Chambers, London, represented all of the test case tenants for the appeal.

Background

20/12/2010 Permission to appeal in sale and leaseback test cases  

Following the judgment in the sale and leaseback test cases involving North East Property Buyers and nine tenants, permission to appeal has now been granted.

North East Property Buyers Litigation [2010] EWHC 2991 (Ch)  judgment

Permission to appeal was granted by HHJ Behrens with an extension to lodge by 30th December 2010 - and if an appeal was lodged he has ordered a stay in the test cases and all the other cases in the litigation in Newcastle County Court.

Public funding has now been granted and the appeal will be lodged by that date.

James Stark of Garden Court North instructed by David Gray & Co Solicitors led by Jonathan Small QC of Falcon Court Chambers, London will represent all of the test case tenants for the appeal.

For an analysis of this latest decision see commentary on Nearly Legal : 29/11/10 Sale and Rent Back - Priority over charge, Round 1 (Nearly Legal) - includes a link to the judgment.

18/10/2010 Test Cases on sale and leaseback

HHJ Behrens sitting as a Deputy High Court Judge at Leeds will commence on Tuesday 19th October 2010 hearing a trial of preliminary issues in respect of nine test cases from Newcastle County Court in respect of whether sale and leaseback arrangements between nine tenants who had previously owned their homes and an organisation known as North East Property Buyers bind the mortgage lenders to North East Property Buyers as overriding interests under the Land Registration Act 2002.

North East Property Buyers either purchased the properties at a discount or required a substantial amount to be deducted and paid to them from the proceeds of sale. The tenants say they were made promises that they could stay as long as they wanted or for life and the vast majority of them had no idea that the purchases were being funded by mortgages.

North East Property Buyers have defaulted on the mortgages and the lenders have sought possession against the tenants.

James Stark instructed by David Gray & Co Solicitors led by Jonathan Small QC of Falcon Court Chambers, London represents six of the test case tenants.