The use of bridging financer<\/a> has grown significantly, offering propri\u00e9t\u00e9<\/a> developers, investors, and homeowners<\/a> quick access to liquidity. However, because bridging loans feature short maturities and high interest rates, they also experience a high rate of default. When a borrower fails to exit the facility on time, bridging lenders typically bypass lengthy court channels and immediately appoint Fixed Charge or Law of Property Act (LPA<\/a>) receivers<\/a> to seize and sell the secured property. <\/p>\n\n\n\n Historically, an operational paradox slowed down this enforcement<\/a> route when dealing with owner-occupied properties. Under standard<\/a> mortgage terms, receivers are legally designated as the agents of the borrower to protect the lender from liability. This created a difficult legal question: Comment un mandataire peut-il intenter une action contre son propre mandant pour obtenir la possession du bien immobilier ?<\/em> <\/p>\n\n\n\n L'affaire historique jug\u00e9e par la Haute Cour dans l'affaire Menon c. Pask <\/em>2019 <\/em>EWHC 2611 (Ch) <\/em><\/a>a r\u00e9solu ce dilemme de longue date. <\/p>\n\n\n\n To understand the importance<\/a> of the Menon v Pask decision, it helps to review why lenders prefer using receivers in bridging disputes. <\/p>\n\n\n\n When a borrower defaults<\/a> on a bridging loan<\/a>, the lender’s main goal is to recover their capital as quickly as possible. Selling a property with tenants or the owner still living inside reduces its market value and delays<\/a> the transaction. <\/p>\n\n\n\n Les pr\u00eateurs s'appuient sur le Loi de 1925 sur le droit immobilier<\/a> and express mortgage terms to appoint receivers. This approach provides distinct advantages<\/a>: <\/p>\n\n\n\n The system works smoothly for commercial<\/a> or tenanted properties. However, if the borrowing individual<\/a> ou developer<\/a> refuses to move out of the property, receivers face immediate legal obstacles. <\/p>\n\n\n\n En Menon c. Pask<\/em>, Mr and Mrs Menon charged their r\u00e9sidentiel<\/a> home in West London<\/a> to assistance<\/a> a business<\/a> loan facility. When the facility defaulted, the lender appointed joint fixed charge receivers to take control of the asset. <\/p>\n\n\n\n Because the Menons remained in the house, the receivers initiated possession proceedings in the County Court. Due to standard industry<\/a> practices at the time, the claim was originally filed as: <\/p>\n\n\n\n \u201c Menon et Menon, repr\u00e9sent\u00e9s par Pask et Goode en leur qualit\u00e9 de co-syndics charg\u00e9s de la gestion des charges fixes\u2026 contre Menon et Menon. \u201d<\/em> <\/p>\n\n\n\n This meant the borrowers, via<\/a> their legal agents, were technically suing themselves for possession. The Menons defended the action using two main arguments: <\/p>\n\n\n\n The County Court rejected these defences, prompting the borrowers to appeal<\/a> to the High Court. <\/p>\n\n\n\n Mr Justice Mann dismissed the borrowers’ appeal, establishing clear rules for modern receivership<\/a> enforcement. The High Court resolved the dispute using two main legal concepts: <\/p>\n\n\n\n The court held that filing a claim where the borrower effectively sues themselves is procedurally incorrect. Instead, receivers are entitled to bring possession proceedings against a borrower in their own names. This separation<\/a> solves the procedural<\/a> conflict<\/a> while respecting the receiver’s statutory<\/a> and contractual duties. <\/p>\n\n\n\n The court looked beyond strict agency rules to examine the commercial purpose of the underlying mortgage deed<\/a>. Mr Justice Mann explained that the right of a receiver to take possession arises because: <\/p>\n\n\n\n The judgment confirmed that a receiver does not need a formal property estate to claim possession. They only need a contractually supported better right to possession than the borrower, which takes<\/a> effect the moment the underlying security becomes enforceable. <\/p>\n\n\n\n Alors que Menon c. Pask<\/em> Tout en renfor\u00e7ant les possibilit\u00e9s offertes aux pr\u00eateurs, elle a \u00e9galement mis en place une protection essentielle pour les emprunteurs particuliers dans le cadre de pr\u00eats immobiliers r\u00e9sidentiels. <\/p>\n\n\n\n Le tribunal a examin\u00e9 si un emprunteur pouvait se fonder sur Article 36 de la loi de 1970 sur l'administration de la justice<\/a> pour retarder ou suspendre une proc\u00e9dure d'expulsion engag\u00e9e par un administrateur judiciaire. Historiquement, cette protection ne s'appliquait qu'aux actions intent\u00e9es directement par un cr\u00e9ancier hypoth\u00e9caire<\/em> (le pr\u00eateur). <\/p>\n\n\n\n Mr Justice Mann ruled that Section 36 does apply to possession claims<\/a> brought by receivers. The court decided that a receiver acts as a vehicle for enforcing<\/a> the lender’s property rights. <\/p>\n\n\n\n As a result, an individual residential borrower can ask the court to adjourn, suspend, or stay a possession order if they can demonstrate a realistic plan to pay off the loan or clear the arrears<\/a> within a reasonable timeframe. <\/p>\n\n\n\n La d\u00e9cision rendue dans l'affaire Menon c. Pask<\/em> concilie l'int\u00e9r\u00eat commercial et la protection des consommateurs dans le secteur du cr\u00e9dit relais. En r\u00e9solvant le paradoxe de l'agence, il confirme que les liquidateurs peuvent poursuivre directement les emprunteurs occupant les biens afin d'en obtenir la restitution et de r\u00e9aliser la garantie sous-jacente. <\/p>\n\n\n\n At the same time, extending Section 36 protections<\/a> to these actions ensure individual borrowers retain a legal tool to save their properties if they can present a viable financial exit. Navigating these disputes requires clear documentation, proper procedural filings, and an understanding<\/a> of mortgage litigation. <\/p>\n\n\n\n Ben Lewis is an Associate Solicitor in RFB\u2019s Litigation department. For\u00a0enquiries on this topic, please contact<\/a> Ben Lewis via email at\u00a0B.Lewis@rfblegal.co.uk<\/a>\u00a0ou par t\u00e9l\u00e9phone au 0203 947 8892.<\/p>","protected":false},"author":12,"featured_media":9932,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[20],"tags":[81],"class_list":["post-9931","insight","type-insight","status-publish","format-standard","has-post-thumbnail","hentry","category-property-litigation","tag-litigation-team-dj"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\tLes m\u00e9canismes de la mise sous administration judiciaire dans le cadre du financement relais <\/h3>\n\n\n\n
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Les faits et le \u201c paradoxe de l'agence \u201d dans Menon c. Pask<\/em> <\/h2>\n\n\n\n
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La d\u00e9cision de la Haute Cour : efficacit\u00e9 commerciale et qualit\u00e9 pour agir <\/h2>\n\n\n\n
Poursuivis en justice en leur nom propre<\/strong> <\/h3>\n\n\n\n
Le test d'efficacit\u00e9 des activit\u00e9s principales<\/strong> <\/h3>\n\n\n\n
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Une lueur d'espoir pour les emprunteurs : le pouvoir discr\u00e9tionnaire pr\u00e9vu \u00e0 l'article 36 <\/h2>\n\n\n\n
Strat\u00e9gies pratiques pour r\u00e9soudre les litiges li\u00e9s aux pr\u00eats relais <\/h2>\n\n\n\n
Strat\u00e9gies \u00e0 l'intention des pr\u00eateurs et des cr\u00e9anciers<\/strong> <\/h3>\n\n\n\n
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Strat\u00e9gies \u00e0 l'intention des emprunteurs et des garants<\/strong> <\/h3>\n\n\n\n
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R\u00e9sum\u00e9 <\/h2>\n\n\n\n
Ben Lewis, avocat sp\u00e9cialis\u00e9 dans les litiges relatifs aux pr\u00eats relais \u2013 Contactez-nous <\/h2>\n\n\n\n