experience from England & Wales
Section 2(1) of the Mortgage
Rights (Scotland) Act 2001 (in
force from 3 December 2001) enables the court to suspend
the rights of creditors in mortgage possession proceedings to
such extent, for such period, and subject to such conditions, as the
court thinks fit.
Section 2(2) of the Act provides that the court can only make an
order of suspension, where it considers it reasonable in all
the circumstances to do so, having regard to:
nature of and reasons for the default,
applicants ability to fulfil within a reasonable period the
obligations under the standard security in respect of which the
debtor is in default,
action taken by the creditor to assist the debtor to fulfil those
(d) the ability of
the applicant and any other person residing at the security subjects
to secure reasonable alternative accommodation.
The position in English law on this subject is not identical,
however, similarities can be made - in particular, both Scotland and
England make provision for a reasonableness test. Section
36 of the Administration of Justice Act 1970 and section 8 of
the Administration of Justice Act 1973 enable the English
courts to adjourn, stay, suspend or postpone the date for
repossession if it is likely that mortgage arrears can be repaid
within a reasonable period.
The following is an illustration of how the courts in England and
Wales have approached the question of reasonableness and
other issues. Until case law is established in Scotland, it may
be that practitioners will find assistance from decisions of the
English courts; such case law being of persuasive authority in
Scotland on comparative statutory provisions. English housing
case summaries can be found in Nic Madges Housing Law Casebook
(published by the Legal Action Group, 2nd edn 1998).
Abbey National Building Society v- Mewton 
CLY 3598, CA
Issue multiple suspensions of possession and reasonableness
Defendant in mortgage possession proceedings successfully applied for
possession to be suspended, and then on two occasions for the
possession warrant to be suspended.
On each occasion, he failed to make payments which he had promised.
On a further application to suspend, the district judge dismissed his
application and ordered that he make no further application to
suspend in any circumstances. The Court of Appeal dismissed his
appeal and held that:
It seems clear that [the defendant], having failed to comply
with the conditions on which the suspension of possession is granted,
is not in a position to complain about the orders and warrants for
possession made. His record of payment is deplorable ...
The district judge was fully entitled to order as he did.
Bristol and West Building Society v- Ellis
(1997) 29 HLR 282, CA
Issue what is reasonable depends on
individual circumstances of each case
Defendants had borrowed £60,000 under an endowment mortgage. By
August 1990 there were arrears of £8,449. A suspended possession
order was made but Mr and Mrs Ellis did not comply with it. B January
1995 the arrears were £16,000 and the balance due under the
mortgage was £76,000.
In April 1995, Mrs Ellis applied to suspend a warrant for possession.
In an affidavit, she stated she was in receipt of income support, the
DSS would pay her interest, she could pay off £5,000 arrears
immediately, but thereafter could only pay £10 per month to
arrears. She offered to sell the property in five years, when her
children would had finished university. The warrant was suspend and
the lender appealed.
The Court of Appeal allowed the appeal. It held that was is
reasonable depends upon the circumstances in each case. The comments
by Lord Justice Neill in National and Provincial Building Society
v- Lloyd  1 All ER 630; (1996) 28 HLR 459, CA, that
sale could take place in six months or nine months or even a
year did not establish a year as the maximum period as a
rule of law or as a matter of general guidance.
However, in the present case there was insufficient evidence that Mr
Ellis could or would sell the property within three to five years or
that proceeds of sale would be sufficient to discharge the mortgage
debt and arrears. Although there were letters from two estate agents,
courts should approach such estimates with reserve.
Cheltenham and Gloucester Building Society v-
Grant (1994) 26 HLR 703, CA
Issue evidence from the mortgagor/debtor
The plaintiffs challenged the practice of district judges who
suspended possession orders upon the basis of information given to
them by defendants, without necessarily hearing this sworn.
The Court of Appeal declined to lay down rigid rules on how busy
district judges should satisfy themselves on evidence, and upheld the
original order. Lord Justice Nourse stated:
It must be possible for [judges[ to act without evidence,
especially where, as here, the mortgagor was present in court and
available to be questioned and
no objection to the informal
material is made by the mortgagee. Clearly, it
will sometimes be
prudent for the mortgagor to put in affidavit evidence before the hearing.
Where a lender disputes the truth of what a borrower has said, formal
evidence will be necessary.
National and Provincial Building Society
v- Lloyd  1 All ER 630; (1996) 28 HLR 459, CA
The Court of Appeal considered a lenders appeal against a
suspended possession order. The lender argued that any such
suspension should only be for a short period.
Neill LJ rejected this submission and noted that if there were clear
evidence that completion of the sale of a property could take place
within six or nine months or even a year, then court should come to
the conclusion that arrears would be repaid within a reasonable period.
What is a reasonable period is a question for the court
in each case. However, in the present case there was insufficient
evidence to show arrears would be repaid within a reasonable period.
Much of it was a mere expression of hope and so the
lenders appeal was allowed.
Royal Bank of Scotland v- Elmes April 1998
Legal Action 11, Clerkenwell County Court
Issue suspended possession order on payments
less than current instalments
A district judge suspended a warrant for possession for three months
on terms that the defendant pay £250 one month and thereafter
£500 per month for two months, thereafter the case would further
considered. The defendant had good prospect of obtaining employment
within the period. The lender appealed in the basis the court had no
power to suspend on terms of payment less than current instalments.
Assistant Recorder Thomas Q.C dismissed the appeal, and held that
s.36 of the Administration of Justice Act 1970 enables the court to
impose any terms about payment so long as the borrower would, within
a reasonable period, be able to clear the arrears and pay the current instalments.