Halsbury’s Laws of England/COMPULSORY ACQUISITION OF LAND (VOLUME 18 (2009) 5TH EDITION)/3. STEPS IN THE ACQUISITION OF LAND/(9) STEPS WHERE LAND UNDER LEASE, SHORT TENANCY, RENTCHARGE OR MORTGAGE/(iii) Mortgaged Land/712. Redemption of mortgagee’s interest.
712. Redemption of mortgagee’s interest.
Special statutory provision is made for the purchase or redemption of the mortgagee’s interest by the under-takers1 or acquiring authority2, independently of the mortgagor3. The undertakers or authority may purchase or redeem the mortgagee’s interest in any of the land subject to compulsory purchase4, whether or not:
(1) they have previously purchased the equity of redemption5; (2) the mortgagee is a trustee6; (3) the mortgagee is in possession of the land7; (4) the mortgage includes other land in addition to the land subject to compulsory purchase8.The undertakers or authority may redeem the mortgage by paying or tendering to the mortgagee the princi-pal and interest due on the mortgage, together with his costs and charges, if any, and also six months’ addi-tional interest9; and thereupon he must immediately convey or release his interest in the land comprised in the mortgage to them or as they may direct10. Alternatively, they may give written notice to the mortgagee that they will pay off the principal and interest due on the mortgage at the end of six months, computed from the day of giving the notice; and if they give this notice, or if the person entitled to the equity of redemption gives six months’ notice of his intention to redeem the mortgage, then at the expiration of either of these no-tices, or at any intermediate period, on payment or tender by them to the mortgagee of the principal money due on the mortgage and the interest which would become due at the end of six months from the time of giv-ing either of the notices, together with his costs and expenses, if any, the mortgagee must convey or release his interest in the land comprised in the mortgage to the undertakers or authority or as they direct11.
If, in either of the above cases, on such payment or tender the mortgagee fails to convey or release his inter-est in the mortgage as directed by the undertakers or acquiring authority, or if he fails to make out a good title to that interest to their satisfaction, they may pay into court12 the sums payable under the above provi-sions13 and may then execute a deed poll14 in the manner provided in the case of a purchase of land15. On the execution of the deed poll, as well as upon a conveyance by the mortgagee, all the estate and interest of the mortgagee, and of all persons in trust for him or for whom he may be a trustee, in the land vests in the under-takers or authority and, where he was entitled to possession of the land, they become similarly entitled16.
1 As to the meaning of ‘undertakers’ see PARA 511.
2 As to the meaning of ‘acquiring authority’ see PARA 549 note 5.
3 See the Lands Clauses Consolidation Act 1845 ss 108-114 (where that Act is incorporated: see PARA 509); and the Com-pulsory Purchase Act 1965 ss 14-17 (where that Act applies: see PARA 513). These groups of sections do not form complete and exhaustive codes dealing with mortgagees’ rights, but are supplementary to the general provisions of those Acts; and the Lands Clauses Consolidation Act 1845 ss 108, 110, and the Compulsory Purchase Act 1965 ss 14, 15, therefore, do not ex-clude mortgagees’ rights, as owners, to recover compensation for injury by severance: R v Clerk of the Peace for Middlesex [1914] 3 KB 259. See also PARA 810.
4 Lands Clauses Consolidation Act 1845 s 108; Compulsory Purchase Act 1965 s 14(1). However, an acquiring authority is not under a legal obligation either to redeem a mortgage or to discharge an owner’s liability to a mortgagee, and compensation is not available on the ground that the authority had not discharged the mortgage: Shewu v Richmond upon Thames and Hack-ney London Borough Councils (1999) 79 P & CR 47, CA. As to the meaning of ‘land’ see PARA 549 note 1. See also PARA 511 text to note 7. As to the meaning of ‘subject to compulsory purchase’ see PARA 549 note 2.
5 Lands Clauses Consolidation Act 1845 s 108; Compulsory Purchase Act 1965 s 14(7)(a).
6 Lands Clauses Consolidation Act 1845 s 108; Compulsory Purchase Act 1965 s 14(7)(b).
7 Lands Clauses Consolidation Act 1845 s 108; Compulsory Purchase Act 1965 s 14(7)(c).
8 Lands Clauses Consolidation Act 1845 s 108; Compulsory Purchase Act 1965 s 14(7)(d).
9 If a time was limited in the mortgage deed for payment of the principal secured by it, and the mortgagee has been re-quired under the Lands Clauses Consolidation Act 1845 ss 108-113 or the Compulsory Purchase Act 1965 ss 14-16 to accept payment of the principal at a time earlier than the time so limited, the amounts payable to him will include all costs and ex-penses incurred by him in respect of, or as incidental to, the reinvestment of the sum so paid off: Lands Clauses Consolidation Act 1845 s 114; Compulsory Purchase Act 1965 s 17(1)(a). In case of difference these costs must be taxed, and their payment may be enforced in the manner provided by the Lands Clauses Consolidation Act 1845 s 83 or the Compulsory Purchase Act 1965 s 23 (see PARA 660), with respect to the costs of conveyances: Lands Clauses Consolidation Act 1845 s 114; Compulsory Purchase Act 1965 s 17(2). Further, if the rate of interest secured by the mortgage is higher than can reasonably be expected to be obtained on reinvestment at the time the mortgage is paid off, regard being had to the current rate of interest, the amount payable to the mortgagee will include compensation in respect of the loss thereby sustained: Lands Clauses Consolidation Act 1845 s 114; Compulsory Purchase Act 1965 s 17(1)(b). In case of difference the amount of the compensation must be referred to and determined by the Upper Tribunal: Lands Clauses Consolidation Act 1845 s 114; Land Compensation Act 1961 s 1 (amended by SI 2009/1307); Compulsory Purchase Act 1965 s 17(2) (amended by SI 2009/1307). As to the Upper Tribunal see PARA 720; and COURTS AND TRIBUNALS vol 24 (2010) PARA 883 et seq. As to references to the Upper Tribunal see PARA 724 et seq. Entry without payment of the amounts required will be an unauthorised entry: see the Lands Clauses Consolidation Act 1845 s 114. As to unauthorised entry see PARA 644.
10 Lands Clauses Consolidation Act 1845 s 108; Compulsory Purchase Act 1965 s 14(2).
11 Lands Clauses Consolidation Act 1845 s 108; Compulsory Purchase Act 1965 s 14(3).
12 As to payment into court in such cases see PARA 661.
13 Lands Clauses Consolidation Act 1845 s 109 (amended by the Administration of Justice Act 1965 s 17(1), Sch 1); Com-pulsory Purchase Act 1965 s 14(4). As to payment into court see PARAS 555 note 6, 640, 661. As from 1 October 2009, the ref-erence in the Lands Clauses Consolidation Act 1845 s 109 to the Supreme Court is repealed and a reference to the Senior Courts is inserted instead: see s 109 (prospectively amended by the Constitutional Reform Act 2005 s 59(5), Sch 11 para 9(1), (2)).
14 Ie in the manner provided by the Lands Clauses Consolidation Act 1845 s 77 or the Compulsory Purchase Act 1965 ss 9(3), 28: see PARA 663.
15 Lands Clauses Consolidation Act 1845 s 109; Compulsory Purchase Act 1965 s 14(5).
16 Lands Clauses Consolidation Act 1845 s 109; Compulsory Purchase Act 1965 s 14(6).
