Raja v Lloyds TSB Bank Ltd

United Kingdom
26/01/2001
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In the case of Raja -v- Lloyds TSB Bank Ltd, the Court of Appeal have considered whether an action alleging a breach of the duty of a mortgagee in possession when exercising a power of sale was an action "upon a specialty" (i.e., based upon the legal charge which was a contract under seal) and therefore subject to a twelve-year limitation period (s.8 of the Limitation Act 1980). It was held that the duties of a mortgagee in possession were duties in equity and that the duties were not implied terms of the legal charge and therefore the action for damages for selling at an alleged undervalue could not be based upon a specialty. The duties imposed by the general law did not depend on the existence of the enforceable contract between the parties.

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