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Paragon Mortgages Ltd v. (1) Robert McEwan-Peters (2) Rachel Frances McEwan-Peters [2011] EWHC 2491 (Comm) 3 October 2011, David Steel J

The Claimant specialised in the buy-to-let market. The Defendant mortgagors ('D1' and 'D2', respectively) bought residential properties and let them mainly to students.

The Defendants fell into financial difficulty. The Claimant informed D1 that if over three months of arrears were to accrue then a receiver of rent would be appointed. The Claimant subsequently appointed receivers and formally demanded repayment on default.

D1 argued that the Claimant was estopped from making a demand unless at least three months of arrears were outstanding.

Steel J rejected D1's case. On the evidence, the most that could be said was that the Claimant had made plain that enforcement would follow if the arrears exceeded three months; not that it promised not to enforce its legal rights until that point. There was also no contemporaneous evidence of the Defendants changing their position in reliance of any such promise. In any event, the alleged promise would have only suspended the Claimant's right to enforce.

Rahul Varma / 6th Feb 2012


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