PT-2021-000393 - [2025] EWHC 2749 (Ch)

Mr Cowen’s submission here was tied to the relationship between LCL and CEK in their capacities as mortgagee and mortgagor. There was, he submitted, an equitable right to redeem the Facility at any time after the contractual date for redemption. He referred me to Megarry and Wade: The Law of Real Property, 10^th ed. at 23-014 - 23-018, Cousins, The Law of Mortgages, 4^th ed. at 28-01-28-02 and 29-01-29-03; Fisherand Lightwood’s Law of Mortgage at 47.1-47.2; and Kreglinger v New Patagonia Meat and Cold Storage Co [1914] AC 25 at page 48. Mr Cowen, in opening, accepted that the legal and equitable standards were the same but submitted that they arose at different points in time – the legal right existed before the Repayment Date and the equitable right arose after it. Accordingly, in order to trigger the equitable right there still had to be a tender or, on the Claimants’ case, an offer of payment.

There were, he further submitted, two corollaries of this equitable right:

He referred to Megarry and Wade at 24-086 – 24-101 and Cousins at 29-06 and following.

He submitted that these duties recognise that the security held by LCL protection for the sums properly due to it but nothing more than that. It did not entitle LCL to exploit the for some collateral advantage.

Significantly, in my view, he referred to paragraph [42] of Çukurova: “…equity can and should respond by a special order as to interest or costs in exceptional situations where the mortgagee has by words or conduct rejected, made impossible or delayed repayment of the mortgage debt, and that such a situation may exist where there is a tender or offer of repayment, particularly one backed by moneys actually paid into court or an account.”

These were just such exceptional circumstances, he submitted, because LCL knew, through the imputed knowledge of Mr Stylianides, that it had no right to charge default interest during the term of the Loan and as Mr Theophanous had accepted at this hearing default interest was the sticking point that caused LCL to refuse the offers made.

I will address the knowledge point below, but simply as regards the scope of the jurisdiction I agree with Mr Wheeler that Çukurova does not mean that LCL was obliged to accept an offer of payment that was not compliant with the contractual scheme of the Facility Letter. Specifically, LCL was entitled to refuse any offer that did not involve payment of the sum due in immediately available funds. None of the communications relied on by the Claimants did involve immediate payment, such that in my view the jurisdiction contemplated by Çukurova has no factual basis here.