found within the mortgage deed and other related documents. The exercise of finding inconsistencies is not a balancing exercise between the rights of the parties but an exercise to determine whether the terms in question cannot be given effect, if they cannot then they are deemed inconsistent.
This paper suggests that this exercise should lend itself to situations where the Lender has greater rights than the borrower, or different rights to those necessary to make the property adequate security, or powers Lenders wish to exercise with an improper motive or in bad faith.
The courts should find in such circumstances that there is an inconsistency. The courts should intervene in cases where the Lender has powers expressed in the mortgage deed likely to cause a Borrower’s default as seen in Alexander v West Bromwich Mortgage Co Ltd.
This paper cannot define greater rights but proposes that the courts consider the circumstances in which the terms were agreed; if any limitations or restrictions have been imposed upon the exercise of the right and the likelihood of the borrower redeeming the property if the right is exercised. All three limbs should be satisfied before the court exercises its discretion to vary or set aside a Lender’s right.
The current approach to inconsistencies should still be applied: “Inconsistencies should be approached without any pre-conceived assumptions. One should not strive to avoid or to find inconsistency. Rather one should “approach the documents in a cool and objective spirit to see whether there is inconsistency or not”.