The Insolvency Rules (Northern Ireland) 1991

CHAPTER 18 MORTGAGED PROPERTY

Claim by mortgagee of land

6.194.—(1) Any person claiming to be the legal or equitable mortgagee of land belonging to the bankrupt may apply to the court for an order directing that the land be sold.

(2) The court, if satisfied as to the applicant's title, may direct accounts to be taken and enquiries made to ascertain—

(a) the principal, interest and costs due under the mortgage, and

(b) where the mortgagee has been in possession of the land or any part of it, the rents and profits, dividends, interest, or other proceeds received by him or on his behalf.

(3) Directions may be given by the court under paragraph (2) with respect to any mortgage (whether prior or subsequent) on the same property, other than that of the applicant.

(4) For the purpose of those accounts and enquiries, and of making title to the purchaser, any of the parties may be examined by the court, and shall produce on oath before the court all such documents in their custody or under their control relating to the estate of the bankrupt as the court may direct.

(5) The court may under paragraph (4) authorise the service of interrogatories on any party.

(6) In any proceedings between a mortgagor and mortgagee, or the trustee of either of them, the court may order any necessary accounts or enquiries to be taken or made under Order 43 of the Supreme Court Rules.

[E.R.6.197]

Power of court to order sale

6.195.—(1) The court may order that the land, or any specified part of it, be sold; and any party bound by the order and in possession of the land or part, or in receipt of the rents and profits from it, may be ordered to deliver up possession or receipt to the purchaser or to such other person as the court may direct.

(2) The court may permit the person having the conduct of the sale to sell the land in such manner as he thinks fit. Alternatively, the court may direct that the land be sold as directed by the order.

(3) The court's order may contain directions—

(a) appointing the persons to have the conduct of the sale;

(b) fixing the manner of sale (whether by contract conditional on the court's approval, private treaty, public auction, or otherwise);

(c) settling the particulars and conditions of sale;

(d) obtaining evidence of the value of the property, and fixing a reserve or minimum price;

(e) requiring particular persons to join in the sale and conveyance;

(f) requiring the payment of the purchase money into the court, or to trustees or others;

(g) if the sale is to be by public auction, fixing the security (if any) to be given by the auctioneer, and his remuneration.

(4) The court may direct that, if the sale is to be by public auction, the mortgagee may appear and bid on his own behalf.

[E.R.6.198]

Proceeds of sale

6.196.—(1) The proceeds of sale shall be applied—

(a) first, in payment of the expenses of the trustee, of and occasioned by the application to the court, of the sale and attendance thereat, and of any costs arising from the taking of accounts, and making of enquiries, as directed by the court under Rule 6.194; and

(b) secondly, in payment of the amount found due to any mortgagee, for principal, interest and costs;

and the balance (if any) shall be retained by or paid to the trustee.

(2) Where the proceeds of the sale are insufficient to pay in full the amount found due to any mortgagee, he is entitled to prove as a creditor for any deficiency, and to receive dividends rateably with other creditors, but not so as to disturb any dividend already declared.

[E.R.6.199]