NI High Court: Court rejects claim that mortgage debt was repaid in full after mortgager ‘endorsed’ the redemption letter

NI High Court: Court rejects claim that mortgage debt was repaid in full after mortgager ‘endorsed’ the redemption letter

Northern Ireland’s High Court has rejected a claim that a Co Down mortgager discharged his debts in full after writing on his redemption letter stating that he had endorsed it.

The court found that a promissory note can only extinguish an existing debt if the creditor has agreed to that being the case.


The appellant, Mr Pyper, appealed against an order made by Master Hardstaff on 23 February 2022, when he ordered that the appellant and Colette Pyper “deliver to the respondent possession of the property [at] 60 Navar Drive, Bangor, Co Down”.

The Pypers entered into a mortgage on 7 September 2007, charged to Edeus Mortgage Creators Ltd, to secure repayment of the principal sum of £221,799 together with interest.

The mortgage was subsequently transferred to the respondent. The mortgage was for a term of 12 years and contained the usual provisions for repayment and redemption.

Mr and Ms Pyper defaulted in repayment and the mortgagee made demands for payment. As of 17 September 2021, the amount due and owing on foot of the mortgage was £232,406.77.

The mortgagee applied for an order for possession which was listed before Master Hardstaff. Mr Pyper appeared before Master Hardstaff and, after hearing submissions, the Master made the possession order.

Mr Pyper appeared as a litigant in person, alongside a McKenzie friend, and the court acceded to this application. He set out the grounds of his appeal as follows, claiming that he was:

  1. Denied equality of arms.
  2. The plaintiff has dishonoured our payments.
  3. Malfeasance.
  4. Mistake.

Mr Pyper’s submissions

Mr Pyper did not challenge the validity of the mortgage or the amount due and owing. The main thrust of his appeal, and his defence to the possession order, was that he had tendered payment in total satisfaction of the mortgage debt.

Mr Corkey submitted that no payments had been made by the Pypers in satisfaction of the mortgage, and no proposals had been made by them to repay the mortgage balance.

As this was an appeal from the Master, the court conducted a de novo hearing. This removed the need for the court to consider whether the Master denied Mr Pyper equality of arms. The court therefore made no finding on this ground of appeal.

Mr Pyper explained that this ground of appeal was based on his assertion that he was not allowed to “read his defence and counterclaim into the record”. The court advised Mr Pyper that they had read all of the documents he had filed with the court.

Mr Pyper expressed his satisfaction with this approach.

Although Mr Pyper included malfeasance and mistake in his grounds of appeal, he did not pursue these grounds. When questioned by the Court, he stated that theses grounds also related to his claim that he had not been given a proper opportunity to present his case before the Master.

The last ground of appeal was that he had a complete defence to the possession order on the basis that he had tendered payment in full in respect of the mortgage debt on three separate occasions.

In 2020, he claimed that payment of the full debt was tendered by his action of endorsing on the redemption letter sent by the mortgagee, the words “accepted for value of £235,233.34 and returned for value without dishonour for settlement and closure of the account”.

He submitted that writing these words onto the redemption statement created a bill of exchange and “in law it must be treated as a cash payment as it was not returned by the recipient”.

He further submitted that he tendered payment in this format on 4 February 2021 and again on 15 March 2021.

Mr Pyper submitted that in total he had tendered payment in excess of £4 million to the respondent. By way of counterclaim, he submitted that the respondent had failed to “perform its duties as trustee” and he was therefore entitled to “specific performance to compel performance of the specific duty of obligation as set out in a private notice”.

He further submitted that the defence and counterclaim invoked rights under the Recognition of Trusts Act 1967.


On this last ground of appeal, the court noted that in Child Maintenance and Enforcement Commissioner v Wilson: “A promissory note is not legal tender. […] As a means of extinguishing an existing debt, it can only perform that function if the creditor in the debt has agreed to that being the case.”

In the present case, there was no evidence that the mortgagee agreed that a promissory note would extinguish the debt.

The court noted that “Mr Pyper’s actions in endorsing the redemption statements were unilateral acts and there is no evidence the mortgagee accepted his assertion this amounted to tendered payment”.

The court further relied on Swift 1st Ltd v Quinn [2018] NICh, where the court held that a submission that payment had been tendered as per the Recognition of Trusts Act was legally “without merit”.


Ultimately, the court was satisfied that the endorsement by Mr Pyper on the redemption statement did not constitute a tendered payment.

Further, his submission that a private trust was created was not valid in law, as it was created unilaterally by him and was not therefore binding on the respondent.

The mortgage debt remained due and owing, and no proposal had been made to discharge the debt. Therefore, in all the circumstances, the respondent was entitled to the possession order and the Master did not err in making the order.

Accordingly, the appeal was dismissed.

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