Santley v Wilde [1899] 2 CH 474
Collateral advantages and presumptions about oppressive conduct.
Facts
The owner of a lease of a theatre wanted to carry on a theatre business there and took out a mortgage of £20,0001 in order to do this, secured against the lease, over five years. The mortgage also required that she also paid one third of the net profits to the lender until the end of the mortgage term.
Issues
A mortgage is a conveyance of land as security for the payment of a debt. If the borrower fails to repay the debt, the lender can possess the property in satisfaction of the debt and any interest payable. However, equity protects the right of the borrower to redeem the mortgage and end it once the debt has been paid. Equity forbids any ‘clog’ on the equity of redemption, which includes any provision which is unconscionable. The mortgagor argued that the term regarding sharing profits was a ‘clog’.
Decision/Outcome
The court found for the mortgagee. The mortgage could still be paid off in five years. Consequently, this provision was not a clog on the equity of redemption. There was no suggestion of fraud. The theatre business was unpredictable and if it failed the borrower would probably lose the money advanced. Therefore, asking for a share of profits was reasonable. A mortgagee was free to obtain any collateral advantage for himself beyond the repayment of the debt and interest provided it was not unconscionable or oppressive. There was no automatic presumption that a collateral advantage was obtained under pressure. Each case had to be decided according to its own circumstances.
Updated 21 March 2026
This article accurately describes the decision in Santley v Wilde [1899] 2 Ch 474 and the equitable principles it established regarding collateral advantages and the equity of redemption. The case remains good law and is still regularly cited in land law and mortgage law contexts.
The broader principle that equity will not permit a clog on the equity of redemption remains part of English law, though it is worth noting that subsequent case law, particularly Kreglinger v New Patagonia Meat and Cold Storage Co Ltd [1914] AC 25 (House of Lords), developed and refined the law on collateral advantages further, holding that a collateral advantage may survive redemption if it was part of a separate bargain and was not unconscionable. Students should be aware that Santley v Wilde is best understood alongside Kreglinger and later authorities. There have been no statutory changes that render this article inaccurate. The article is broadly reliable for its stated purpose of explaining the facts and outcome of the case.
