[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	English and Welsh Courts - Miscellaneous
You are here: BAILII >> Databases >> English and Welsh Courts - Miscellaneous >> Jayashankar v Lloyds TSB Plc [2011] EW Misc 9 (CC) (29 June 2011) URL: http://www.bailii.org/ew/cases/Misc/2011/9.html Cite as: [2011] EW Misc 9 (CC)

[New search] [Printable RTF version] [Help]

In the Romford County Court

		29th June 2011

His Honour Judge Platt:

1. This is an application by the defendant for permission to appeal against an order of Deputy District Judge Iller dismissing the Defendant's application to suspend a warrant for possession which has now been executed. The claimants are Lloyds Bank TSB plc.
2. The chronology is that the application to suspend the warrant was made on 29^th March 2011 and was heard by the District Judge on 30^th March 2011. At this time the arrears on the Defendant's mortgage account were some £14,000. At that hearing the Deputy District Judge having considered the evidence put forward by the Defendant was not satisfied that he would be likely to discharge the arrears on his mortgage account within in a reasonable time and therefore dismissed the application.
3. There is no suggestion that the Deputy District Judge applied his mind incorrectly to the evidence in front of him. Effectively the Defendant now wishes to have the opportunity under the rule in Ladd v Marshall,. to put forward a more complete version of the evidence of his ability to discharge those arrears which he says would have persuaded the District Judge to exercise his discretion under section 36 of the Administration of Justice Act 1970 ("the 1970 Act") in his favour
4. The Deputy District Judge having refused the application, the warrant was indeed executed later that same day. It is important to note that there was another warrant issued by the second mortgagees Future Mortgages Limited which was also due to be executed on that day and in respect of which it appears that no application to suspend had been made.. Of course the second mortgagees had to give way to the first mortgagees warrant.
5. On 20^th April 2011 the Defendant filed his appellant's notice. I am prepared to accept that this was filed within the 21 days allowed by the rules.
6. The question now arises on which there is surprisingly no binding authority, whether in the absence of any stay of execution granted either by the District Judge or by the Appeal court, the court has any jurisdiction to entertain an appeal from a refusal to stay a warrant once that warrant for possession has been executed.
7. That involves consideration of the wording of section 36 of the Administration of Justice Act 1970 which is as follows:

"36: Additional Powers of the Court in action by mortgagee for possession of a dwelling house

(1) Where the mortgagee under a mortgage of land which consists of or includes a dwelling house brings an action in which he claims possession of the mortgaged property, not being an action for foreclosure in which a claim for possession of the mortgaged property is also made, the court may exercise any of the powers conferred on it by subsection (2) below if it appears to the court that in the event of its exercising the power the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage or to remedy a default consisting of a breach of any other obligation arising under or by virtue of the mortgage.

(2) The court –

(a) may adjourn the proceedings, or

(b) on giving judgment or making an order for delivery of possession of the mortgaged property. or at any time before the execution of such judgment or order (my emphasis), may –

(i) stay or suspend execution of the judgment or order

(ii) postpone the date for delivery of possession'

for such period or periods as the court thinks reasonable.

8. In my judgment the wording of that Act is entirely clear. Until the passing of that Act the court had no power to interfere with the mortgagee's immediate right to possession. The Act was passed as a result of the decision of Russell J (as he then was) in Birmingham Citizens Permanent Building Society v. Caunt 1962 Ch 883. Until that decision it had been the regular practise in the Chancery Division for possession actions to be adjourned by the court on terms as to payment of the arrears by instalments.
9. In Birmingham v Caunt it was held that held that in the absence of an agreement by the mortgagee the court's powers were effectively limited to granting a short adjournment in order to enable the borrower to redeem the mortgage if he were likely to able to do so.
10. Parliament responded to that decision by enacting section 36 of the 1970 Act which was subsequently amended by section 8 of the Administration of Justice Act 1973 to clarify a doubt which had arisen over what exactly was meant by "the sums due". That is not a material point in this case.
11. However in Cheltenham and Gloucester Building Society v Obi (1996) 28 HLR 22, the Court of Appeal held that the court's power under section 36 to adjourn mortgage possession proceedings, stay or suspend execution or postpone the date for delivery of possession, come to an end once a warrant has been executed.
12. That case makes clear that section 36 means exactly what it says. Parliament in its wisdom has decided that the mortgagees right to possession could only be interfered with if the court decided that it was appropriate to make an order suspending the order for possession or suspending the warrant for possession before execution has taken place.
13. Mr Oakley for the defendant contends that the effect of Part 52 of the Civil Procedure Rules is to provide an extension to the statutory provision by permitting an appeal to be lodged within 21 days after the court has made a decision to refuse to exercise its powers under section 36. In fact that extension would effectively be indefinite having regard to the provision of CPR 52.6 which allows the appeal court to extend the time for giving notice of appeal beyond the 21 day period specified in rule 52.4(2)(b). He also relies upon the provisions of rule 52.10 which reads as follows:

Rule 52.10  Appeal court's powers]

(1)     In relation to an appeal the appeal court has all the powers of the lower court.

(Rule 52.1(4) provides that this Part is subject to any enactment that sets out special provisions with regard to any particular category of appeal—where such an enactment gives a statutory power to a tribunal, person or other body it may be the case that the appeal court may not exercise that power on an appeal)

14. He says that although the warrant has been executed, his appeal was lodged within the 21 days so he in now entitled to argue his appeal notwithstanding the fact that execution has taken place.
15. The only authority to which I have been referred the case of Hyde Park Funding v Ioannou [1999] 3 C.L.D. 428. This is a decision of HH Judge Connor in the Barnet County Court which has never been fully reported but is referred to in the notes to the White Book at paragraph 3A-40 . The facts are certainly similar to those of the present case.
16. The Defendant's application to suspend the possession warrant on the morning of eviction was dismissed by the District Judge. The warrant was then executed. The borrower appealed to the Circuit Judge. The claimant contended that since the warrant had been executed the court no longer had jurisdiction to suspend under section 36.
17. The judge held that he had power to suspend the warrant under section 36 on the basis that on the hearing of the appeal from the District Judge the Circuit Judge could exercise all the powers of the lower court and could make any order that the District Judge could have made. In view of the new evidence put forward by the borrower the proper order was to suspend the warrant on terms.
18. I have two problems with that authority which in any event is not binding upon me. The first is that it is not clear from the report whether the notice of appeal was given before or after the execution of the warrant. The second is that it is quite clear that this decision was given only a few months after the CPR came into effect. At that time CPR Part 52 did not exist. It was only brought in in May 2000.
19. Up to that time appeals from a District Judge to a Circuit Judge were governed by the provisions of CCR Order 37 rule 6 which were re-enacted in Schedule 2 of the Civil Procedure Rules and not revoked until 2^nd May 2000.

This rule reads as follows:

Order 37, r 6  Appeal from district judge

(1)     Any party affected by a judgment or final order of the district judge may, except where he has consented to the terms thereof, appeal from the judgment or order to the judge, who may, upon such terms as he thinks fit,—

(a)     set aside or vary the judgment or order or any part thereof, or

(b)     give any other judgment or make any other order in substitution for the judgment or order appealed from, or

(c)     remit the action or matter or any question therein to the [district judge] for rehearing or further consideration, or

(d)     order a new trial to take place before himself or another judge of the court on a day to be fixed.

(2)     The appeal shall be made on notice, which shall state the grounds of the appeal and be served within 14 days after the day on which judgment or order appealed from was given or made.

20. That rule governing the court's powers on hearing an appeal permitted the appeal court to hold what was effectively a rehearing in any case and such rehearings were commonplace up to May 2000. The approach of the appeal court is now governed by the stricter provisions of rule 52.11 which permits a rehearing only if the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a rehearing (rule 52.11(1)(b) ).
21. Examples of cases in which it might be appropriate to hold a rehearing were given by Dyson LJ (as he then was) in Asiansky Television plc v Bayer-Rosin [2001] EWCA Civ 1792 but they did not include the circumstances of the present case where the Defendant effectively seek the opportunity to present in a more cogent form arguments which he could have made before the District judge.
22. The argument in favour of the defendant is that unless he applies for a stay or the court is able to hear the appeal before execution he is effectively barred from any remedy. I accept of course that the loss of a Defendant's family home is a serious matter which engages his rights under Article 8 of the Human Rights Convention. But those rights have to be balanced against the rights of the claimant under Article 1 of the First Protocol to recover the money which is lawfully due to him under the mortgage I was also referred to the case of Barclays Bank plc v Alcorn [2002] EWCA Civ 817 in which it was held that there is no inconsistency between section 36 of the 1970 Act and Articles 8 or Article 1 of the First Protocol.
23. I do not accept the Defendant's argument. Following the dismissal of his application to suspend the defendant has the right not only to seek permission to appeal but more importantly to apply either to the District Judge or to the Appeal Court for a stay of execution of the judgment pending the hearing of his appeal and if necessary by giving an undertaking to lodge a notice of appeal within a very short time..
24. The need for such an application is made clear by CPR 52.7 which provides that unless either the lower court or the appeal court orders otherwise an appeal shall not operate as a stay of any order or decision of the lower court. The existence of those procedural safeguards is more than adequate to safeguard the Defendant's rights under both Article 6 and Article 8 of the Convention.
25. The question therefore which it seems to me I have to decide is whether the court should prefer the measure of uncertainty which would result by allowing appeals to be made after the warrant has been executed or prefer certainty in terms of a strict interpretation of the provisions of section 36.
26. The advantages of certainty are that once a mortgagee is in possession he is entitled the very next day to sell the property with no come back at all. It is not difficult to conceive of circumstances where a mortgagor may have reason to do everything he can to delay that sale but where an immediate sale by the first mortgagees clearing off subsequent mortgages from the title may benefit other parties who also have rights. For example an immediate sale may reduce the losses of subsequent mortgagees or as another example increase the amount of money available for distribution in ancillary proceedings to which the mortgagor is a party.
27. If the defendant is right the mortgagees find themselves in a very difficult position. First of all they have got to wait twenty one days in case an appeal comes in and even after that period has elapsed they have no guarantee that permission will not be given for a late appeal weeks or even months after possession has been obtained.
28. In my judgment the arguments in favour of certainty are decisive. Certainty should prevail not just for the reasons set out in this judgment but for another compelling reason. The provisions of CPR rule 52.1. (4) state-

"This Part is subject to any rule enactment or practise direction which sets out special provisions with regard to any particular category of appeal"

29. By necessary implication section 36 of the Act sets out special provisions i.e. that the decision of the court must be made before execution which apply to a particular category of appeal that is appeals against refusals to suspend a possession warrant in respect of a residential property.. The provisions of Part 52 must give way to the clear wording of the statute.
30. I accept of course that there must be read into section 36 the word "lawful" so that it reads "the lawful execution of the warrant.". Warrants are unlawful and therefore liable to be set aside if they have been executed in circumstances of oppression or fraud see Leicester City Council v Aldwinckle (1992) 24 HLR 40 or if the judgment upon the warrant is based is subsequently set aside, see Governors of Peabody Donation Fund v Hay (1987) 19 HLR 145.
31. Is this compliant with Article 6 and Article 8 of the Convention ? In my judgment it is. The borrower who fails to obtain a suspension of the warrant can still apply for a stay as I have explained above. Even after the warrant has been executed he is still not wholly without rights. He retains the right up to the moment of sale to redeem the mortgage and upon such redemption both the mortgagee's right to possession and his rights of sale cease to exisit so he may lawfully re-enter the property.
32. Because it does not arise for decision in this case I leave open the question whether a defendant who lodges his notice of appeal before the warrant is executed and is unable to apply for a stay or to have his appeal heard before execution for lack of immediately available judicial resources, can then succeed in having that warrant set aside by application of the principles in LB Hammersmith & Fulham v Lemeh (2001) 33 HLR 231 or on the authority of Islington LBC v Harridge (1993) Times 30^th June CA . That is a question which will have to be decided when the circumstances arise
33. For the reasons set out above I grant permission to appeal but dismiss the appeal for want of jurisdiction.
34. Since this is a first appeal I have no power to grant any further permission to appeal. I do however put on record that this issue is one which has troubled county court judges on a fairly regular basis over the past ten years and in the present uncertain economic climate may be expected to arise more frequently. Authoritative guidance from the Court of Appeal would be very welcome.

His Honour Judge Platt 29^th June 2011.