England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CROYDON COUNTY COURT
(HIS HONOUR JUDGE ELLIS)

		Royal Courts of Justice Strand London WC2A 2LL Friday 26 October 2001

1. LORD JUSTICE RIX:This is an application for permission to appeal by Mr O'Callaghan, a litigant in person, from the judgment of His Honour Judge Ellis, given on 14 June 2001 in the Croydon County Court. Mr O'Callaghan requests an extension of time. He is shortly out of time in submission of his appellant's notice. I will grant that extension.
2. In 1989 Mr O'Callaghan obtained a mortgage from the Abbey National Building Society for £58,000 in respect of flat D, a top floor flat in the roof of a house at 153 Coombe Road, Croydon. Unfortunately, Mr O'Callaghan could not keep up the mortgage payments and he surrendered the keys in November 1992. In March 1993 the flat was marketed by the Abbey National and in May 1993 an offer of £30,000 was agreed and the sale proceeded thereafter. The net proceeds amounted to about £28,000, leaving a sum of £35,000 due on balance.
3. The Abbey National then brought a claim against Mr O'Callaghan's solicitors for negligence in the conduct of that mortgage loan. That claim was compromised by the solicitors paying the Abbey National £39,000 and they took an assignment of the mortgage. Those solicitors, Dodd and Co, then brought this claim against Mr O'Callaghan as assignees of the mortgage.
4. It would appear that the monies paid by the solicitors to the Abbey National in compromise of the Abbey National's claim against them did not go to reduce or discharge the mortgage debt. Therefore Dodd & Co simply stepped into the shoes of the Abbey National for the amount outstanding under the mortgage.
5. The essential issue at the trial before Judge Ellis was whether flat D had been sold at an undervalue, and whether the Abbey National had been in breach of their duty to take reasonable steps to obtain a proper price. The evidence was that, at the time of the repossession, the flat was valued by two different valuers at £28,000 or £29,000. It was put on the market at £34,000. The price had subsequently been dropped to £31,000 and, after one offer had fallen through, a sale was completed (as I have mentioned) in the sum of £30,000.
6. A joint expert, Mr Veness, gave evidence at the trial. His evidence was that at the relevant time the value of the flat was "in the region of £35,000", but he also said that he would be prepared to review his opinion in the light of Mr O'Callaghan's assertion that he had managed to sell the flat on the floor below, flat C at the same house, about a year later, in 1994, for £46,000. Mr Veness made a supplementary report saying that if that were indeed the case, he would be willing to revise his valuation IN RESPECT of June 1993 upwards.
7. At trial, Mr O'Callaghan sought to prove that the sale price of £30,000 was too low. First, he asserted that flat C, the flat below, had indeed been sold in July 1994 for £46,000. The judge did not accept that evidence as he said that there was no "hard evidence" for the sale at that price.
8. Secondly, Mr O'Callaghan relied on evidence that he had marketed flat D in October 1991 at some £55,000, and that he had received an offer close to the asking price at about that time. Although the marketing of flat D at that time had long been in issue, Mr O'Callaghan had said nothing in his witness statement, prior to his evidence in court, that the marketing of that flat had produced any offer.
9. Subsequent to trial, at which the judge accepted the Dodds' case that £30,000 was a proper value (and rejected Mr O'Callaghan's case that there was any failure in breach of duty on the part of the Abbey National to take reasonable care to obtain a reasonable price), Mr O'Callaghan took steps, which it may well be said he ought to have taken before then, to acquire firm evidence on those two points which he had wished to present to the court. He has told me that, on returning home a disappointed litigant on the very day of the trial, he found an exchange of correspondence between him and the Abbey National in January and February 1992 relating to flat D, in which he tells the Abbey National that he had received an offer to sell that flat for £54,000 from a first-time buyer, and that he had also been advised that it could be let on a six-month tenancy for £400 per month. He asked the Abbey National what they would like him to do. He wanted their consent to act in one or other of these ways. The building society preferred him to let the flat, which he did, and so the offer to buy was never pursued.
10. Clearly, that exchange of correspondence which he now seeks to bring before the Court of Appeal on appeal as new evidence, was available to him at the time of trial and should have been used. Mr O'Callaghan accepts that. However, he says that he had been let down by three sets of solicitors and decided to handle his defence himself as a litigant in person. It was only when the judge rejected his testimony in the light of the absence of what the judge called "hard evidence", that the penny dropped as to what was required of a litigant.
11. Turning to his evidence relating to flat C, Mr O'Callaghan says that he had taken energetic steps to trace the buyer of that flat (who had subsequently resold it) through the agents, through solicitors and so forth, but that he had been unsuccessful. It was only following the judgment against him that he went to the lengths of employing a private detective in order to trace the purchaser. He was able to trace the purchaser and to obtain his telephone number within quite a short time after the judgment. By the 25 June (the judgment having been given on 14 June), the purchaser of flat C, Mr Simon Maurice, wrote to Mr O'Callaghan confirming that he had purchased the property in 1994 for £45,500. He sent to Mr O'Callaghan the offer document from the Bank of Ireland, dated 11 April 1994, for a purchase price of £45,500. That appears to me to be, certainly, hard evidence, of that purchase.
12. The question on this application is what a court would make of such evidence as bearing upon the ultimate decision of the judge that £30,000 was a proper price at the time.
13. The evidence before the judge was that the market had declined by about 11 per cent from late 1991, when flat D was marketed, to the relevant value date in June 1993, so that the £54,000 figure would have to be discounted. On the other hand, there was no real change of value between mid-1993 and mid-1994 in respect of the value of flat C.
14. Despite the fact that in the case of flat D, Mr O'Callaghan clearly had the means of presenting the evidence which he now wishes to introduce. In the case of flat C, he now wishes to introduce the evidence he has obtained by employing a private detective. In connection with flat C, I have sufficient sympathy for Mr O'Callaghan's position, in that he had taken, or so he says, energetic steps to obtain the evidence of purchase but without success, and also in the light of the fact that there is, arguably, hard evidence to support his claim, disbelieved by the judge, as to the sale of flat C at close to £46,000, to be willing to adjourn this application to the hearing of the full court, on notice, to Dodd & Co.
15. On that occasion Mr O'Callaghan will be able to advance this application again. The full court will be in a position to consider for itself the value of the new evidence as to both flats and the circumstances in which it was not brought to bear at trial, but has been produced after trial, so to consider whether, in all the circumstances of the case, bearing in mind the tests in Ladd v Marshall and also the overriding principles of the CPR, it would be right to admit the new evidence and to grant permission to appeal. If it does, the appeal will be heard at that time.
16. This case will be adjourned for a new hearing on notice, with appeal to follow, if permission is granted. I will mark it down for two hours to be heard by a court of two Lords Justices. At that time Mr O'Callaghan should be prepared to support by evidence what he has told me today about the circumstances in which he obtained the new material on which he seeks to rely (or failed to obtain it in time for the trial before Judge Ellis). He should within 28 days of seeing a copy of this transcript serve on the Dodds a statement as to those circumstances.
Order: Proceedings adjourned to be heard on notice. To be listed before two Lords Justices for two hours.