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 CHANCERY DIVISION
(MR JUSTICE LAWRENCE COLLINS)

		Royal Courts of Justice Strand London WC2A 2LL Thursday 20 December 2001

1. LORD JUSTICE CHADWICK: This is an application for permission to appeal against an order made on 26 October 2001 by Lawrence Collins J in proceedings brought by the applicant, Mr Mohammed Ali, against the National Westminster Bank Plc. The proceedings were commenced by the issue of a claim form in the Chancery Division on 3 April 2001. The claim was for damages for an alleged breach of duty by the bank as mortgagee of restaurant premises at 1 West Hill, London, SW18. The breaches alleged are: (1) that after taking possession of the property in 1990 or 1992, the bank delayed the exercise of its power of sale so that, by the time the property came to be sold in 1996, it realised very much less than it would have done if it had been sold earlier in 1990 or 1992; and (2) that the bank failed to honour a commitment, which it is said to have made in 1989, to make a further advance to the applicant for the purposes of his business. It is alleged that had the bank made that advance, the applicant would not have lost his business and lost the property.
2. On 25 April 2001, the applicant entered judgment in default of acknowledgement of service. The bank applied to set aside the that judgment on the grounds that the claim form had never been served upon it. By the same application notice, filed on 25 May 2001, the bank applied for an order under CPR 3.4(2) striking out Mr Ali's statement of case on the grounds that it disclosed no reasonable grounds for bringing the claim. The application is supported by a witness statement made by an assistant litigation manager at the Royal Bank of Scotland Group, of which National Westminster Bank is now a member.
3. The application was heard by Master Moncaster on 21 July 2001. He set aside the default judgment and struck out the two paragraphs of the particulars of claim which contained the allegations in support of the claim for damages for breach of the alleged agreement to make a further advance. He did not strike out those parts of the particulars of claim which alleged a breach of duty in relation to the exercise of the power of sale. But, he stayed the claim in the action unless and until the bank itself took steps to recover from Mr Ali the debt which it claimed that he owed.
4. The result may be described as a stand off. If the bank pursued its claim for the balance of the debt, then Mr Ali could revive his claim that the property had been sold at an undervalue. But, otherwise, he could not pursue that claim. The reason for that order appears at the end of the Master's judgment. When addressing the relationship between the bank's debt and the possible value of the property, he said:

"The valuations all agree at a figure of £40,000, £50,000, £60,000 before the very low valuation. Taking the highest valuation, the difference between the value and the sale price is £42,500. The position here is that Mr Ali owes the Bank the sum of £60,000 plus interest. With interest, as at the date of completion that amount was I think £112,000. The Bank is not pursuing Mr Ali for that sum as, no doubt, it is aware that he has no money.

Therefore, there is no purpose in Mr Ali being allowed to continue his claim against the Bank which, even if successful, will be over-topped by his debt to the Bank. Therefore, in my view, Mr Ali's claim should be stayed unless and until the Bank takes steps to recover the debt due from him to them."

5. The Master refused permission to appeal against his order. Mr Ali filed an Appellant's Notice in the High Court on 13 August 2001. The Appellant's Notice included, as was required in the circumstances, an application for permission to appeal from the Master to the judge. That application came before Lawrence Collins J on 26 October 2001.
6. It is plain from his judgment that Lawrence Collins J refused the application for permission to appeal. In the final paragraph of that judgment, he said:

"In those circumstances, it seems to me that the Master properly exercised his discretion and that there really are no possible bases for arguing that there is a reasonable prospect of success of an appeal from the Master's decision. Therefore, while I have every sympathy with Mr Ali's predicament and express my gratitude for the very articulate and polite way in which he put forward his case, I must dismiss this application."

7. That is the language of a judge who is dealing with an application for permission to appeal; not the language of a judge dealing with the appeal itself. When the order came to be drawn up, however, it did not record accurately what happened before the judge. The order of 26 October 2001 reads:

"UPON THE APPEAL of the Appellant from the Order of Master Moncaster dated 31 July 2001

AND UPON HEARING the Appellant in person and there being no attendance on behalf of the Respondent

IT IS ORDERED that the Order be Affirmed and the Application be dismissed."

8. It could be said that the order had been drawn on the basis that the judge had heard and dismissed an appeal rather than an application for permission to appeal.
9. There are three matters which point to that interpretation. First, the order begins with the words "UPON THE APPEAL"; second, Mr Ali is described as "the appellant" rather than "the applicant"; and, third, the order purports "to Affirm" the order of the Master. But there is a contrary indication, in that it is ordered that "the Application" be dismissed.
10. In my view, notwithstanding the equivocal terms of the order of 26 October 2001, it is clear that Mr Ali was never granted permission to appeal from the order of Master Moncaster; and that the matter before Lawrence Collins J was treated as an application for permission to appeal and not an appeal. The application for permission to appeal was dismissed. There is no appeal to this Court from an order refusing permission to appeal to a lower appellate court - see section 54(4) of the Access to Justice Act 1999 and the observations of this Court in Cameron McDonald, Tanfern Limited (Practice Note) [2000] 1 WLR 1311.
11. Accordingly the application which Mr Ali now makes to this court is misconceived. This difficulty was pointed out to Mr Ali by the Civil Appeals Office in a letter dated 29 November 2001. He was invited to reconsider his position and either (i) to identify in the bundle, or to provide a copy of, any order of the High Court granting permission to appeal to that court, or (ii) to withdraw his application to this Court. He was told that if he decided not to pursue his application to this Court, the issue fee would be returned to him on the grounds that the Appellant's Notice would not have been accepted if the true position had been appreciated. But it appears that Mr Ali was insistent that this application be listed for hearing. He continued to insist on that course when the matter was called on today.
12. I have no doubt that the application must be struck out for the reason which I have already given. This court has no jurisdiction to entertain it. The statutory restriction in section 54(4) of the 1999 Act prevents that.
13. I should add, however, that if, contrary to the true position, Lawrence Collins J had heard an appeal from the order of Master Moncaster, the present application for permission to appeal would fall within section 55(1) of the Access to Justice Act 1999. In those circumstances an appeal, to this court would be a second appeal for which permission could not be granted unless the proposed appeal raised an important point of principle or practice, or there was some other compelling reason why a second appeal should be entertained by this Court.
14. The present application would not come near to satisfying that test.
15. In my view the Master was plainly correct to make the order which he did, and Lawrence Collins J was plainly correct for the reasons set out in his judgment, to take the view that there were no grounds for an appellate court to interfere with the Master's decision.
16. The application is dismissed.
Order: Permission to appeal refused.