England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MAYORS & CITY OF LONDON
(His Honour Judge Simpson)

		Royal Courts of Justice Strand London WC2 Tuesday, 27th March 2001

1. LADY JUSTICE ARDEN: This is a further application by Mr. Marya to reinstate two applications for permission to appeal which have already been dealt with by this court. The title reference in this court is 2001/6038/B2. When the matter last came before the Court of Appeal it was heard by Potter LJ and Jonathan Parker LJ in the absence of Mr. Marya. That was on 16th January 2001. Jonathan Parker LJ says in his judgment that Mr. Marya had not attended and sought an adjournment of the first application. That application was rejected. In relation to the second application Mr. Marya had asked for it to be listed before two Lords Justices which had been done. Their Lordships then proceeded to give judgment on both the matters with which I am now concerned.
2. The first application was for permission to appeal against the order of His Honour Judge Simpson, and I think also the order of His Honour Judge Byrt QC of 22nd December 1999. There was then a wholly separate matter dealt with by Potter and Jonathan Parker LJJ, namely an application to reinstate an application for permission to appeal which had been dealt with by Simon Brown LJ in the absence of Mr. Marya on 21st July 2000. The matter had come on for hearing and Mr. Marya was not present when it was called on for hearing. Simon Brown LJ proceeded to deal with the matter in Mr. Marya's absence.
3. Mr. Marya sought initially that this application, 6038, should be dealt with on paper and treated as a paper application. But today when he arrived he produced a letter from a firm of solicitors, Gratian & Co, and sought an application for an adjournment. That letter states that Mr. Marya had on 26th March 2001 approached the firm and they had agreed to act on his behalf. Therefore, an adjournment was sought to enable the firm to arrange a counsel.
4. It will be apparent that both these matters have been before the court for a very long time, and I take the view that if Mr. Marya had wished for legal advice the right time to have done that was at a much earlier stage of the proceedings before the Court of Appeal, and it is now too late for him to seek an adjournment on account of lack of representation. He is well familiar with the matter and has been able to take me through the various points that he wishes to make. In those circumstances, as he has had plenty of opportunity to get legal advice I refuse his application for an adjournment.
5. I go to the merits of the application to reinstate, taking first the application to reinstate the permission to appeal against the orders of His Honour Judge Simpson and His Honour Judge Byrt. The facts are set out in the judgment of Jonathan Parker LJ. They are somewhat complicated. Mr. Marya was, prior to his bankruptcy, a director of a company called Sanray Export Services Limited. That company brought an action against Lloyds Bank PLC and obtained a judgment that the bank had acted in breach of contract in failing to honour a cheque drawn by Sanray. His Honour Judge Byrt, by order given on 14th September 1998, directed that an action for possession brought by the bank against Mr. Marya and Mrs Marya should be stayed until the damages had been assessed in the Sanray action.
6. The action for possession came about in these circumstances. Mr. and Mrs Marya executed a guarantee of moneys owed by the company to the bank. This was secured on their home. It was for possession of that property that the bank was proceeding.
7. On 9th July 1999 the assessment of damages in the Sunray action came before Judge Byrt. Mr. Marya on behalf of Sanray applied for an adjournment, on the basis that he wished there to be a police investigation into the authenticity of a document in the possession of the National Westminster Bank. The position was that the judge was not willing to grant an adjournment. Later in the day it became apparent that, as Mr Marya had not instructed solicitors or counsel to represent Sanray, there had to be an adjournment in any event. But the judge attached a condition that Sanray pay Lloyds Bank £10,000 within 28 days on account of costs thrown away, and that unless payment was made it should be debarred from prosecuting the action. Payment was not made, so that under the terms of the order Sanray became debarred from prosecuting the Sanray action.
8. Mr. Marya has submitted to me today that Sanray has appealed against the order of 9th July 1999. Jonathan Parker LJ records that that indeed occurred but that on 17th January 2000 permission was refused by Chadwick and Clarke LJJ. Chadwick LJ observed, in giving judgment, that Mr. Marya had not attended on the application and had sought an adjournment, but there being no indication that the adjournment would lead to Sanray being represented by solicitors and counsel the adjournment was refused.
9. I must first deal with the position of Mr. and Mrs Marya under the terms of the order made by Judge Byrt. On 22nd December 1999 Judge Byrt made a possession order suspended for 28 days for Mr. Marya to make an application under section 36 of the Administration of Justice Act 1970. Jonathan Parker LJ said that no such application was made, so that the possession order took effect at the expiration of 28 days. Jonathan Parker LJ records that in the course of his judgment Judge Byrt referred to the order which he had made on 14th September 1998 staying the possession proceedings pending the assessment of damages in the Sanray action, but, basing himself on authorities cited to him by counsel for the bank, which included Mobile Oil v Rawlinson 43 P & CR 221, he concluded that the issues raised by Mr and Mrs Marya's counterclaim, even if resolved in their favour, would not afford them any defence to the bank's claim to possession pursuant to the legal charge.
10. The order made by His Honour Judge Simpson QC was made on 17th January 2000. It was made on an application to review the possession order made by Judge Byrt. Jonathan Parker LJ held that His Honour Judge Simpson had no jurisdiction to review the order, so that there would be no prospect of success on an appeal against that order. He further then considered the order made by Judge Byrt on 22nd December 1999. He noted first that Mr. Marya had argued that that order was inconsistent with the earlier order of 14th September 1998. But Jonathan Parker LJ pointed out that the judge had taken the view on the second occasion that the correct course was to make the possession order. Jonathan Parker LJ said that the judge had power to make the stay. The question is whether there are any grounds for challenging the possession order itself. Jonathan Parker LJ continued:

"I cannot, for my part, see any basis on which the possession order could be successfully challenged on appeal. The authorities on which Judge Byrt based his decision to make the possession order lay down the relevant principle clearly, namely that, save to the extent that a mortgagee's right to possession has been restricted by contract or by statute, that right is not affected by any cross-claim which the mortgagor may have against the mortgagee, nor (where the secured liability is a liability under a guarantee) any cross-claim which the principal debtor may have against the mortgagee. In any event, Sanray's cross-claim against the bank has, for reasons which I gave earlier, fallen away following its non-compliance with Judge Byrt's order that it pay the £10,000 to the bank on account of costs thrown away by the adjournment of the hearing before the judge and following the refusal of its application for permission to appeal against that order."

11. I should point out that Potter LJ agreed with Jonathan Parker LJ's judgment.
12. Today, on this application to reinstate, Mr. Marya has effectively repeated the submission that was considered by Jonathan Parker LJ in the paragraph which I have just read. He points out that Sanray has a claim for damages against Lloyds Bank and that would reduce the amount owed by Sanray to the bank, and hence the amount for which Mr. and Mrs Marya were liable. But, as Jonathan Parker LJ pointed out, it is a well established principle in this field of law (sometimes referred to as the Mobil Oil principle) that the right of the mortgagee to possession is not affected by any cross claim which the mortgagor may have against the mortgagee. In another case which Judge Byrt cited, National Westminster Bank v Skelton, that principle was expressly applied where the secured liability was a liability under a guarantee. Accordingly, the argument which Mr. Marya has put to me has already been considered. I see no reason for departing from what has already been said by Jonathan Parker and Potter LJJ.
13. I would add that the form of guarantee given also includes a provision that, until all moneys and liabilities due or incurred by the customer to the bank have been paid or discharged in full, none of the signatories to the guarantee will on any ground be entitled to claim or have the benefit of any counterclaim set off or proof against dividend, composition or payment by the customer. That is clause 11. As I see it, it is not a defence to the possession order which has been made that Sanray may have a counterclaim.
14. Mr. Marya had a further submission, namely that he has made an application to the court to reconsider the refusal of permission to appeal against the order whereby Sanray's right to assessment of damages was dismissed. He referred me to an application, dated 29th December 2000, which seeks to vary a direction given by the court on 16th June 2000, stating that if he wished reinstatement of the matter considered by Chadwick and Clarke LJJ, Sanray would have to make a formal application and be represented by solicitors, and that that application would have to be accompanied by an assurance by the solicitor that counsel or a solicitor advocate would be instructed to appear at the hearing and be supported by an affidavit giving a full explanation of the applicant's failure to appear by counsel or a solicitor advocate on 17th January 2000.
15. The further application on 29th December 2000 was for a direction that the directions in that letter be varied and that the applicant be allowed to proceed. That was an application which was signed by the applicant, Ravinder Kumar Marya. That matter is, as I understand it, still pending in the Court of Appeal. But, as I see it, that is a separate matter because the order of 14th September 1998 was superseded by the later order of 9th July 1999 as Jonathan Parker LJ explained. But it is quite separate for the reasons already given, namely that, if Sanray has a counterclaim against Lloyds Bank, it is not a matter on which there would be any prospect on appeal in arguing that Mr. and Mrs Marya can rely on that matter to defend the proceedings for possession taken by Lloyds Bank. Accordingly, there would be no prospect of success on appeal in this matter, and I dismiss any application to reinstate the appeal against the possession order.
16. I now turn to the additional matter dealt with by Jonathan Parker LJ and Potter LJ, namely the defendant's application which he had brought for permission to appeal in respect of an order made by His Honour Judge Hull QC. The position is that this matter had already been heard by Simon Brown LJ. As I explained, it had been dismissed in the absence of Mr. Marya for reasons which Simon Brown LJ gave. It was also dismissed by Potter and Jonathan Parker LJJ for reasons appearing in their judgment.
17. What happened in this case is that Sanray brought an action against their solicitors and accepted a payment into court, as a result of which they became entitled to their costs down to serving notice of acceptance. They then sought to argue that they were discharged from orders for costs which had previously been made against them. The District Judge dismissed the application. There was an appeal to His Honour Judge Hull QC, who held that the appeal against that dismissal also failed. Sanray accordingly applied to the court for permission to appeal. Simon Brown LJ refused it. Jonathan Parker LJ said that he could no better than reiterate the views expressed by Simon Brown LJ. He summarised it by saying this:

"... the true position is that CPR 36.13(1) applies to the claimant's costs of the action save to the extent that they have not already been provided for by previous orders of the court. Subsequent acceptance of a Part 36 payment does not in itself exonerate the accepting party from liability under existing costs orders.... The parties may reach such a result by agreement, but there was no such agreement in this case."

18. Therefore he dismissed the application.
19. On this matter Mr. Marya repeated the argument that he had put hitherto. As I have already held this morning, it is necessary on an application to reinstate in these circumstances (and this is really an application to re-reinstate) to show grounds on which it can properly be argued that the earlier judgment overlooked a matter which would have a material effect on the outcome of the application. Since no new matter has been put before me I must decline the application to reinstate.
20. It will be apparent that I have today dealt with three applications to reinstate and a number of other applications at the same time. It is of course important to observe that these applications were applications to reinstate or re-reinstate matters when the order was first made by this court in the absence of Mr. Marya, and while Mr. Marya tells me that he was abroad, there is no further evidence in front of me as to his reason for absence. What I propose to do is to direct today that Mr. Marya should not make further applications to reinstate the applications in respect of the orders which have been before me today without the permission of the court. That permission can be applied for on paper but Mr. Marya must show grounds, by reference to the judgments already given by this court, why the application to reinstate should be heard and if he was absent reasons for his absence. I exclude from this matter 0297, Marya v District Judge Dimmick, which was not an application to reinstate but an application for permission to appeal, but in which I have today expressly given permission to make an application in 14 days in certain circumstances. I will make it clear that the direction I give today does not apply to any application which is already outstanding. I will further direct that Mr. Marya should have a copy of the transcripts of the judgments that I have given today at public expense.
Order: Application refused; no further applications to be made in respect of the orders which have been before the court today without the permission of the court; permission can be applied for on paper; application 0297 excluded from this order, permission having been given to make an application within 14 days in certain circumstances; Mr Marya to be supplied with judgments at public expense. (Order not part of the judgment of the court)