England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ADMINISTRATIVE COURT
(MR JUSTICE NEUBERGER)

		Royal Courts of Justice Strand London WC2 Thursday, 12th September 2002

Thursday, 12th September 2002

1. LORD JUSTICE LONGMORE: There are two matters before the court this morning: first, an application by Mr O'Brien to stay execution of the warrant for possession which has been issued in respect of Summerselle Farm, London Road, East Sussex, as part of an application dated 7th August 2002 for permission to appeal a judgment of Neuberger J given on 25th June. An application to stay the warrant for possession was made to Neuberger J after he gave his judgment, and sometime in July he granted a stay, in writing, until 6th August but said that any further application would have to be in court on notice. That application was made and decided by the judge against Mr O'Brien on 31st July, and the judge said that if he, the judge, had gone wrong at least Mr O'Brien had a few days until 6th August to apply to this court to reverse the refusal of the application for a stay. In fact the application for permission to appeal was filed on 7th August. The second application is an application by a Mr Hares to be joined to the appeal for the purpose of also applying for a stay of execution of the warrant of possession.
2. The basic facts of the case are, as the judge said in his judgment of 25th June, a tragedy for Mr Hoath, who was the owner of the farm. The background was that Mr Hoath was made bankrupt pursuant to the judgments obtained against him as long ago as December 1991, and the trustee in bankruptcy has now made an application for possession and sale of the farm. The Tonbridge Wells County Court made an order for possession on 24th November 2000 and there was a further order that the property be sold, and that the trustee should account to Mr Hoath's wife for one half of the proceeds.
3. Mr Hoath appealed and his appeal was dismissed. There was then a hearing before the district judge resulting from the fact that Mr O'Brien, the half-brother or stepbrother of Mr Hoath, had contended that Mr Hoath had granted a tenancy of the farm to him in December 1987 with some arrangement between them that Mr Hoath was thereafter allowed to occupy the property. If the tenancy continued to exist, then Mr O'Brien would have been entitled to challenge the possession order made against Mr Hoath in favour of the trustee in bankruptcy, because the bankruptcy could not impinge on Mr O'Brien's rights under the tenancy. And so the district judge, and indeed on appeal from the district judge, the judge himself, Neuberger J, had to consider that position. The district judge held that the tenancy agreement was a sham but not a fraud. Neuberger J upheld the decision of the district judge and said that for his part he would have held that the tenancy agreement was a fraud.
4. When it came to the application to stay execution of the warrant for possession Neuberger J gave judgment on 31st July, and said this:

"As Mr Briggs [who appeared for the trustee] realistically accepts the natural reaction of the Court is to grant a stay so that the party ordered to leave can appeal, otherwise that party might feel that the appeal process is lost or rendered valueless.

I therefore approach the application with a predisposition to grant it, but each case has to be dealt with on its own merits, and I think I should reject the application.

Firstly there is a danger of prejudice to third parties if there is further delay. Secondly there is Mr Hoath's insistence on making every available application or appeal he can as a result of which the cost of the trustee runs into hundreds of thousands of pounds and it is thus important that the property should be sold as soon as possible.

It is much more potentially important that the asset is sold as well as possible. The advice that the Trustee has apparently received is that the property should be sold this side of the winter and unless possession is given there will be no chance of a sale before the winter and after Mr O'Brien is evicted there may be others who are on the land who will need to be dealt with ...

Mrs Hoath's ancillary relief application is stayed until the outcome of these proceedings, she of course has an interest in the farmhouse. I also have to look at the prospects of success of any prospective appeal. It is an arrogant Judge who says that there is no prospect of a successful appeal of an order that he has made, however the District Judge gave a careful and considered Judgment, he found that the agreement was a sham, this was considered by the Appellate Court - me - and I found that, that was right.

Mr O'Brien has a right to seek leave to appeal, however he stands little chance of success and no grounds have been put forward. Furthermore Mr O'Brien has had a fair amount of time since the 25th June when the matter was heard, he has been to the Legal Services commission and has been to counsel. I am told counsel provided an opinion which did not accord with what he said.

In my view the prospect of appeal is very slight, that is based on the District Judge's judgment at least as much as on mine. Lastly there is a point when the Court can say enough is enough. Possession for proceedings began in 1997, Mr Hoath has done everything that he could do and I am sure that he is behind Mr O'Brien who has done everything he can to resist possession being granted."

5. Mr Gregory has appeared with my permission today, he being a member of the Legal Action for Charitable help. I understand he is not a qualified lawyer, still less a qualified advocate; and when the matter was listed to come on today he wrote to the court saying that counsel was instructed (and indeed sending a copy of counsel's advice) but was now on holiday and it was only fair for the permission to appeal application to be dealt with by counsel in the ordinary way. When that was put before me I agreed that that should be the position, but of course there is still the problem of the warrant for possession which is for execution tomorrow, 13th September.
6. There is further an eviction notice that was issued on 6th September and so it looks as if eviction is going to take place tomorrow; and so the question is whether I should now stay that warrant for possession so that the eviction will not take place in the light of the pending application for permission to appeal. It is said that the application for permission to appeal has a real chance of success, because the judge was wrong, and also because of new evidence set out in the application notice which has become available that the value of the land is not as was put before the courts below in the region of £400,000, but in the region of £6m; and secondly, that Mr O'Brien suffers from alcoholism and that his memory is not reliable so that the evidence that he gave to the district judge should not have been understood by the district judge or Neuberger J to be consistent with a decision that the tenancy agreement was a sham or a fraud.
7. I have taken all these matters into account and I am aware that the application for permission to appeal has yet to be decided. It will, of course, be a second appeal, so that the avenue of appeal is to that extent restricted under part 52.13 of the Civil Procedure Rules.
8. Having taken all those matters into account I regret I see no reason for disturbing the learned judge's order as to the stay of execution. It seems to me that the reasons that the judge has given remain potent. Mr Gregory has particularly objected to the idea that the property should be sold before the winter because he says with some force that prices tend to rise all the time, in any event in that part of England. I see some force in that; but the other matters referred to by Neuberger J are compelling, and the new matters raised in the application for permission to appeal, in my judgment, take the matter no further forward; the actual value of the property is not relevant to the question whether the tenancy agreement was a fraud or a sham. No doubt if the property is worth £6m rather than £400,000, that will be good news for both the debtor and the creditors but there is no reason to stay the warrant of execution. As to Mr O'Brien's unfortunate state, he has the difficulty that it was he who was proposing the tenancy agreement and if his evidence is unreliable it would have to be disregarded. Again that cannot be any reason for holding up execution.
9. The application, therefore, to stay the warrant for possession as contained in case B2/2002/1667 and 1667/A will be dismissed, and execution will have to take place tomorrow. In so far as there is an application by Mr Hares to be joined to the appeal that will also have to be dismissed, since any such application is made far too late in the day.
(Applications refused; costs summarily assessed in the sum of £1,000).