England and Wales Court of Appeal (Civil Division) Decisions

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

		Royal Courts of Justice Strand London WC2 Thursday, 11th April 2002

1. LORD JUSTICE WARD: This is an application for permission to appeal against the order made by His Honour Judge Callman on 14th September 2001. The judge had dismissed an appeal brought by the applicant against the order made by Deputy District Judge Wallis, in which he had ordered that the claimant building society have permission to issue a warrant for possession of the applicant's home. Because the appeal to this court is a second appeal, the applicant faces the difficulty of showing that an important point of practice or principle is raised, or that there is some other compelling reason why the court should entertain the application.
2. I would have been inclined to grant permission to appeal immediately on the simple basis that, from the note of the judgment of the deputy district judge (which is a note prepared, I think, by the claimant's solicitors) and from the endorsement of that judgment almost verbatim by Judge Callman, it appears that both the deputy district judge and Judge Callman have done no more than recite the fact that they have a discretion (which may undoubtedly be correct), but they give no reasons that I can discern as to the manner in which they applied the discretion they had. Simply to recite that they had to exercise it judicially and then pronounce the result may fall short of a reasoned judgment, which everyone these days has to give. There appears to be scant reference to the sort of factors to which the court might have to have regard, as set out in Duer v Frazer [2001] 1 All ER 249. Given that the applicant's home is at risk and given that there is at least a suggestion of some fairly heavy-handed dealing by the building society, I would have been inclined to say that there is a compelling reason why the court should allow this second appeal.
3. I hold back, however, from granting permission immediately because I am troubled about a number of aspects relating to this case. I shall therefore adjourn the matter to be heard on notice to the building society, with the appeal to follow if permission is granted. A copy of this judgment must be sent to the solicitors for the building society and they must note, please, that I shall require them to provide the court with the following further information:

(1) I want a full chronology of these proceedings, which commenced way back in 1993.

(2) I want to see the particulars of claim which supported the original application for a possession order. That possession order has now been obtained by the applicant. It was previously missing from my papers.

(3) I have not seen the application made by the building society for permission to issue their possession order, although six years appear to have passed since its making. That must be provided for me.

(4) So must any supporting affidavit or statement of facts filed by the building society to explain the delay and explain why they wanted possession. I expect that that information will include (and, if it does not, I require the building society to disclose to me) the amount of the arrears that were due at the making of the possession order.

(5) I wish to see, if it is available, a copy of the note of the judgment made by District Judge Armon-Jones on 16th March 2001, particularly with reference to the reasons which led him eventually to say that the building society were not entitled to add costs to the mortgage in respect of that application.

(6) I want the building society to set out for me a full history of this mortgage to indicate to the court what arrears were outstanding at each stage that the case came before the court. Moreover, I want them to be able to identify to the court the redemption figure that would be needed to pay off this mortgage as at the date the case comes back to court. The building society seem to have a happy habit of adding costs to this mortgage at the drop of a hat. I take the view that the building society are duty bound to provide, as a service to their borrower, the correct redemption figure. They shall not be entitled to add charges for providing this information unless they can persuade the court that they are entitled to do so. I want that redemption statement to identify the costs that have been incurred and added to the mortgage from time to time, and I want some, though not necessarily precise, breakdown of those costs to give me an indication of what costs were incurred at any particular time. On page 124 of the bundle before me there is an analysis of the mortgage debt. I note that no costs were added in 1993, when the proceedings were taken, yet £758.84 was added in the year 1995, when I know not what proceedings were taken. To what costs do they relate?

(7) I want a proper transcript of the judgment of District Judge Wallis given on 22nd May. The note of the judgment appears at page 3 in my bundle. Mr Olanrewaju, I think quite offensively, describes it as a "forged document". That is an unnecessary insult. It does not do his case any justice to suggest that it was a forgery. I have no doubt that it was a proper note taken by somebody; but, if there is no mechanical recording of the full transcript, then I would wish the deputy district judge to approve that note in the conventional way. I am told, from my reading of the papers, that Judge Simpson ordered that there be a proper transcript, and it is high time that it be produced.

(8) There is an issue in this case as to the building society's entitlement to add their costs. From what I understand of the applicant's case, when he received the mortgage offer he struck through the Mortgage Conditions 1988, deleted them and returned the papers in that state (see page 168 of the bundle before me). His case, if I correctly understand it, is that, having returned the mortgage application with those parts struck out, if the mortgage was then granted it would have been granted on the basis of his counter-offer. If he is correct, there may be no entitlement to charge the costs to the mortgage account, as the building society habitually have done. I therefore direct the building society to produce the original - and I emphasise "original", not a photocopy (they can provides a photocopy in the bundle, but they must have the original available at court) - of the mortgage application and the mortgage conditions, so that the court can see precisely what offer was made; how, if at all, that offer was amended; and what the original contract was.

(9) I note that Judge Callman directed the building society to inform the appellant of any costs wrongly added to the mortgage arrears despite the order of District Judge Armon-Jones. I have not seen the building society comply with that yet. I expect them to do so when the matter comes back.

4. There will be issues arising on this application as to the amount of the arrears due from time to time; questions of whether or not those arrears have been discharged; questions of whether or not section 36 entitles the applicant to apply for a reasonable time to pay those arrears; and the court will need every assistance from the building society to justify the order that was made.
5. The judge appeared to rely on the authority of Western Bank v Schindler, which I take to be a reference to the case reported at [1976] 3 WLR 341. I need to be directed to the passages which justify Judge Callman's conclusions. The judge referred to an authority of Galanty v Caulfield. I cannot trace it anywhere. I would wish a copy of that to be produced so that its relevance can be explained to me.
6. For those reasons I expect the building society to be co-operative. I expect the building society, as a reputable bank, to dispel some of the allegations of heavy-handed dealing which Mr Olanrewaju makes against them. I expect that the building society will be co-operative in allowing this applicant a reasonable opportunity, if necessary, to refinance this loan, so that the Halifax may get what is justly and properly due to them and he may get the Halifax off his back, where he finds their presence an increasing burden. But we will deal with that at the adjourned hearing.
7. It seems to me that the main areas of controversy in this case relate to the charging of legal fees and adding them to the mortgage debt. I would have hoped that that was a matter that could be resolved by mediation, if necessary, and I invite the parties to consider employing this Court's mediation service to see whether some sensible compromise can be reached as to the amount outstanding on this mortgage, so that proper facilities can be available to the applicant to refinance with a decent and reputable lender and solve the problems without coming back here again. I will allow two months to engage in alternative dispute resolution. This case must be heard again before the end of July.
Order: unless matter resolved in meantime by ADR, application adjourned to be heard before end of July 2002 on notice to the building society, with appeal to follow if permission is granted (before Ward LJ and an LJ from the Chancery Division - time estimate 1½ hours); meanwhile stay of execution of possession order; transcript of judgment to be provided to parties at public expense.