England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CROYDON COUNTY COURT
(DISTRICT JUDGE FINK)

		Royal Courts of Justice Strand, London, WC2A 2LL
		18th May 2007

Lord Justice Lloyd:

1. This is an application for permission to appeal against an order of District Judge Fink, sitting at the Croydon County Court on 28 December 2006, which was an order in effect for the sale of the property 9 Sandfield Road, which is in the joint names of the claimant, Mary Constantia Chambers, and the defendant, Victor Wilbert Chambers, who were at one time married. There is a very long history to the case. The parties were divorced in, I believe, the mid-1980s. There was an order that the property transferred into joint names, which it was. There was an order for sale in 1987. There was consequential litigation and orders in the Chancery Division in the 1990s. Mr Chambers was bankrupt at one point. Precisely why it has taken such an extraordinarily long time to come to this stage, I do not know.
2. What is particularly relevant for present purposes is that in the early 1990s the local authority of Croydon served a notice in relation to the property, saying that substantial repair work needed to be done and that on those works not being done, the local authority went in and did the work itself, at a cost of some £50,000 or so, I am told. They then registered a charge to secure repayment of that amount on 9 September 1994; with interest, I am told that the amount which the local authority claims pursuant to that charge is of the order of £110,000 or so.
3. Mrs Chambers made an application in August 2006 seeking an order for a sale of the property, initially to a particular potential purchaser who made an offer to acquire. I have no idea whether that particular sale is now a thing of the past. Mr Chambers responded by offering to buy Mrs Chambers' interest for £50,000, which he said was more than she would get on a sale, on the basis that he would indemnify her as to any charges subsisting on the property. The proceedings got off to a bad start because there was a hearing, not attended by Mr Chambers, at the end of August when the district judge made the order, but he applied to set that aside as he had not had notice and that was done, and then the hearing was rearranged for the end of December.
4. A number of issues were taken either way. The district judge heard the oral evidence of the applicant Mrs Chambers and Mr Chambers. She was impressed by Mrs Chambers and not by Mr Chambers. She decided a number of issues of fact against him.
5. The most important issue, perhaps, relates to the local authority's charge to be repaid the cost of the works. As I say, the charge was registered on 9 September 1994, so I am told, and therefore since the date of this application, and indeed after the first hearing, 12 years has expired since the date of registration of the charge and, I am told, Croydon has done nothing at all to seek to enforce the charge, and it is therefore said that those charges may very well be unenforceable under the Limitation Act. That is an important point because, in principle, if there is a sale pursuant to an order of the court without having sorted out the position vis a vis Croydon, the charges will have to be repaid. There might be a way of having a sale together with a provision such as is allowed for, for example, by section 50 of the Law of Property Act, under which if the charge is in dispute an amount is set aside to meet it, and then that can be argued about; but that has not been explored.
6. In principle, and this is certainly the way in which the district judge approached it, the charges will have to be paid if there is a sale pursuant to an order of the court. I am not quite sure what the evidence is about the valuation but this is not a property that is of huge value; as I understand it, no-one is estimating that it is worth anything like as much as £200,000. There is an indication of £185,000 in one letter, and I think that is by no means necessarily an agreed figure. So if there is £110,000 or so to be repaid to Croydon, that impacts very heavily on the pot available for division between the two parties. It is on that basis that Mr Chambers says that the £50,000 down which he offers to the applicant is a better deal for her, so long as she is indemnified against the charges, than the order which she is asking for.
7. The district judge rejected that for several reasons. One is that she thought:

"… I find it more likely than not that an acknowledgment was made in the course of correspondence …"

That is, correspondence between Mr Chambers and the local government ombudsman about the charges.

8. I am told that there was indeed such correspondence which was about quantum and the point that Mr Anderson makes is that correspondence addressed to a third party, who was not in any sense the agent for Croydon, would not be relevant as an acknowledgment under the Act. Whether it would be relevant that the local government ombudsman might very well pass letters on to the local authority against whom the complaint was being raised is a factor that might have to be considered. At any rate, that is his first point, that the district judge was wrong, and certainly wrong to find it more likely than not, that there was an acknowledgment in correspondence which the judge had not seen.
9. Secondly, he points out that the district judge said that the respondent has had since 1994 to challenge the charges and has not done so. That, Mr Anderson says, is an unfair comment because of course although the charges have been there since 1994, and if there is a challenge as to quantum that could have been raised at any time, a challenge on the basis of limitation has not been possible until September 2006, when the twelve years had run out.
10. The district judge went on to say this:

"I have considered the Respondent's proposals [that is, Mr Chambers' proposals] and I reject them. The order for sale was made nearly twenty years ago and has never been appealed and offers have been made in the meantime, which have been accepted and come to nothing. After all this time and litigation the Applicant is entitled to what she describes as 'closure' and the offer by the Respondent of an indemnity against the charges will not give her that."

So she made orders enforcing the existing order for the sale and she said at the end:

"… I am aware that by making this order the Applicant may receive less from the sale than if I had ordered a transfer of her interest for the £50,000 offered. She will however have peace of mind and that, not spite, was her objective."

That is her reasoning and Mr Anderson challenges it, principally on the basis of dealing in an arguably erroneous way with the issue of the charges in favour of Croydon.

11. I have to admit that on first reading these papers it seemed to me that it was not a very promising appeal, and insofar as the grounds for appeal include issues other than those relevant to the local authority charges, which they do in grounds of appeal 4, 5 and 6, I would not grant permission to appeal in any event. The district judge's conclusions on those seem to me to be manifestly within the proper scope of her functions and properly reasoned.
12. But so far as the charges are concerned, it seems to me that there is an issue in respect of which it is reasonably arguable that the district judge went wrong in principle in her approach, and accordingly on that point alone, which is covered in grounds of appeal 1, 2 and 3, I am prepared to grant permission to appeal. I do so expressly limiting the permission to appeal to those grounds and I refuse permission on grounds of appeal 4, 5 and 6.
13. Furthermore, I grant permission conditionally on one further step being taken, which is that the appellant must put in a witness statement exhibiting the correspondence between him (and for that matter anyone acting on his behalf) and the local government ombudsman. I can quite see that it may be said that at the hearing of the appeal that would, strictly speaking, be irrelevant because the judgment would have to be considered on the basis of what the district judge saw and not anything else, but it seems to me it is profoundly unsatisfactory that the district judge did not see that correspondence. It may be that Mr Anderson is right to say that whatever the correspondence said, it would be irrelevant, but it seems to me that it would be a great deal better that the correspondence should be before the court and available to the respondent, and accordingly I will give that permission on the basis that the witness statement and the exhibits shall be filed within, in principle, 28 days.
14. I am also asked for a stay, and that seems to me to be an appropriate order to make, so that the property is preserved unsold pending the appeal.
15. I grant permission only on grounds 1, 2 and 3. I refuse permission on grounds 4, 5 and 6. I grant a stay and I will order as a condition of the grant of permission to appeal the filing and service on the respondent of the witness statement exhibiting the correspondence between Mr Chambers and anyone acting on his behalf on the one hand, and the ombudsman on the other, relating to these charges.


Order: Application granted on grounds 1, 2 & 3.

Application refused on grounds 4, 5 & 6.

Stay granted until appeal.