ON APPEAL FROM THE POOLE COUNTY COURT
HIS HONOUR JUDGE MILLIGAN
AND FROM THE CROYDON COUNTY COURT
HIS HONOUR JUDGE ELLIS
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
LORD JUSTICE GROSS
| BANK OF SCOTLAND
|- and -
||1st Defendant Appellant
|- and -
|2nd and 3rd Defendants Respondents
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Gary Lidington (instructed by Aldridge and Brownlee) for the Respondents, Mr & Mrs Pain
Hearing date: 15 December 2010
Crown Copyright ©
Lord Neuberger MR:
The background facts
The Order made by Judge Milligan
- The Bank recover possession of the Property;
- Ms Pereira pay the Bank £298,183.60, being the sum loaned plus interest and costs;
- The sale and transfer of the Property be rescinded, and the title be rectified accordingly; and
- Ms Pereira pay damages to the Pains, such damages to be assessed following completion of the sale of the Property, and to include the Pains' costs of the proceedings.
The application to Judge Ellis to set aside the Order
The applications before this court
The applicable principles to these applications
The interrelationship between the two applications
The appeal against Judge Ellis's refusal to set aside the Order
The application for permission to appeal against the Order out of time
Lord Justice Lloyd:
The relationship between an appeal and an application under CPR rule 39.3(3)
"(3) Where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.
(4) An application under paragraph (2) or paragraph (3) must be supported by evidence.
(5) Where an application is made under paragraph (2) or (3) by a party who failed to attend the trial, the court may grant the application only if the applicant –
(a) acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;
(b) had a good reason for not attending the trial; and
(c) has a reasonable prospect of success at the trial."
Ms Pereira's prospects of a successful defence
"Mr James made the representations fraudulently on behalf of himself and/or Styllpoint and/or the First Defendant [Ms Pereira] in that Mr James knew the representations to be false or did not believe it to be true or was reckless not caring whether it was true or false."
"On abut 21st/22nd January 2004 we signed a transfer document transferring 19 Whitecliff Crescent to the person Neville James told us would be the nominee only. Her name was Juliana Pereira. We were introduced to her before we agreed to go ahead with the deal and she knew all about the scheme and the £11 million, which the Trust was supposed to have, and the £250,000 which would be set aside for us. She knew we would have the right to live at the property after the transfer. We understand that she has been involved as a nominee for other properties on behalf of the Trust and the Trust Protector Neville James e.g. 108 River Way Christchurch."
"Q. Could you tell the court how you know that Miss Pereira knew about the scheme?
A. She told me herself. Agreed to everything.
Q. When did she tell you? ... was there just one meeting?
A. We did meet with Miss Pereira more than once. This was on the first meeting and the indication I got from her was that she knew everything that was going on, that she would be the nominee and she would work with us looking after the property in the trust, but that Neville was the boss, if you like. … and she had no intentions of moving into 19 and it would be ours and Andrew's for life and she wasn't really interested in the property at all except for that."
"If she is party to all this then she is party to the fraud."
"Judge I am satisfied that Pereira knew of the scheme.
Judge How am I to be satisfied that she knew it was crooked?
Counsel Well, Your Honour, I say she must have done, she knew that no money was being put in from anywhere else, other than from the mortgage that was apparently being raised to pay the property –
Judge She had already applied for the mortgage?
Counsel She applies for the mortgage, she is aware through her solicitors that the money that is raised by the mortgage is not going to the bank, because it is going to Mr James. She gives authority to Mr James to act on her behalf with -
Judge Yes, yes."
"had no idea at all as to the arrangements that Neville James was putting in place or any of the detail that he had discussed with the Pains. I was never party to any of their business dealings or negotiations and no one ever explained matters to me. In particular I had no idea that the Pains were intending to stay in the property having sold it."
The appeal against Judge Ellis' order refusing the application under rule 39.3(3)
The appeal against Judge Milligan's order made at the trial
Lord Justice Gross:
i) An applicant cannot achieve by the backdoor of an appeal that which could not have been achieved or which the applicant failed to achieve by way of an application under CPR rule 39.3(3).
ii) There may, however, be distinct grounds, unconnected with the applicant's absence from the trial, on which an applicant who has or would have failed in an application pursuant to CPR rule 39.3(3), may nonetheless be entitled to appeal. In this regard, the applicant's position is and ought to be no different in principle from any other litigant, although, as demonstrated by both the Master of the Rolls and Lloyd LJ, there may well be acute practical difficulty in introducing new arguments or evidence which could have been advanced or adduced at the trial which the applicant failed to attend.