Bank of Scotland Plc v Peter Lisney Hoskins & Anor [2023] EWHC 306 (Ch)

“AND the Defendant counterclaims: (1) Relief under sections 140A and 140B of the Consumer Credit Act 1974 (2) Damages pursuant to the Financial Services and Markets Act 2000 (2A) Further or alternatively relief under section 36 of the Administration of Justice Act 1970 (4) Interest pursuant to section 30 5A of the Senior Courts Act 1981.”

“You must use the property as your only or main home unless we agree otherwise”

“You must confirm that no restrictions under the Agricultural Holdings Act apply to the property. The borrower must confirm to us that the property will not be used for commercial purposes.”

“13. I should also mention section 140B, which details the powers of the court in connection with a credit agreement, and prescribes one important evidential standard. Suffice it to say as to the powers of the court that considerable discretionary latitude is supplied. As to the evidential standard, it is important to note (as, indeed, the Recorder did) that section 140B(9) provides that where the debtor (or surety) alleges that the relationship is unfair, it is for the creditor to prove that it is not: the burden is squarely on the creditor; and see Bevin v Datum Finance Limited [2011] EWHC 3542 (Ch) at [59].”

“a firm must act honestly, fairly and professionally in accordance with the best interests of its customer”

“(2) If his statement of case has been served, a party may amend it only – (a) with the written consent of all the other parties; or (b) with the permission of the court.”

“(2) A defendant may make a counterclaim against a claimant – (a) without the court’s permission if he files it with his defence; or (b) at any other time with the court’s permission.”

“36. An application to amend will be refused if it is clear that the proposed amendment has no real prospect of success. The test to be applied is the same as that for summary judgment under CPR Part 24. Thus the applicant has to have a case which is better than merely arguable. The court may reject an amendment seeking to raise a version of the facts of the case which is inherently implausible, self-contradictory or is not supported by contemporaneous documentation. 37. Beyond that, the relevant principles applying to very late applications to amend are well known. I have been referred to a number of authorities: Swain-Mason v Mills & Reeve [2011] 1 WLR 2735 (at paras. 69 to 72, 85 and 106); Worldwide Corporation Ltd v GPT Ltd [CA Transcript No 1835] 2 December 1988; Hague Plant Limited v Hague [2014] EWCA Civ 1609 (at paras. 27 to 33); Dany Lions Ltd v Bristol Cars Ltd [2014] EWHC 928 (QB) (at paras. 4 to 7 and 29); Durley House Ltd v Firmdale Hotels plc [2014] EWHC 2608 (Ch) (at paras. 31 and 32); Mitchell v News Group Newspapers [2013] EWCA Civ 1537. 38. Drawing these authorities together, the relevant principles can be stated simply as follows: a) whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted; b) where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. Rather, a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission; c) a very late amendment is one made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. Parties and the court have a legitimate expectation that trial fixtures will be kept; d) lateness is not an absolute, but a relative concept. It depends on a review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of the consequences in terms of work wasted and consequential work to be done; e) gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs. In the modern era it is more readily recognised that the payment of costs may not be adequate compensation; f) it is incumbent on a party seeking the indulgence of the court to be allowed to raise a late claim to provide a good explanation for the delay; g) a much stricter view is taken nowadays of non-compliance with the Civil Procedure Rules and directions of the Court. The achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations because those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds but also the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the courts enable them to do so.” a) whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted; b) where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. Rather, a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission; c) a very late amendment is one made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. Parties and the court have a legitimate expectation that trial fixtures will be kept; d) lateness is not an absolute, but a relative concept. It depends on a review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of the consequences in terms of work wasted and consequential work to be done; e) gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs. In the modern era it is more readily recognised that the payment of costs may not be adequate compensation; f) it is incumbent on a party seeking the indulgence of the court to be allowed to raise a late claim to provide a good explanation for the delay; g) a much stricter view is taken nowadays of non-compliance with the Civil Procedure Rules and directions of the Court. The achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations because those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds but also the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the courts enable them to do so.”

“15. I was referred to a number of authorities as to the general principles governing permission to amend, including the decisions in Quah v Goldman Sachs [2015] EWHC 759 (Comm) (Carr J) and CIP Properties v Galliford [2015] EWHC 1345 (TCC) (Coulson J). Both of these authorities were considered by Stuart-Smith J. in Vilca v Xstrata [2017] EWHC 2096 (QB) . It is important to note, and I agree with his approach, that if there is no good explanation as to why an amendment is being made at a late stage that is not fatal to an application to amend. It is simply one of the factors which needs to be brought into the balance in deciding where to strike a fair balance. The authorities show that the principal matters to be considered are the timing and lateness of the amendment, the reason that it has not been made earlier, the respective prejudice to the parties, and the clarity of the amendment made.”

“Mr Hoskins was pursuing a sale of part of the Property, being the land adjoining Morwell House, which was not affected by the potential listed building issues. By letter dated 12 September 2019 the Bank formally refused consent to sale of part on the basis that it would ‘significantly impact the overall value of the security property’. The Bank is wrongfully refusing its consent and is further in breach of the Implied Duties of Good Faith, in particular by irrationally refusing to permit sale of part of the Property.”

"In answer, it has been contended that some of these points are not open to M & R on their pleading, and, furthermore, have not been foreshadowed in the affidavit evidence sworn on their behalf. One of Mr. Waller's responses to this contention has been to refer us to the general observations made by Lord Denning MR in In re Vandervell's Trusts (No 2) [1974] Ch 269, 321, as to the modern practice concerning pleadings: 'It is sufficient for the pleader to state the material facts. He need not state the legal result. If, for convenience, he does so, he is not bound by, or limited to, what he has stated.' We respectfully agree with this statement as a general proposition."

“(2) The court may order a person to be added as a new party if – [ … ] (b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue.” [ … ] (b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue.”

“60. In considering whether or not it is desirable to add a new party pursuant to CPR 19.2(2) two lodestars are the policy objective of enabling parties to be heard if their rights may be affected by a decision in the case and the Overriding Objective in CPR Part 1. … ”

“36. I take the view that in the normal course the correct test to be applied in relation to CPR 19.2(2)(b) is that which would be applied in an application to strike out a claim against a defendant had the claim already been pleaded, i.e. in an application made pursuant to CPR 3.4(2)(a) or (b). Other things being equal, I think it would make little sense if the question whether a person should be a defendant in proceedings depends on whether that person were a defendant from the start of the action or is to be joined at a later stage. Sometimes the facts on which to base a claim against a party may not emerge until after the Particulars of Claim have been served.”

“32. The respondents submit that the proposed claims against the proposed additional defendants do not have reasonable prospects of success and that the application should be dismissed on this basis. 33. It was also contended by the respondents, at least initially, that the merits of the proposed new claims must be judged by reference to the draft pleading and that regard should not be had to the evidence contained in the witness statements. … 34. This submission was founded on paragraphs 36 and 37 of the judgment of HHJ Hacon in PeCe Beheer BV v Alevere Ltd where the Judge noted that the correct test to be applied in relation to CPR 19.2(2)(b) is that which would be applied in an application to strike out a claim pursuant to CPR 3.4(2)(a) or (b). On this basis, the focus will be on whether the statement of case discloses reasonable grounds for bringing the claim on the hypothesis that the claimant will be able to establish the facts pleaded. In contrast, in a summary judgment application, a defendant may seek to rely on additional factors in witness statements to demonstrate that the claimant has no real prospects of success. 35. Nevertheless, having set out ‘the normal course’, HHJ Hacon made clear, at paragraph 38, that he considered that it was appropriate, in that case, to have regard to the witness evidence served by both sides in respect of the merits of the claim, noting that no objection had been taken by the parties to that evidence. 36. Mr Baudet's evidence was adduced and relied upon by the proposed additional defendants for the purposes of contesting the application including, presumably, the challenge on the merits. In the circumstances, it is difficult to see on what basis the respondents can properly object to the claimants relying on, or the court having regard to, that evidence for the purpose of determining whether the proposed claims disclose a good arguable case. … 37. In my judgment, it would be wrong in principle, and artificial in practice, not to have regard to Mr Baudet's evidence, submitted for the application, when considering whether the claimants have satisfied the good arguable case threshold.”

“The reality is that the purchaser of land who relies upon a building society or bank loan for the completion of his purchase never in fact acquires anything but an equity of redemption, for the land is, from the very inception, charged with the amount of the loan without which it could never have been transferred at all and it was never intended that it should be otherwise. …”

“The view that I have formed renders it strictly unnecessary to consider the ground upon which Mrs. Cann's claim failed in the Court of Appeal. What was said was that, despite her initial evidence (in her affidavit) that she did not know of her son's intention to raise any of the money required for the purchase on mortgage, nevertheless her oral evidence before the judge disclosed that she was well aware that there was a shortfall which would have to be met from somewhere. Her own account of the matter was that his reason for selling was that he was in financial difficulties, so that she must have known that he was not going to be able to meet it out of his own resources. Dillon L.J. (with whom, on this point, the other two members of the court agreed) inferred that ' she left it to George Cann to raise the balance' [1989] 2 F.L.R. 265, 276, from which he further inferred that George Cann had authority to raise that sum from the society. There was no finding to this effect by the judge, but I think, for my part, that it is a necessary conclusion once it is accepted, as it has to be, that she knew that there was a shortfall of some £4,000 apart from conveyancing costs, that George Cann was going to raise it, and that he was in financial difficulties. It is said that there was no evidence that he was going to raise it on the security of this property. There might, for instance, be other property available to him. He might obtain an unsecured loan. In the circumstances of his known lack of resources, however, this is fanciful and in my judgment the court was entitled to draw the inference that it did draw. If that is right, it follows that George Cann was permitted by her to raise money on the security of the property without any limitation on his authority being communicated to the society. She is not, therefore, in a position to complain, as against the lender, that too much was raised and even if, contrary to the view which I have formed, she had been able to establish an interest in the property which would otherwise prevail against the society, the circumstances to which I have alluded would preclude her from relying upon it as prevailing over the society's interest for the reasons given in the judgment of Dillon L.J. in the Court of Appeal.”

“(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need – (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.” (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.”

“7. … The threat of losing my house and my young family, and elderly mother (who has had serious health issues in recent weeks and who is in hospital at the date of this statement), being without a property is a very serious issue which justifies me taking time over the response and collating the evidence I need to support my position. Those details are set out below and in the attached exhibit”

“Article 8 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. [ … ] Protocol 1, Article 1 Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

“36. The second ground of appeal raised the question as to whether Briggs J was required by Article 6 of the Convention (or otherwise) to consider whether the debarring order was proportionate. Mr Flower accepted that if (contrary to his primary submission) Briggs J was right to conclude that, without the ordered disclosure, a fair trial for Ms Momson was not possible, his decision could not be challenged on the basis that it was not compliant with Article 6. He conceded that the refusal of a court to grant relief against a debarring sanction will not contravene Article 6 provided that such refusal is proportionate and is for a legitimate purpose.”

“78. In considering whether it would be appropriate to strike these actions out, I have borne in mind that doing so will deprive the Claimants of access to the court, a matter which it might be argued by the Claimants, has implications for their rights pursuant to article 6(1) of the ECHR ‘to a fair and public hearing within a reasonable time and by an independent and impartial tribunal established by law.’ However as Hale LJ (as she then was) said in Khilili v Bennett and ors EWCA [2000] EMLR 996 at [50] when considering whether a decision to strike out a claim for delay deprived a party of his article 6(1) rights: ‘National laws are entitled to regulate their domestic procedures, and this includes prescribing timetables and steps which have to be taken within a limited period. If a claimant has not complied with those rules, then normally he will not be able to complain under Article 6’.” ‘National laws are entitled to regulate their domestic procedures, and this includes prescribing timetables and steps which have to be taken within a limited period. If a claimant has not complied with those rules, then normally he will not be able to complain under Article 6’.”

“17. When the debt has to be repaid immediately If any of the things mentioned in this condition happen, you must pay us the debt immediately. 17.1 If you do not pay any two monthly payments (they do not have to be consecutive) except where the Flexible Options apply to your mortgage and gives you the right not to pay them. 17.2 If you do not pay any other money you owe under the mortgage within two months after you should have paid it. [ … ] 18.

“(1) Where the mortgagee under a mortgage of land which consists of or includes a dwelling-house brings an action in which he claims possession of the mortgaged property, not being an action for foreclosure in which a claim for possession of the mortgaged property is also made, the court may exercise any of the powers conferred on it by subsection (2) below if it appears to the court that in the event of its exercising the power the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage or to remedy a default consisting of a breach of any other obligation arising under or by virtue of the mortgage. (2) The court— (a) may adjourn the proceedings, or (b) on giving judgment, or making an order, for delivery of possession of the mortgaged property, or at any time before the execution of such judgment or order, may— (i) stay or suspend execution of the judgment or order, or (ii) postpone the date for delivery of possession, for such period or periods as the court thinks reasonable.” (a) may adjourn the proceedings, or (b) on giving judgment, or making an order, for delivery of possession of the mortgaged property, or at any time before the execution of such judgment or order, may— (i) stay or suspend execution of the judgment or order, or (ii) postpone the date for delivery of possession, for such period or periods as the court thinks reasonable.”

“It is not the function of this court to lay down rigid rules as to how busy district and county court judges should satisfy themselves of what they have to be satisfied for the purposes of sections 36 and 8. It must be possible for them to act without evidence, especially where, as here, the mortgagor is present in court and available to be questioned and no objection to the reception of informal material is made by the mortgagee. Clearly, it will sometimes be prudent for the mortgagor to put in an affidavit before the hearing. Moreover, if the mortgagee submits that the truth of what the court is told should not be accepted without evidence, then evidence will normally be necessary. In the absence of such a submission it must be for the judge to decide whether or not to act on the basis of informal material.”

“The power of suspension exercisable by the court under section 36 is conditional on its appearing to the court that in the event of the exercise of the power the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage. ‘Likelihood’ is a question of fact, to be determined by the judge on evidence before him. In the present case there was simply no evidence whatever that the mortgagors were likely to be able within a reasonable period to pay the sums due under the mortgage. They did not themselves put any evidence at all before the court. All that the court had was knowledge derived from an affidavit on behalf of the Royal Trust Co. that the mortgagors were putting the property or had put the property on the market.”