Bank of Scotland Plc v Hoskins
| Jurisdiction | England & Wales |
| Judge | Mr Justice Foskett |
| Judgment Date | 19 July 2013 |
| Neutral Citation | [2013] EWHC 4779 (Ch) |
| Docket Number | Claim No: TLQ13/0126 |
| Court | Chancery Division |
| Date | 19 July 2013 |
[2013] EWHC 4779 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building,
110 Fetter Lane,
London EC4 1NL
Mr Justice Foskett His Honour Judge Hull
Claim No: TLQ13/0126
Mr T Stone (instructed by Eversheds) appeared on behalf of the Claimant.
Mr G McMeel (instructed by Michelmores) appeared on behalf of the Defendant.
Approved Judgment
Friday,19 July 2013
I held a CMC in this matter on Monday 15 July. It had been directed by Mr Paul Girolami QC, sitting as a Deputy High Court Judge, on 4 December 2012, at the first CMC since this case had been transferred to London from the High Court Chancery jurisdiction in Bristol in August 2012. I will say a little about the procedural history shortly, because of one of the issues I have been asked to determine.
The essence of the dispute can be stated in the following way. Underlying the case is a complaint made by Mr Hoskins about the way the Bank's support for a company known as Eirx Therapeutics plc ("Eirx") was, as he would say, promised on 1 April 2008 and then withdrawn or not provided several months later, after the company had announced publicly, by means of a regulatory news service statement, that the Bank was maintaining funding. This had a serious effect upon the company itself and its business reputation with, it is alleged, consequent significant losses for both. The Bank's case is that the support was never promised, and that the losses alleged are, in any event, illusory or speculative.
In anticipation of the facility for the company, Mr Hoskins provided a personal guarantee up to £350,000, which was secured on a substantial residential property in Tavistock of which he is the freehold proprietor and the second defendant, his wife, an occupier. After the failure of Eirx because, Mr Hoskins says, of the Bank's failure to honour its commitment, the Bank sought to enforce the guarantee and proceedings were begun in the Plymouth County Court, seeking possession of the property, together with a money judgment. Such causes of action as may have been available to the company against the Bank have been assigned to Mr Hoskins and have been advanced as a defence and counterclaim to those possession proceedings. I will return to the issue of the format of those proceedings shortly.
That is a very rough and ready description of what the case is about. Mr Hoskins will undoubtedly suggest that the plug was pulled from the previously agreed facility at a time when the Bank itself was on the brink of its well-publicised difficulties. The material events occurred between about February and August 2008, although the disclosure thus far has revealed matters, on his case, of significance in the autumn of 2007. The disclosure to date has, on Mr Hoskins' case, revealed a significant disparity between the Bank's internal communications and the information communicated to Eirx by the Bank's commercial relationship managers, particularly by Mr Chris Strain, who was the direct link with Mr Hoskins and others within the company during the material period.
The essential allegation is that the Bank owed a duty, both to the company and to Mr Hoskins personally, not to misrepresent the Bank's position in relation to support for the company, and that that is indeed what happened. The disclosure has revealed that the Credit Sanctioning Department of the Bank had said to Mr Strain in October 2007, when sanctioning a facility up to 31 March 2008, that the facility was to be "regarded as a one-off and the maximum level of our support. Any request for an increase/extension will not be looked on favourably". It is alleged that this essential message was never communicated by Mr Strain to Mr Hoskins, or any of his colleagues associated with the company.
The claim against the Bank is pleaded on the basis that his causes of action are as assignee of the company's claims for breach of contract and estoppel by convention, and as assignee and in his own right for the torts of negligence and negligent misstatement, the background factual scenario being along the lines I have indicated. As I have indicated, the Bank takes issue with the causes of action as alleged, and indeed in relation to that factual scenario. I have indicated its views on the quantum of any damages, if liability was to be established.
The first issue I have to consider is the question of whether the possession proceedings are properly located, as they presently are, in the High Court and, if not, what should happen to them pending the trial of the counterclaim. It is common ground that the county court has exclusive jurisdiction in relation to a claim for possession of mortgaged property, and it would be necessary for the High Court judge ultimately assigned to the trial of this case to be appointed a circuit judge for the purpose in order for that jurisdiction to be exercised here – see Lexi Holdings v Pooley [2008] EWHC 2113 (Ch). However, the Bank seeks an order that the possession claim be detached from the counterclaim and transferred back to Plymouth County Court, leaving the counterclaim as the sole action proceeding in this court. The intention, as I understand it, would be that the Bank would seek a possession order fairly quickly, to which there is no defence.
The issue is whether what would otherwise be an inevitable order for possession ought to be postponed until the counterclaim has been resolved. The general rule is well established, that the existence of a counterclaim does not ordinarily affect the mortgagee's right to possession – see, for example, Citibank Trust Limited v Ayivor [1987] 1 WLR 1157.
It is of some significance to see how the present procedural position has emerged. As I have already indicated, the essential complaint of Mr Hoskins against the Bank emerges as a result of what the Bank did on or around 14 July 2008. It appears that the company wrote to Mr Stuart Rogerson, a relationship manager with the Bank who managed the team of which Mr Strain was a member, on 1 August 2008, setting out its complaints about the action of the Bank. At an early stage, therefore, the essential nature of the complaint was articulated clearly, even though at that stage the internal documentation revealed by the disclosure process to which I have referred was not available to the company or to Mr Hoskins. I do not have the full story of the communications between both sides thereafter, but in February 2009 a demand for payment of the amount of the facility in Mr Hoskins' name, plus interest, was made. It was just under £477,000, with interest of just over £55,000. Interest has, of course, continued to accrue since then. Although the demand was made then, the present possession proceedings were not begun until January 2012. No urgency, so far as the possession proceedings were concerned, was displayed. During the interim period, there was correspondence between Mr Hoskins' solicitors and the Bank and its advisors. There is a letter constituting a preliminary notice of claim from Mr Hoskins' solicitors dated 30 August 2009. By then, Mr Hoskins was an assignee of any claims that the company may have had against the Bank. At that stage, of course, Mr Hoskins' advisers were unaware of the material subsequently disclosed, to which I have referred.
The solicitors acting for the Bank at the time when the possession proceedings were issued were Underwood & Co, and a Mr Paul Twomey had conduct of the matter. In a witness statement of 21 August 2012 he indicated that, in the light of the pre-action correspondence,...
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