Bank of Scotland Plc v Peter Lisney Hoskins
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 16 February 2023 |
| Neutral Citation | [2023] EWHC 306 (Ch) |
| Docket Number | Case No: F4PP0192 |
| Court | Chancery Division |
and
[2023] EWHC 306 (Ch)
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: F4PP0192
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
BUSINESS LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
Tim Calland (instructed by TLT LLP) for the Claimant
Gerard McMeel KC (instructed by Shakespeare Martineau LLP) for the Defendant
Kate Harrington (instructed by Direct Access) for the Proposed Second Defendant
Hearing date: 9 February 2023
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment will be handed down by the Judge remotely by circulation to the parties or representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30 am on 16 February 2023
Introduction
This is my judgment on four matters in this litigation. The first in time of listing is the hearing of the claimant mortgagee's claim to possession of residential property, which is in the sole name of the defendant. This claim was issued under CPR Part 55, as long ago as 14 May 2019, in the County Court at Plymouth. The second and third matters are an application by the defendant for relief from sanctions for the late filing of evidence and an application (in the same application notice) for permission to re-amend his defence.
The final matter is an application by the defendant's wife (“Mrs Hoskins”) to be added as second defendant to the claim. As I understand the draft particulars of defence that have been provided, the purpose of this is so that she can, first of all, establish that she has an equitable interest in the property, and then, secondly, defend the possession claim, on the basis that her husband practised such undue influence on her (the claimant having constructive notice of it) that she was persuaded to agree to the security being granted over the property by virtue of which the claimant now seeks possession. All four matters were argued before me at an in-person hearing on 9 February 2023.
Background
The property was purchased by the defendant in his sole name in 2006. Most of the purchase price was provided by Halifax plc on the security of a mortgage dated 30 June 2006 upon it. There is a difference of opinion as to how much was actually advanced at this time, but, in my judgment, for present purposes nothing turns on this. The defendant, as sole legal owner, was the sole mortgagor of the property under the charge. Accordingly, he has been, for the entire time up to this hearing, the sole defendant to the claim. According to Mrs Hoskins' witness statement of 2 December 2022, she and her husband bought the property together in 2006, and she has continued to live there ever since as her home, with her husband and their three children, now aged 14, 12 and 4 years respectively, all being born since the purchase of the property. The defendant's elderly mother, Mrs Margaret Hoskins, also lived with them until December 2022.
There is in evidence a form of “Consent to Mortgage” dated 27 June 2006 and signed by the defendant's wife, by which on the face of it she agrees to postpone any interest she might have in the property to the claimant's rights under the mortgage. In her second witness statement (1 February 2023) Mrs Hoskins says that she has no recollection of signing this document, but accepts that the signature looks like hers, and in particular “the version I used when I was not happy about something”. I accept that Mrs Hoskins has no recollection of signing it, but, on the material before me, and on the balance of probabilities, I find that she did sign it. However, in the circumstances set out below, in my judgment it makes no difference even if I am wrong about that, and in fact she did not sign it.
I have also seen a further form headed “Occupiers postponement form” dated 19 December 2007, also signed by Mrs Hoskins, and witnessed by a solicitor from William Sturges solicitors. On the face of it, this document further agrees to postpone Mrs Hoskins' rights as an occupier in respect of an undated charge made between the defendant and the claimant. The charge referred to appears to have been security for a £500,000 business overdraft taken out by the defendant for the purpose of investing in other companies. For the reasons given below, it is not necessary to go further into this second charge.
By virtue of the HBOS Group Reorganisation Act 2006, the claimant has succeeded to the rights and obligations of Halifax plc under the mortgage. The property is a large country property near Tavistock, Grade I listed, the origins of which feature in the Domesday Book, but which was extensively rebuilt in the fifteenth century for the Abbot of Tavistock. It is set in land amounting to more than 240 acres, and has been featured in (amongst other publications) Country Life. It was actively marketed in 2018 by Strutt & Parker for £4.5 million. According to the defendant, it was valued at £5 million in 2021, and offers have since been made of between £3.5 million and £4.25 million.
According to the defendant's evidence, he had realised in September 2018 that he could no longer afford to make the monthly interest payments of £13,018.42. He had agreed a three-month payment holiday (subsequently extended to six months) whilst he marketed the property, as mentioned above. However, the claimant refused to extend the payment holiday further, and the defendant withdrew the property from the market. He says that he was advised to do so following an interview with local planning officers about alleged unauthorised works having been carried out at the property in 2006–07. He further says that he did this in order to relieve any purchaser of the need to acquire the knowledge which he says he had of why the planning complaints were baseless. It is unnecessary for present purposes to resolve the question whether that is true or not.
Procedure
As I say, the claimant issued the claim on 14 May 2019, shortly after the six-month payment holiday ran out. It is common ground that the last monthly payment was made in January 2019, when the defendant was in arrears of nearly £100,000. According to the particulars of claim dated 10 May 2019, the total amount outstanding at that date by way of loan was £2,625,000. At that time the arrears on the loan were said to be £150,584.52, and the total amount required to repay the outstanding liability in full would be £2,911,392.11, including legal costs. As at 20 January 2023, the arrears were said to be £689,726.68, and the total amount required to pay in full was more than £3.4 million.
On 17 September 2019, DDJ Healey transferred the matter from Plymouth to Bristol. His manuscript order stated that the transfer was “for directions to be given as to the preliminary question whether or not the defendant may rely on the confidential terms of settlement of claim number TLQ13/0126.” The preliminary question referred to the fact that earlier litigation between the same parties had been compromised by an agreement dated 24 December 2013 between them (also relating to possession proceedings of the same property, but also other matters) on terms which were to be confidential and not disclosed further. However, the defendant wished to be able to refer to the terms of that settlement in his defence (and possible counterclaim), on the basis that the compromise of the earlier proceedings “was not fairly procured”. On 6 January 2020, I ordered that any further document filed might refer to but not (without consent or court order) set out or exhibit any part of the settlement agreement between the parties.
On 17 January 2020, the defendant filed a defence and counterclaim, alleging fraud and breaches of duty by the claimant, and claiming sums exceeding £35 million in compensation. On 3 March 2020 the claimant filed a reply and defence to counterclaim, joining issue on the defence and denying the counterclaim.
Subsequently, the claimant by notice dated 21 December 2020 applied for an order striking out the defence and counterclaim of the defendant, alternatively for summary judgment. Eventually, I heard that application on 1–2 July 2021. On 17 November 2021 I handed down judgment, explaining why I was striking out the whole counterclaim. My order of that date also directed a disposal hearing, for which evidence had to be filed 14 days in advance. After considering written submissions, on 26 November I refused permission to appeal. On 3 May 2022 the Court of Appeal also refused permission to appeal.
That left the defence of the defendant. As it currently stands, this essentially pleads two points:
(1) reliance on section 36 of the Administration of Justice Act 1970 (para 68);
(2) a complaint that the claimant irrationally refused in 2019 to allow him to sell part of the land to reduce the arrears (para 69).
As I say below, however, the defendant recently applied for permission to amend his defence.
The disposal hearing
Under CPR Part 55, dealing with possession claims, a disposal hearing is normally set at the outset. In the present case that was not possible until the strike-out application had been dealt with. The claimant now seeks a possession order, on the basis that neither of the above points is any impediment. On 12 September 2022, the possession claim was listed to be heard before a district judge on 5 December 2022.
On 11 November 2022 the defendant's solicitors wrote to the claimant to state for the first time that Mrs Hoskins intended to make a claim, and also various other matters, and...
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