Dr Geoffrey William Guy v Mrs Nihal Mohammed Brake

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 was handed down remotely at 6 pm on 23 June 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction

On 14 October 2022, the applicants applied by notice for an order to cancel the mental health crisis moratorium (“MHCM”) into which the first respondent had been entered at about the end of August 2022, under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the 2020 regulations”). These regulations were made on 17 November 2020 under section 7(2) of the Financial Claims and Guidance Act 2018, and came into force on 4 May 2021. The application notice was supported by a witness statement from Harry Spendlove (the applicants' solicitor) dated the same day, and also by his earlier witness statement of 15 September 2022. As will appear, the resolution of that application is still some way off. The present judgment is concerned only with what directions ought to be given to lead to the substantive application.

The application notice itself sought those directions. Originally, an oral hearing was listed for 20 January 2023 to consider them. For various reasons, I decided to convert this into a series of paper submissions followed by a written judgment, a process to which both sides agreed. At that time, I thought I would be able to deal with this aspect of the matter relatively quickly. Unfortunately, I was mistaken, and more urgent matters soon overtook me. With the benefit of hindsight, it would have been preferable if I had them asked another judge to deal either with this, or with one of the other more urgent matters. I am therefore sorry that this has taken so long to decide. However, it was common ground, at least from the beginning of this year, that, because of other litigation between the same parties (some before me), the application could not have been listed before July 2023, and the first respondent in fact asked that it not be listed until August at the earliest. So, the impact on the parties is less than it might have been.

The background to this litigation is long and complicated, with many different proceedings in different jurisdictions. Many judgments, at various judicial levels, now litter the pages of various series of law reports and occupy file space on legal computer databases. A very general introduction may be found in Brake v The Chedington Court Estate Ltd[2022] EWHC 366 (Ch), [4]–[19]. For present purposes, what matters is that the applicants (collectively called the Guy Parties, because the first applicant and his wife directly or indirectly own the second and third applicants) claim to be owed in excess of £2.3 million pounds by the first respondent and her husband in unpaid damages and costs awards as a result of the litigation so far. The present application is made in four distinct sets of proceedings: (1) insolvency proceedings under references 166 and 167 of 2015, and 21 of 2019; (2) the “cottage eviction proceedings” under reference F00YE085; (3) the “house possession proceedings” under reference E00YE350; and (4) the so-called “documents proceedings”, under reference BL-2019-BRS-000028.

On 6 May 2021, the first respondent's husband was entered into a mental health crisis moratorium under the 2020 regs. On 25 June 2021, the now second applicant and the third applicant (but then called Axnoller Events Ltd) applied for an order cancelling his moratorium. That application was based on so-called “prejudice grounds” alone, whereas the present application is also made on “eligibility grounds”. (I explain these informal terms further below.) The first application was dealt with summarily, without detailed evidence being filed, at a remote hearing lasting half a day. On 17 August 2021, I handed down judgment refusing that application, although granting alternative relief sought: [2021] EWHC 2308 (Ch), [2021] 1 WLR 6218. Until recently, that was the only decision of which I was aware concerning such applications.

According to the official Insolvency Service notifications, the first respondent was entered into her moratorium on 27 August 2022 in relation to the second and third applicants, and 2 September 2022 in relation to the first applicant. The exact dates do not however matter. The assessment of the first respondent which led to the moratorium was carried out by a mental health team operated by the third respondent. The applicants applied for a review and cancellation of the moratorium under regulation 17 of the 2020 Regulations, as they were entitled to do (see [2021] EWHC 2308 (Ch), [23]–[25]). On 29 September 2022 the debt adviser administering the moratorium (the second respondent) concluded on a review that the criteria for cancellation were not met. In the meantime, the applicants had made a further application, dated 12 September 2022, under regulation 7(2)(b), to allow enforcement of certain debts caught by the moratorium to continue. On 4 November 2022, I handed down judgment allowing that application: Brake v Guy[2022] EWHC 2797 (Ch). But, again in the meantime, the applicants had on 14 October issued the present application.

The 2020 regulations

The 2020 regulations are divided into four parts.Part 1 deals with general provisions, Part 2 with the breathing space moratorium, Part 3 with the mental health crisis moratorium, Part 4 with debt respite scheme administration, and Part 5 with supplemental provisions. For present purposes the relevant provisions are, first, in Part 3 (dealing with the conditions under which a mental health crisis moratorium can exist), and then in Part 1 (dealing with how a moratorium of either kind can be reviewed and brought to an end).

Part 3 relevantly provides as follows:

“28(1) A mental health crisis moratorium is a moratorium under this Part in respect of a debtor who is receiving mental health crisis treatment.

(2) In these Regulations, a debtor is receiving mental health crisis treatment when the debtor—

(a) has been detained in hospital for assessment under sections 2 or 4 of the Mental Health Act 1983,

(b) has been detained in hospital for treatment under section 3 of that Act,

(c) has been removed to a place of safety by a police constable under sections 135 or 136 of that Act,

(d) has been detained in hospital for assessment or treatment under sections 35, 36, 37, 38, 45A, 47 or 48 of that Act, or

(e) is receiving any other crisis, emergency or acute care or treatment in hospital or in the community from a specialist mental health service in relation to a mental disorder of a serious nature.

(3) In this regulation ‘specialist mental health service’ means a mental health service provided by a crisis home treatment team, a liaison mental health team, a community mental health team or any other specialist mental health crisis service.

29(1) Any of the following persons may submit an application to a debt advice provider for a mental health crisis moratorium in relation to a debtor—

(a) the debtor,

(b) the debtor's carer,

(c) an approved mental health professional,

(d) a care co-ordinator appointed in respect of the debtor,

(e) a mental health nurse,

(f) a social worker,

(g) an independent mental health advocate appointed in respect of the debtor for the purposes of arrangements made under sections 130A( 1) or 130E(1) of the Mental Health Act 1983,

(h) an independent mental capacity advocate appointed in respect of the debtor for the purposes of arrangements made under section 35(1) of the Mental Capacity Act 2005,

(i) a relevant person's representative,

(j) an approved mental capacity professional approved under paragraph 39 of Schedule AA1 to the Mental Capacity Act 2005, or

(k) an appropriate person as specified in paragraph 42(5) of Schedule AA1 to the Mental Capacity Act 2005.

(2) The application must include the following information—

(a) sufficient information to identify the debtor, and

(b) evidence from an approved mental health professional that the debtor is receiving mental health crisis treatment.

(3) For the purpose of paragraph (2)(b), evidence from an approved mental health professional must include the following—

(a) sufficient information to identify the debtor,

(b) the name and contact details of the approved mental health professional,

(c) the name and contact details of the debtor's nominated point of contact,

(d) a declaration by the approved mental health professional that the debtor is receiving mental health crisis treatment, and

(e) a signed statement by the approved mental health professional that the evidence is, to the best of their knowledge and belief, correct.

[ … ]

30(2) Having considered an application for a mental health crisis moratorium, a debt advice provider must initiate a mental health crisis moratorium on behalf...