Eagle Star Insurance Company Ltd v Green and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MUMMERY,LADY JUSTICE ARDEN |
| Judgment Date | 29 January 2002 |
| Neutral Citation | [2001] EWCA Civ 1389,[2002] EWCA Civ 280 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B2/2001/1503{PRIVATE},B2/2001/2355 & B2/2001/2356 |
| Date | 29 January 2002 |
[2001] EWCA Civ 1389
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SWANSEA COUNTY COURT
(HIS HONOUR JUDGE JONES)
Royal Courts of Justice
Strand
London WC2
Lord Justice Mummery
B2/2001/1503{PRIVATE}
The Applicant appeared in person.
The Respondent did not attend and was unrepresented
Wednesday, 8th August 2001
This is an application for permission to appeal. The application is made by Mr Nigel Green in person. He wishes to have permission to appeal against a decision of His Honour Judge Jones sitting in the Swansea County Court. He made an order on 15th June this year in the following terms. First, that Mr Green and Miss Yvonne Challis give possession of Clynmelyn Farm, Llanllwni, Pencader on 10th August 2001 to the claimant, the Eagle Star Insurance Company Limited; secondly, that they pay to Eagle Star the sum of £212,866.99, being the amount currently outstanding on the mortgage on 10th August. He also directed that, without prejudice to Eagle Star's right to add the costs to the security, there should be an order that Mr Green pays Eagle Star's costs of the proceedings, and the determination of the amount payable by them and/or the Legal Services Commission be adjourned until after the determination of any wasted costs application. Liberty to apply was given as to the basis of assessment.
On 27th June an application was issued by Mr Green for permission to appeal. Permission to appeal is required under Part 52 of the Civil Procedure Rules. This is a second tier-appeal. So in order to obtain permission Mr Green must satisfy the court that the appeal which he proposes to bring raises an important point of principle or practice or that there is some other compelling reason for granting permission to appeal.
The background to the case has to be explained before I can deal with Mr Green's submissions. Mr Green and Miss Challis bought Clynmelyn Farm ("the farm") from Mr and Mrs Baker in May 1988. I was informed that the purchase was initially financed by Barclays Bank, but there was a refinancing and remortgaging in November 1989 when money was borrowed totalling £127,000 from the Eagle Star Insurance Company. The mortgage deed is dated 8th November 1989. The parties to it are Mr Green and Miss Challis, named as the borrower, and Eagle Star as the lender. By Clause 4 of the mortgage deed it is provided that:
"A. The Borrower as Beneficial Owner hereby charges by way of legal mortgage ALL the property specified in the First Schedule hereto WITH the payment to the Lender of all the principal interest and other money payable under this Deed."
The first schedule contains a description of the freehold farm, as described in the 1988 conveyance by the Bakers to Mr Green and Miss Challis. Clause 4B also provides:
"The Borrower as Beneficial Owner hereby assigns to the Lender ALL the Policy or Policies of Assurance specified in the Second Schedule hereto and all moneys to become payable under the same TO HOLD onto the Lender absolutely."
The second schedule sets out details of the policy which is assigned: its number, 1560545; its date being 15th October 1989; the insurance company is described as the lender; and Mr Green and Miss Challis as the borrower; and the amount assured and date or event upon which it is payable is given as £127,000 on 8th November 2014 or the earlier death of either borrower. The farm was unregistered land.
On 28th September 2000 Eagle Star took out a summons for possession against Mr Green and Miss Challis. They referred in their summons to the mortgage of 8th November 1989, described the farm which was charged by the mortgage, alleged that there had been arrears in relation to the mortgage, that a letter had been sent demanding repayment on 9th May 2000, and alleged that no repayment had been made in accordance with the demand.
On 3rd April 2001 in the Carmarthen County Court an order was made striking out defences in a defence served by Mr Green. Permission to appeal was granted by His Honour Judge Hickinbottom. That came before His Honour Judge Jones and led to the order, which Mr Green now wishes to appeal.
The main defence raised by Mr Green (and developed by him in his written and/oral arguments) is based on section 2 of the Law of Property Miscellaneous Provisions Act 1989. The other points he listed were these: proof of debt, validity of the mortgage, nonproduction of crucial documents and late production of bundle 3 (that is a bundle of documents produced by Eagle Star to His Honour Judge Jones). It became clear during the course of the argument, however, that the essential point which I have to consider on this application is whether there is a point of principle or practice on section 2 of the 1989 Act.
Mr Green has obviously done a lot of research and has put a lot of thought into this argument. I need to deal with it in some detail in order to do justice to his submissions. His point is this. The 1989 Act came into force before 8th November 1989. It came into force on 27th September, and so the changes in the law which it made would apply to this mortgage. He says an important change in law was made by section 2. Section 2 provides:
"(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.
(2) The terms may be incorporated in a document either by being set out in it or by reference to some other document.
(3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract."
He then refers to subsection (6), which provides that in this section "disposition" has the same meaning as in the Law of Property Act 1925. By section 205, which is the definition section of the Law of Property Act 1925, it is provided that "disposition, conveyance" and so on, has the corresponding meaning, and that would, in this case, include a transfer of an interest in land by way of security. That is in section 205(1)(ii), which provides:
"'Conveyance' includes a mortgage, charge, lease, assent, vesting declaration, vesting instrument, disclaimer, release and every other assurance of property or of an interest any instrument, except a will, 'convey' has a corresponding meaning; and 'disposition' conveyance and also a device, bequest, or an appointment of property contained in a will; 'dispose of' has a corresponding meaning."
Thus, "disposition" includes a mortgage. Therefore, Mr Green submits, section 2 applies to a mortgage being a contract for the disposition of an interest in land. He supports that by reference to Quarrel v Beckford 1 Madd at 269. He refers to a passage at 278 where Sir Thomas Plumer V-C, asked this question: what is a mortgage? and gave this answer:
"Everybody knows, it consists of two things; it is a personal contract for a debt, secured by an estate, and, in equity, the estate is no more than a pledge or security for the debt; the debt is the principal the estate is the accident."
So, says Mr Green, section 2 requires the signature of all the parties to a mortgage, being a contract for the disposition of an interest in land. He says that if you look at this mortgage at the end where the signatures appear it will be seen (on page 50 of Volume 1 of the bundles of documents) that there are the signatures of himself and Miss Challis, but there is no signature on behalf of Eagle Star. So, he submits, the mortgage of 8th November 1989 does not comply with the requirements of section 2 of the 1989 Act, which by then had come into force. He made it clear that it is not disputed that he owes money to Eagle ...
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