G. E. Capital Bank Ltd v Rushton and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RIX,Lord Justice Moore-Bick,Lord Justice Rix,Sir Anthony Clarke M.R.,LORD JUSTICE MOORE-BICK,SIR ANTHONY CLARKE |
| Judgment Date | 14 December 2005 |
| Neutral Citation | [2005] EWCA Civ 1393,[2005] EWCA Civ 1556 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 December 2005 |
| Docket Number | Case No: B2/2005/0580,B2/2005/0580 |
[2005] EWCA Civ 1393
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WALSALL COUNTY COURT
(MRS RECORDER DARBYSHIRE)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Rix
B2/2005/0580
MR WILLIAM BUCK (instructed by Andrew M Jackson of Hull) appeared on behalf of the Appellants
The First and Second Respondents appeared in person
This is an application concerning a stay of execution of an order made by Mrs Recorder Darbyshire on 3 March 2005, as amended on 16 March 2005. It arose out of a claim made by the claimants (in this court the appellants, G E Capital Bank Ltd) against two individuals (Mr Rushton and Mr Jenking) who had appeared as litigants in person at trial.
The claimants were seeking to recover in conversion the value of seven cars which, subject to the defences raised at trial, were established at trial to have been their property. They had financed, under a conditional sale agreement, a firm of garage proprietors who were involved in the sale of cars called T & T. T & T's proprietor Mr Di Cesare had applied to his friend Mr Rushton for a loan when his company was in difficulties. Mr Rushton was not willing himself to give a loan but applied, as it were, on behalf of his friend Mr Di Cesare, to Mr Rushton's friend Mr Jenking. Mr Jenking provided a loan of £40,000. When he required the repayment of it the money was obtained by Mr Rushton buying from T & T thirteen cars—including the seven owned by the claimants, the subject matter of these proceedings—for a total of some £65,000 odd. That released the £40,000, which was repaid to Mr Jenking without interest and the balance was returned to T & T. Mr Rushton and Mr Jenking set about storing the cars in a barn and looking for purchasers.
At trial, the judge had to decide whether Mr Rushton could bring himself within the nemo dat exception contained in sections 27 to 29 of the Hire Purchase Act 1964. The judge concluded that Mr Rushton succeeded in that defence on the basis that he was a private rather than a public purchaser and had bought the cars without notice of the claimants' rights, and in good faith, the burden of which under the statute lay on Mr Rushton to prove. No separate consideration seems to have been given in the judgment to Mr Jenking's position although, as a detail of the matter, I remark that one of the seven cars appears to have been sold by Mr Rushton to Mr Jenking (a VW Golf car), albeit that the agreed payment of £9,000 for that car never appears to have been completed. Ultimately the judge found that Mr Rushton had satisfied the court of his good faith, although she said that the decision had been a difficult one, a difficult and finely balanced one.
After giving judgment there was discussion before the judge as to a stay of execution. The judge clearly indicated at that time that if the claimants applied to the Court of Appeal for permission to appeal within 14 days there should then be a stay until completion of those appeal proceedings. She clearly contemplated, and it is accepted before me today on behalf of Mr Rushton and Mr Jenking, that this was the position at that time, that if the Court of Appeal were to give to the claimants permission to appeal then the stay should continue down to the result of that appeal. Ultimately, despite written submissions from the claimants that the order entered by the judge, even as amended, did not do full justice to the judge's intention as indicated at the time of judgment in the presence of the parties, her amended order stated that the payment of the judgment sum, which was due to be paid on 17 March, that is to say 14 days after the date of the order, should "be stayed for a period of 14 days to allow the claimants to lodge their appeal at the Court of appeal". Since the claimants had to lodge their appeal within 14 days of the order in any event, it is not quite clear what the judge intended by that, particularly in the light of what she had said following judgment but also in the light of the limited order which she made finally after receiving written submissions on behalf of the claimants.
In any event, the claimants did make a timely application for permission to appeal and that came, in due course, before Lord Justice Longmore. He made an order on the papers on 13 May 2005 giving permission to appeal, stating that an appeal was arguable for the reasons set out in the claimants' skeleton argument and also stating —
"stay of execution granted unless respondents apply within 14 days for stay to be lifted."
It was Lord Justice Longmore's view—without, of course, hearing from the respondents because the application for permission to appeal was dealt with on the papers in the normal way, without notice, without a hearing—that, prima facie, subject to the respondents' submissions, there should be a stay of execution pending the appeal that had been granted.
The respondents did apply—not quite within 14 days, and a time point is taken on behalf of the appellants, but it is only a matter of a day or so—for the stay to be lifted pursuant to their respondents' notice filed on 2 June 2005. That annexed to it skeleton arguments containing detailed submissions in response to the appeal. But it also contained an application for the stay of execution to be lifted on the basis that it was unjust for the appellants to benefit from their refusal to abide by High Court orders; that the stakeholder agreement that had been made between the parties, whereby the cars in question were sold to protect both parties against continued depreciation, was to the effect that the proceeds of sale should be held by the claimants' solicitors as stakeholder only "until the court makes an order"; and, thirdly, on the ground that the withholding of the judgment moneys prevented the respondents from being adequately represented on the appeal.
The order appealed from is to the effect that the claimants' claim had failed, but that the defendants (that is to say Messrs Rushton and Jenking) should recover £52,000 and some £4,000 odd by way of interest on their counterclaim. I assume—because the quantum of that counterclaim is not covered in the judge's judgment—that that was ultimately an agreed figure representing the value of the cars. But I have not heard submissions from that and I may be mis-stating that slightly.
Today Mr Jenking has spoken in person, on behalf of himself and Mr Rushton, pursuant to those arguments for lifting the stay. He submits that, ultimately, the judge's amended order could not be construed as itself imposing a stay until the outcome of any appeal. He submits, in any event, that the judge had spoken as she had done at the conclusion of giving judgment, without first asking for the respondents' submissions. He submits that Lord Justice Longmore should not, and would not, have made the order that he made if he had considered what the respondents wished to say on the subject of a stay.
Their essential points, emphasised by Mr Jenking in his capable and helpful submissions today, were that, first of all, the stakeholder agreement should lead to the release of the moneys and, secondly, those moneys are needed to enable the respondents to be represented by solicitors and counsel at the appeal. After some uncertainty as to the respondents' intentions in that respect, Mr Jenking said at first that paying for legal representation would be, if the moneys were released, at any rate, "one of our options". He assured me ultimately, however, that it was certainly their intention to appoint solicitors and counsel to conduct their appeal. Although they had conducted the trial competently and indeed successfully, and had been praised in the course of the judge's judgment for their capable conduct of their defence, nevertheless Mr Jenking submits that that lesson has shown to him and his fellow respondent that legal representation is desirable (as I can well imagine myself to be the case).
I inquired about the respondents' finances. The respondents gave evidence before the judge that they were successful businessmen. It appears from that evidence that Mr Jenking is in the property business—and indeed the £40,000 loan was made in the name of his property company, or one of his property ventures—and that Mr Rushton has been a long-time investor or speculator in stock exchange options and is also an art dealer and the owner of a night club. He owns his own house; Mr Jenking does not. Today there is no formal evidence before me, but Mr Jenking tells me that the two of them are moderately successful businessmen but that their capital is fully invested. Rather than use their capital for the costs of legal representation, on appeal they would prefer to maintain their capital in their businesses as it stands. Since therefore it appears to me, on the basis of Mr Jenking's submissions, that ultimately it was a question of cash flow, and since I have no real evidence before me as to the respondents' financial position or resources or ability to raise finance, I put to the respondents the question whether the finance for legal representation might be raised (were a stay not to be lifted) by Mr Rushton giving a charge on his house. The respondents conferred in private about that. The short answer was no.
The alternative submission was made at that point that the solicitors already in the wings were asking for £20,000 and the question was raised as to whether a partial stay, which would permit the...
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