Hertfordshire Investments Ltd v Bubb and Another
| Jurisdiction | England & Wales |
| Judge | LADY JUSTICE HALE,LORD JUSTICE SEDLEY,LORD JUSTICE SWINTON THOMAS |
| Judgment Date | 25 July 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0725-7 |
| Docket Number | B2/1999/1005 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 July 2000 |
[2000] EWCA Civ J0725-7
Lord Justice Swinton Thomas
Lord Justice Sedley
Lady Justice Hale
B2/1999/1005
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EDMONTON COUNTY COURT
(His Honour Mr Judge Riddell)
Royal Courts of Justice
Strand, London WC2
MR MICHAEL CRANE QC (instructed by Messrs Millers, Shern House, 16 Milbourne Road, Bushey, Herts WD2 3LN) appeared on behalf of the appellant
MR MARK WARWICK (instructed by Messrs Blank Swerner Grant, 4 Shakespeare Road, Finchley, London, N3 1XE) appeared on behalf of the respondent
Tuesday, 25th July 2000
: This is an appeal from an order of HHJ Riddell in the Edmonton County Court made on 2nd July 1999.
The claimant company is a moneylender. On 31st January 1994 it entered into a loan agreement regulated under the Consumer Credit Act 1974 with the defendants who are husband and wife, although now estranged. It lent them a principal sum of £9012 secured by a first charge on their matrimonial home, 27 Nursery Street, Tottenham, London N17. After various deductions they received only £6,300-odd. The loan was repayable by 120 monthly instalments. The contractual instalment sum was £210.28 per month, representing an annual percentage rate of 32.74 per cent, but a side letter allowed instalments of £172.73, representing a rate of 24.67 per cent, provided that payments were received before the end of each month. The defendants fell into arrears but never by a very great sum until after the end of November 1996 when the installments were increased to the higher figure. Notice of default was given on 18th November 1997. A possession action was brought on 29th May 1998. At that time the arrears were £685.03.
Various defences were raised against the claim. Paragraph 2 of the amended defence and counterclaim, which is dated 20th July 1998, alleged that Home Counties Finance Limited acted as the credit broker. The claimant was put to strict proof as to whether they were licensed as such. The defence and counterclaim also claimed relief under sections 129 and 136 of the Consumer Credit Act 1974.
There were two affidavits filed on behalf of the claimant by a Mr Stern. The first dated 3rd July 1998, before the amended defence, produced the claimant's own licence under the 1974 Act. The second dated 28th September 1998, after the amended defence, stated in paragraph 5 that he was producing the licence issued to Home Counties Finance Limited, but he actually exhibited a licence for Home Counties Credit Limited with a place of business in Barkingside and a registered office in Finchley. The trial took place before DJ Morley on 30th September 1998. He dismissed the action. It had not been shown that the broker was licensed. It is common ground that in that event the agreement is unenforceable by virtue of section 149 of the 1974 Act. It appears that the claimant did not apply for a adjournment or to be nonsuited.
On 25th November 1998 the claimant applied for the district judge's order to be set aside and the case set down for rehearing. There was an affidavit dated 26th November 1998 from a solicitor, Mr Levy, who now produced a licence for Home County Finance Limited, with a totally different place of business in Wembley and a registered office in Golders Green. By this time the arrears had mounted to £861.43.
The application was made under Order 37, rule 1, of the County Court Rules 1981 which reads:
"In any proceedings tried without a jury the judge shall have power on application to order a rehearing where no error of the court at the hearing is alleged."
The time limit is provided under subrule 5:
"Any application for a rehearing under this rule shall be made on notice stating the grounds of the application and the notice shall be served on the opposite party not more than 14 days after the day of the trial and not less than 7 days before the day fixed for the hearing of the application."
The application was, therefore, made approximately six weeks late but there was then no application made to extend the time for making it.
On 24th February 1999 it came before DJ Rose. Only then was an application made to extend time to apply, and we have seen no evidence giving an explanation for the delay on that occasion. The district judge dismissed the application. According to the later judgment of HHJ Riddell he held, firstly, that the fresh evidence did not fulfill the requirements of Ladd v Marshall: it could have been obtained with reasonable diligence at the trial; and, secondly, that there was no reason to extend time: time limits were there to be obeyed.
The claimant appealed against that order. There was an affidavit from another solicitor, Mr Buchalter, dated 25th June 1999. It simply says in paragraph 4:
"This delay was caused by my firm's failure to address the County Court Rules in relation to time limits for the making of such an application. I was unaware until shortly before issuing the application on behalf of the claimant that the application had to be issued within a period of time or that delay would prejudice the claimant's case."
The arrears had now claimed to over £1800. He continued to assert that there was no prejudice to the defendants from this delay.
On 2nd July 1999 HHJ Riddell allowed the claimant's appeal. He did order the claimants to pay the costs but he imposed no other penalty, for example in relation to interest. He dealt first with the exercise of the discretion to order a rehearing. He referred to an argument raised by Mr Griffiths on behalf of the defendants that if there was no rehearing and the claimant tried to start new proceedings, these would be met with an argument that the issue of the enforceability of the contract was now res judicata. The judge did not decide that point but he did comment that:
"Here the position is that the consequences to the claimant of not allowing a rehearing would be disastrous if Mr Griffiths' res judicata argument were to be valid. There would, therefore, be very considerable prejudice to the claimant in those circumstances."
He summed up his reasons for allowing the appeal on this point at pages 17 to 18 of his judgment thus:
"The relevant factors are, it seems to me, the importance of the new evidence —that evidence, as I have said, is obviously important; the reliability of the new evidence —there is no question as to that; whether the new evidence could have been obtained with reasonable diligence —it clearly could have been; why that evidence was not adduced at the first hearing —it was a mistake, a mistake mitigated as regards culpability by the similarity of the name, so to that extent understandable. Another factor is, of course, the consequences to the parties of the case being reopened or not being reopened, a risk of considerable detriment to the claimant if the case is not reheard. There is no prejudice to the defendant by granting the application for a rehearing, other than to deprive him of the fruits of his victory before the District Judge, a victory which on that issue was the result of a fortuitous development.
"The defendant can, of course, be compensated in costs for all that has occurred, at any rate up to the launching of this appeal. A factor, though, to be taken into account is the continuing strain and worry to him, but if the application for a rehearing was to be refused by me he would, I am afraid, still be faced with that anxiety because fresh proceedings would be launched —inevitably as the arrears are accumulating.
"As I have said, weighing up those factors, applying the over-riding objective, having regard to what is just and fair in these circumstances, I consider that the appellant succeeds on that issue."
It is noteworthy that the judge decided, as was clear, that the evidence could have been produced with reasonable diligence at the trial.
The judge dealt next with the extension of time. He referred to the cases of Mortgage Corporation v Sandoes (1997) 141 Sol Jo 30, Costellow v Somerset County Council [1993] 1 All ER 952, and Finnegan v Parkside Health Authority, The Times, 16 December 1997, the last two emphasising that it could rarely be appropriate to deny an extension of time because of a procedural default which, even if unjustified, had caused the defendant no prejudice for which he could not be compensated by an award for costs.
The judge considered the factors laid down in the Civil Procedure Rules, rule 3.9, relevant to deciding whether or not to grant relief from sanctions. He concluded at page 22 of his judgment that the vital factor which caused him also to decide this point in favour of the claimant was the effect of the claimant's claimants not being allowed a rehearing in the circumstances of the case. The first defendant now appeals from that order with the permission of Brooke LJ.
Mr Crane QC, who appears for the appellant, emphasises that this case concerns events after a final judgment had been given following a trial on the merits at which both parties were present and represented. This has an important bearing, both on the application for a rehearing and on the application to extend time. As Leggatt LJ said in the case of Shocked v Goldsmith [1998] 1 All ER 373 at page 382c:
"To equate judgments by default with judgments given after trial is heretical."
That is an important distinction between this case and the case of Vann v Awford (1986) 130 Sol Jo 682, to...
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