Lydia Ndyabahika v Hitachi Capital UK Plc
| Jurisdiction | England & Wales |
| Judge | Jarman |
| Judgment Date | 19 March 2021 |
| Neutral Citation | [2021] EWHC 633 (Ch) |
| Date | 19 March 2021 |
| Docket Number | Case No: CH-2020-000308 |
| Court | Chancery Division |
[2021] EWHC 633 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS OF
ENGLAND AND WALES
APPEALS LIST
On appeal from the order of District Judge Smith dated 254 July 2019
Rolls Building, Fetter Lane
London EC4A 1NL
HIS HONOUR JUDGE Jarman QC
Case No: CH-2020-000308
Ms Beatrice McCauley Slowe (of MLS Legal) for the appellant
Mr Brian Addlestone (of Addlestone Keane Solicitors) for the respondent
Hearing dates: 2 March 2020
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.
HIS HONOUR JUDGE Jarman QC
HH Jarman QC:
The appellant seeks to appeal a bankruptcy order made against her as long ago as 19 September 2019 in the County Court at Medway by District Judge Smith. The appellant appeared in person on that occasion assisted by her husband. The petitioning creditor, the respondent in this appeal, was represented by an agent employed by its solicitor Brian Addlestone of Addlestone Keane.
The recording equipment was not working during the hearing, and so all that there is available by way of record is the judge's very brief handwritten note taken during it, a note of the respondent's agent, the appellant's notes thereon and the judge's further comments on the parties' notes.
Once these were obtained, Fancourt J by order dated 31 July 2020 gave directions for the listing of the appellant's application to bring the appeal out of time, and subject to permission being granted, for permission to appeal, with the hearing of the appeal (subject to permission) to follow. Paragraph 3 of the order provided that the parties must be prepared at that hearing to address whether the hearing before the district judge was the first hearing of the bankruptcy petition, the amount of the debt at that hearing and correspondence (including any offers) between the parties.
It is these applications which came on for hearing before me. The appellant was represented by Ms McCauley Slowe. The respondent was represented by Mr Addlestone, who does not have Higher Court Advocates rights and applied for permission to appear. This was not objected to, and given his long involvement in the matter and having regard to the overriding objective I granted permission.
The background to the bankruptcy order is that the appellant entered into a fixed sum loan agreement regulated by the Consumer Credit Act 1974 with the respondent dated 22 July 2008 for credit of £3689 to repair facias soffits and guttering at the family home at 120 Poplar Road Strood Kent NE2 2NT (the property). The loan was to be repaid by 96 monthly payments of £80.73 and the agreed interest rate was 13.7% per annum variable.
The respondent's account statements shows that the first three payments due in the last three months of 2008 by direct debit were rejected, leading to the imposition of rejected direct debit charges, letter charges and other fees. The appellant says this is because she fell ill and could not work, and witness statements she has filed in this appeal exhibit documents to corroborate that. A payment of £150 was made in April 2009 but on 4 July 2009 the respondent obtained default judgment against the appellant for £7815.42 plus costs of £405. Legal costs of £547.80 were added to the account. On 19 October 2009 the respondent obtained a charging order on the property.
In her witness statement dated 16 October 2019 in support of the appeal, the appellant says that when she found out about the judgment she approached Eurodebt Financial Services and exhibits letters from that organisation in July 2009 on which it is stated that that name is a trading style of Pentagon (UK) Ltd (Pentagon) and that it is a licenced debt adjuster. Subsequent letters confirm that a single payment plan was due to commence in November 2009. Her bank statements are also exhibited which show monthly payments to Pentagon. The respondent's statement shows that between December 2009 and December 2010 payments of £111.84 were made most months by cheque, but then stopped. The appellant says that she made payment to Pentagon for two years and believed the debt to the respondent had been paid off. It appears that that company is now in administration.
She then says that in September 2018 out of the blue the respondent sent her a demand with an account summary showing that she was in debt in the sum of £7092. By letter dated 12 th of that month Mr Addlestone's firm wrote to the appellant address at the property. Its wording, which appears to give some support to the appellant's version on this point, included the following:
“We act on behalf of the [respondent]. We attach a Final Charging Order obtained in the Medway County Court on 19 October 2009 for ease of reference. The sum of £7205.02 remains due and owing. It is now our client's intention to remove the security and proceed with bankruptcy proceedings unless satisfactory proposals have been received into our offices in within the next seven days.”
Her husband in his witness statement says that he tried to contact the debt adjuster and the respondent many times but received no reply or was told he could not deal with the matter. It is not clear what happened so far as the respondent or Pentagon were concerned between 2010 and 2018.
On 6 February 2019 the respondent says it served a statutory demand on the appellant in the sum of £7365.02. Initially the appellant denied receiving this but the respondent filed a certificate of personal service dated 7 February 2019 signed by a process server who says the appellant identified herself to him at the time of service, and this point does not appear to have been pursued before the district judge and was not pursued before me.
On 21 June 2019 the respondent filed a petition for bankruptcy in the County Court at Medway based on the failure to comply with the statutory demand. It is not in dispute that the petition was duly served on the appellant. The petition indicated that the debt was secured, but that the respondent was willing to give up that security for the benefit of all the creditors on the making of a bankruptcy order pursuant to section 269 of the Insolvency Act 1986.
The endorsement on the petition completed by the court indicated that it would be heard on 30 September 2019 at 15.30 at Medway. It also gave notice to the appellant that if she intended to oppose the petition, she must, not later than 5 business days before the day fixed for the hearing, file a notice with the court and deliver a copy to the respondent's solicitor. Such a notice is required, by rule 10.19 of the Insolvency (England and Wales) Rules 2016 (the 2016 Rules), to identify the proceedings, to state that the making of a bankruptcy order is opposed, and to state the grounds
No such notice was filed. However, by letter dated 9 September 2019 to Mr Addlestone, the appellant's husband wrote to confirm that his wife had been ill and off work and that he had tried to contact the respondent during this time but received no response. He said that she had resumed work on the fourth of that month, and that he would “take full responsibility in paying the outstanding debt…” He made an offer to pay the debt by monthly instalments of £168 so that after 12 months £2016 would be paid and that the total would be paid over three and a half years. He added:
“In the meantime, it would be helpful if you could hold action [by] your client as we act in resolving this situation.”
On 17 September he and the appellant wrote again giving full details of the family's financial budgets, saying that:
“This is to state that this is our financial position and we can be able to make repayments to [the respondent] for the outstanding debt if agreed. During this period if we get any change of circumstances, we will have no choice other than to sale our house and pay off all the outstanding.”
By letter dated 20 September Mr Addlestone replied simply saying that regrettably the proposal was not accepted and that he was instructed to proceed with the bankruptcy hearing on 30 September.
The appellant and her husband attended the hearing on 30 September. The appellant's husband indicated to the respondent's agent before the hearing that his mother in law was willing to pay off all the debt. It had been hoped that she would attend the hearing but she had been taken ill that morning. They also said that they had recently appointed agents, Robinson Jackson, to sell the property and that there was an interested buyer.
The judge's comments on the parties' notes of the hearing indicates that it was listed as part of a busy possession list (as per local listing protocol) with a time estimate of 10 minutes. The hearing was called on, and these three offers to pay the debt were repeated, as her handwritten note confirms. There is no reference in any of the notes of the hearing to a certificate that the debt remained due (as required by rule 10.24 of the 2016 Rules) or to a list of supporting or opposing creditors (as required by rule 10.20). Mr Addlestone told me that he emailed copies of such documents to his agents under email dated 24 September 2019 according to his usual practice and although he himself was not present during the hearing his agents were experienced agents whom he had engaged on many such hearings. It did not form part of the grounds of appeal that these documents were not duly handed in and it is likely on the information before me that they were, although...
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