Nihal Mohammed Kamal Brake v Geoffrey William Guy
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 04 November 2022 |
| Neutral Citation | [2022] EWHC 2797 (Ch) |
| Docket Number | Case No: BL-2019-BRS-000028 |
| Court | Chancery Division |
and
[2022] EWHC 2797 (Ch)
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: BL-2019-BRS-000028
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURT IN BRISTOL
BUSINESS LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
Mrs Nihal Brake for herself and Mr Andrew Brake, Claimants
William Day (instructed by Stewarts Law LLP) for the Defendants
Charlotte Pope-Williams (of Pinsent Masons LLP) for the Third Party
Application dealt with on paper
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 will be handed down by the Judge remotely by circulation to the parties or representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 15:30 on 4 November 2022
INTRODUCTION
This is my judgment on an application by the defendants (“the Guy Parties”) by notice dated 12 September 2022, for an order under regulation 7(2)(b) of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the 2020 Regulations”). The purpose of the order would be to permit (and therefore require) the parties to comply with an order which I made on 20 July 2022 in relation to a third-party debt order (“TPDO”), notwithstanding the entry of the first claimant into a mental health crisis moratorium under the 2020 Regulations in late August or early September 2022. Unfortunately, the matter is procedurally complex, and it is necessary for me to give a little explanation of the background before dealing with the application itself.
The parties have been locked in large-scale litigation ever since the breakdown of the former employment relationship between them in November 2018. I have so far tried four full-scale actions between them. The employment tribunal proceedings between the parties are still to be tried (though not by me). The claim in which the present application arises was brought by the Brakes against the Guy Parties in respect of alleged misuse of confidential information and infringement of privacy. At first instance, I held that the Brakes' claim failed: [2021] EWHC 671 (Ch). They appealed to the Court of Appeal, which dismissed the appeal: see [2022] EWCA Civ 235.
THE THIRD PARTY DEBT ORDER
Following the appeal, the Court of Appeal ordered that the Brakes pay the costs of the appeal of the Guy Parties, and ordered an interim payment on account of £70,000 by 4 PM on 16 March 2022. That sum was not paid on that date, nor, indeed, thereafter. The Guy Parties applied for a TPDO by notice dated 17 March 2022, but sealed only on 28 March 2022. In the notice the third party was identified as “James Hay Partnership”, of an address in Salisbury, and stated to owe money to one of the Brakes, namely the second claimant Andrew Brake. The debt was said to consist of a personal pension policy.
A TPDO was indeed made on an interim basis by Lewison LJ on 4 April 2022. He directed that the further consideration of the application should be at a hearing listed before me, to take place not before 28 April 2022. The interim TPDO was served on the James Hay Partnership by email sent on 4 April 2022, as were the application notice for the TPDO and documents in support. Receipt was acknowledged by email, expressly on behalf of the “James Hay Partnership”, by email on the morning of 5 April 2022. I directed that the hearing for further consideration of the application for a TPDO should take place before me at 2 PM on 29 April 2022.
In fact, there then followed a series of applications, which meant that the further consideration was adjourned, and did not in fact take place until 30 May 2022. Anyone interested in the exact sequence of events will find it set out in the written judgment which I eventually handed down on 11 July 2022: see [2022] EWHC 1746 (Ch). In summary, I decided that the TPDO should be made final. But, in fact, it was more complicated than that, and involved the grant of an injunction requiring Mr Brake to exercise his right to draw down his remaining pension entitlement from the third party. I also decided that the third party should pay 90% of the Guy Parties' costs of the applications, summarily assessed on the indemnity basis: see [2022] EWHC 1911 (Ch), [2022] Costs LR 1315.
Enforcement of the TPDO
My decision requiring Mr Brake to take steps to draw down his pension was made on 20 July 2022. It set out the steps to be taken by the parties, beginning with Mr Brake. A draft order was sent to me on 29 July, agreed between the defendants and the third party, with no objection in principle from the claimants. On the same day Mrs Brake confirmed that Mr Brake had taken the first step required of him, namely, asking HMRC for confirmation of his tax code. On 3 August, the Guy Parties' solicitors asked Mrs Brake whether her husband had taken the next steps envisaged by the order (sending a letter to the third party) by the time specified of 4 pm on 3 August. The same day, Mrs Brake replied saying:
“Sincere apologies. I have been having a very bad week, and have not kept an eye on things. If you give me until Monday [8 August] to get Mr Brake's forms sorted.”
In fact, on 9 August 2022 the claimants wrote to the court asking for the next steps to be postponed until 27 August, after they had returned from what they referred to as their “annual leave”. In written reasons given to the parties on 9 August, I declined to make any change to the timetable as originally set out. As I said then,
“if the second claimant is able to go away on holiday, he is able to deal with the requirements of this order”.
The claimants nevertheless challenged the reasons given by email dated 12 August. A detailed response was sent by the court on 16 August, rejecting the challenge. I am not aware of any further challenge to my decision.
MRS BRAKE'S MORATORIUM
On 30 August 2022, the first Claimant, Mrs Brake, wrote to the Guy Parties' solicitors to inform them that she had entered into what she called a “Mental Health Crisis Breathing Space” (strictly speaking, a “mental health crisis moratorium”, which under the regulations is to be distinguished from a “breathing space moratorium”) on 26 August 2022. In fact, the official Insolvency Service notifications say that this happened on 27 August in relation to the second and third defendants, and 2 September in relation to the first defendant. But I do not think anything turns on this. As I have said, this all took place under the 2020 Regulations.
The main point of these regulations was to provide sufficient protection for indebted individuals to help them to enter into sustainable debt solutions, and to encourage them to seek appropriate debt advice: see my judgment of 17 August 2021, at [18]. But there was a second and separate route into the scheme for those receiving mental health crisis treatment. This reflected the fact that this group might face challenges in meeting the requirement to engage with debt advice in order to meet the eligibility criteria: see my judgment of 17 August 2021, at [19]. Mrs Brake has apparently been entered under this alternative route. So hers is not a “breathing space moratorium”, but a “mental health crisis moratorium”.
The earlier moratorium for Mr Brake
At this stage I need to mention that Mr Brake had also entered into a similar mental health crisis moratorium over a year earlier, on 6 May 2021. (So far as I am aware, he is still in it.) After he did so, the Guy Parties made two applications. One was for that moratorium to be discharged; the other was for certain “unless orders”. The applications were heard by me on 12 August 2021. I announced my decision to the parties on 13 August 2021. I dismissed the application to discharge the moratorium, but granted the application for “unless” orders. I gave my reasons in a written judgment delivered on 17 August 2021: [2021] EWHC 2308 (Ch), [2021] 1 WLR 6218. I refused the Brakes permission to appeal on 19 August (see [2021] EWHC 2343 (Ch)), and so far as I know neither side took the matter any further.
The judgment of 17 August dealt with the structure and provisions of the 2020 Regulations, and I shall have to refer to some of what I said there for the purposes of the present judgment. One point which I decided on that occasion was that a moratorium under the regulations did not apply to future debts, ie debts incurred after the moratorium came into effect: see at [44], [51]–[70]. Accordingly, when the claimants were ordered to pay the defendants' costs of their unsuccessful appeal in March this year, that was a debt which could be enforced against the claimants despite the existing moratorium in relation to Mr Brake. Hence it was possible for the Guy Parties to apply for and obtain a TPDO against Mr Brake and his pension provider.
The effect of Mrs Brake's moratorium
However, the entry of Mrs Brake into her own moratorium has changed all that. Although the TPDO is against Mr Brake, the debt on which it is based is a joint debt of both claimants. And, as I noted at [21] of my judgment of 17 August 2021 in relation to the 2020 Regulations,
“enforcement action includes any enforcement action taken in relation to a person jointly liable with the debtor in respect of whom the moratorium has come into effect: see regulation 7(7)(n).”
That means that, without more, the TPDO cannot be further enforced against Mr Brake as previously provided by my...
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