Notting Hill Finance Ltd v Nadeem Sheikh
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Snowden,Lord Justice Peter Jackson,Lord Justice Longmore |
| Judgment Date | 25 July 2019 |
| Neutral Citation | [2019] EWCA Civ 1337 |
| Docket Number | Case No: B5/2019/0406 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 July 2019 |
[2019] EWCA Civ 1337
Lord Justice Longmore
Lord Justice Peter Jackson
and
Mr Justice Snowden
Case No: B5/2019/0406
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT NOTTINGHAM
(HHJ Godsmark QC)
Case E6PP2346
Royal Courts of Justice
Strand, London, WC2A 2LL
Robert Brown (instructed by Viceroy Legal) for the Appellant
Robin Kingham (instructed by Attwood & Co) for the Respondent
Hearing date: 10 July 2019
Approved Judgment
This appeal concerns the circumstances in which a defendant against whom an order for possession is made on a summary basis under CPR Part 55 may be permitted to raise a new point on appeal.
The facts
The facts are not in dispute. On 9 January 2018, the Defendant and the Claimant entered into a loan agreement under which the Claimant loaned the Defendant the sum of £50,000 for a term of 6 months at an interest rate of 30.04% per annum. The loan was secured by a third mortgage over the Defendant's home in Buxton. Under the agreement, the aggregate sum of £71,000, comprising the principal sum (£50,000) plus contractual interest and charges (£21,000) was repayable on 10 July 2018. Clause 7(e) of the loan agreement provided that in the event of default by the Defendant, the interest rate would rise to 12% compounding monthly, i.e. a rate of 289.6% per annum.
The Defendant did not repay the sums due to the Claimant on 10 July 2018. On 3 August 2018, the Claimant commenced proceedings against the Defendant under CPR 55. The claim form and particulars of claim were in prescribed form (forms N5 and N120 respectively). They sought an order for possession and a money judgment of £79,520, being the amount said by the Claimant then to be due. Paragraph 6(g) of the particulars of claim stated that the interest rates which had been applied to the mortgage loan to arrive at that amount were 30.04% and 289.60%.
The claim was listed to be heard before District Judge Hill in the County Court at Derby on 20 September 2018. The Defendant did not instruct lawyers or file a completed Defence Form N111M in accordance with CPR 55A PD 1.5. However, he attended the hearing in person and was represented by the duty solicitor. In addition to the claim form and particulars of claim, the only evidence before the District Judge was a two page witness statement from the Claimant which, on the second page, stated that the amount due as at the date of the hearing was £99,749.00. The breakdown of that figure was given in a statement of account towards the end of an 85-page exhibit containing the relevant contractual documents and correspondence.
The hearing before the District Judge took seven minutes. At the outset, the District Judge asked the Claimant's representative for “some figures”, which elicited the response that “the only figure that is relevant is a balance outstanding of £99,749”. The Claimant's representative then reported that after having spoken to the duty solicitor, he understood that the Defendant conceded that an order for possession would inevitably be granted. The Claimant's lawyer said that the only difference between the parties was whether the order should require possession to be given within 28 or 42 days in order to give the Defendant more time to seek new finance to clear the loan and two other prior charges on the property. After having heard brief argument, the District Judge rejected the Defendant's request for more time, and ordered possession to be given by 18 October 2018. The District Judge also entered judgment against the Defendant in the sum of £99,749, such judgment not to be enforced without permission of the court.
After the hearing, the Defendant instructed solicitors, who lodged an appeal against the District Judge's order within time on 11 October 2018 on the basis that the term providing for default interest of 289.6% per annum in clause 7(e) of the loan agreement was a penalty and unenforceable. The application for permission to appeal was listed to be heard by a Circuit Judge as a “rolled up” hearing with the appeal to follow immediately if permission was granted.
Prior to that appeal hearing, on 21 December 2018 the Defendant's solicitors also issued a separate application to set aside the District Judge's order under CPR 3.1(7) on the basis of the penalty argument and an additional argument that the relationship between the Claimant and the Defendant was unfair within the meaning of section 140A(1) of the Consumer Credit Act 1974 (the “CCA”), and that the court was entitled to delete the term as to default interest under section 140B of the CCA. That application was listed to be heard together with the appeal.
The hearing of the appeal and set aside application took place on 10 January 2019 before HHJ Godsmark QC. The Defendant did not seek to overturn the order for possession or the money judgment in relation to the sum of £71,000, but contended that there was an arguable defence that the default interest provision was a penalty or contrary to the CCA. The argument advanced by counsel was that the failure of the District Judge to address these points made his decision “unjust because of a serious procedural or other irregularity” so that the appeal should be allowed under CPR 52.21(3)(b).
For its part, the Claimant accepted that if the issue of whether the provision for default interest was a penalty had been raised before the District Judge, it would have amounted to a genuine dispute on grounds which appeared to be substantial, and the District Judge would probably not have granted a monetary judgment for that amount, but would have given case management directions for the issue to be determined under CPR 55.8(1)(b). However, the Claimant contended that because such a challenge had not been raised before the District Judge, it was too late for the Defendant to raise it on appeal.
The Judgment of HHJ Godsmark QC
In a reserved judgment, HHJ Godsmark QC allowed the Defendant's appeal in relation to the issue of default interest, and varied the District Judge's order to grant judgment limited to £71,000. HHJ Godsmark QC gave permission for the Defendant to file a Defence and Counterclaim contesting the provision for payment of default interest, remitted the claim to the multi-track, and gave further directions for that issue to proceed to trial.
In relation to the question of whether it was too late for the point on default interest to be raised on appeal, the Judge stated that he had been referred to the authorities cited in the notes in Civil Procedure (the White Book) at paragraph 52.17.3, and in particular to the following passage from the judgment of May LJ in Jones v MBNA International Bank Ltd [2000] EWCA Civ 314 (“ Jones”) at [52]:
“Civil trials are conducted on the basis that the court decides the factual and legal issues which the parties bring before the court. Normally each party should bring before the court the whole relevant case that he wishes to advance. He may choose to confine his claim or defence to some only of the theoretical ways in which the case might be put. If he does so, the court will decide the issues which are raised and normally will not decide issues which are not raised. Normally a party cannot raise in subsequent proceedings claims or issues which could and should have been raised in the first proceedings. Equally, a party cannot, in my judgment, normally seek to appeal a trial judge's decision on the basis that a claim, which could have been brought before the trial judge, but was not, would have succeeded if it had been so brought. The justice of this as a general principle is, in my view, obvious. It is not merely a matter of efficiency, expediency and cost, but of substantial justice. Parties to litigation are entitled to know where they stand. The parties are entitled, and the court requires, to know what the issues are. Upon this depends a variety of decisions, including, by the parties, what evidence to call, how much effort and money it is appropriate to invest in the case, and generally how to conduct the case; and, by the court, what case management and administrative decisions and directions to make and give, and the substantive decisions in the case itself. Litigation should be resolved once and for all, and it is not, generally speaking, just if a party who successfully contested a case advanced on one basis should be expected to face on appeal, not a challenge to the original decision, but a new case advanced on a different basis. There may be exceptional cases in which the court would not apply the general principle which I have expressed.”
HHJ Godsmark QC went on to observe that authorities after Jones have recognised that an appellate court has a discretion whether to entertain a point not taken below. He gave, as an example, a case in which a pure point of law is raised on appeal which does not require determination of additional facts. The Judge concluded,
“It seems to me that an appellate court can entertain on appeal a point not taken in the court below but the circumstances will be unusual if not exceptional. Finality of litigation is a powerful consideration.”
HHJ Godsmark QC then identified a number of features of the case which he considered relevant to the exercise of his discretion. These were,
i) the hearing before the District Judge under CPR 55 was a summary hearing, not a full trial;
ii) little time is spent on such hearings;
iii) the Defendant was, in effect, a litigant in person;
iv) the Defendant attended the hearing;
v) there is a need for finality in litigation which should be weighed heavily in any application to set aside any final order of the court;
vi) the order of the District Judge was challenged very quickly after the hearing; and
vii)...
To continue reading
Request your trial
-
Anixter Ltd v The Secretary of State for Transport
...any prejudice that would be caused to the opposing party if the new point is allowed to be taken: Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337, [2019] 4 WLR 146 at 34 In my judgment the second point is a “pure point of law”; there is no evidence that could bear on the point, and......
-
Zymurgorium Ltd v Hammonds of Knutsford Plc
...the relevant principles are well established. They were summarised by Snowden J (as he then was) in Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337 at [21] to [28]. An appellate court has a discretion to allow new points to be taken on appeal. But it will not generally allow a new p......
-
Altrad Services Ltd (Formerly Cape Industrial Services Ltd) v The Commissioners for HM Revenue and Customs
...in Singh v Dass [2019] EWCA Civ 360 per Lord Justice Haddon-Cave at [15]–[18] (approved in Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337; [2019] 4 WLR 146): “15. The following legal principles apply where a party seeks to raise a new point on appeal which was not raised below. 1......
-
Primeo Fund (in Official Liquidation) v Bank of Bermuda (Cayman) Ltd and another
...had been afforded them when in the witness box.” 153 There is, as Snowden J explained in Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337; [2019] 4 WLR 146, paras 26–28, a spectrum of cases. That spectrum ranges from a case where the new point would have caused the parties to conduc......