Promontoria (Oak) Ltd v Nicholas Michael Emanuel

Hearing date: 25 February 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.

This Judgment was handed down by circulation to the parties' representatives by email and by release to Bailii. It was not handed down in court due to the present COVID19/coronavirus pandemic. The deemed time for hand-down is 10:00am on 19 March 2020.

A. INTRODUCTION

. On 30 January 2020, I handed down a reserved judgment in this matter (Neutral Citation Number [2020] EWHC 104 (Ch), the Judgment). The hand-down was purely formal, and argument in relation to consequential matters was left over to a date for counsels' convenience. It was evident from the exchanges I had with the parties' counsel in the period commencing with the circulation of my judgment in draft that significant issues arose in relation to consequential matters. In the event, I heard careful and helpful submissions from both parties' leading counsel (Mr Sims, QC, for Mr and Mrs Emanuel, the Appellants; and Mr Riley, QC, for Promontoria (Oak) Limited, the Respondent) on 25 February 2020, and (unusually for a “consequentials” hearing) I reserved my judgment.

. For the reasons given in the Judgment, I held that Ground 1 of the appeal succeeded, whilst Grounds 2 and 3 of the appeal failed. I do not propose to repeat the terms of the Judgment, which I take as read for the purposes of this ruling. This ruling also adopts the terms and abbreviation defined in the Judgment.

. The appeal concerned the admissibility of evidence relating to a Deed of Assignment. In the Judgment, I concluded that the judge below had erred in admitting into evidence secondary evidence regarding the Deed of Assignment, when better evidence (namely the Deed of Assignment itself and related material) could have been produced without difficulty by Promontoria Oak.

. The Emanuels contended that the consequence of the Judgment meant that the order of the judge below had to be substantially unwound; Promontoria Oak, by contrast, contended that whilst the Emanuels had undoubtedly been successful in relation to Ground 1, their victory did not require any change to the order made by the judge below.

B. THE CLAIMS BEFORE THE JUDGE AND THE OUTCOME OF THE PROCEEDINGS

. The claim before the judge was for possession of the Emanuels' property – being a residential property situate at Trevowah Farm, Trevowah Road, Crantock, Newquay, Cornwall TR8 5RP (the Property) – pursuant to the Legal Charge and for a money judgment for a balance outstanding on various loan facilities. The loan facilities were originally extended by the Bank and the Legal Charge was originally in the Bank's favour.

. It was common ground between the parties that Promontoria Oak claimed as the assignee of the Bank pursuant to the Deed of Assignment. Promontoria Oak contended that it also claimed as the registered proprietor of the Legal Charge. This was disputed by the Emanuels, and it is this difference that drives the parties' divergent contentions as to the effect of the Judgment. It is a question I consider further below.

. After a trial of three days, the judge concluded that Promontoria Oak should succeed. He held (at [52] of his judgment) that Promontoria Oak was entitled to possession of the Property and to a money judgment for the sums found to be due.

. This was reflected in his order, dated 18 July 2018, which provided:

“(1) Judgment be entered in favour of [Promontoria Oak] for:

(a) £123,730.46 (the “Judgment Debt”); plus

(b) Interest from 14 May 2018 until 15 July 2018

…

(2) The [Emanuels] shall give [Promontoria Oak] vacant possession of the Property by 4pm on 13 August 2018…”

. The Emanuels sought and in due course obtained permission to appeal this order. Enforcement of the order was stayed pending the appeal. However, in parallel with the appeal, the Emanuels sought to achieve a voluntary sale of the Property (as part of the sale of other, related, properties). As to this:

(1) The Emanuels invited Promontoria Oak to agree to that sale on the basis that – after payment of all prior charges but not the sums secured by the Legal Charge – the net proceeds of sale would be held in a joint account pending the outcome of the application for permission to appeal and/or the appeal itself.

(2) Promontoria Oak rejected that proposal, making clear that it continued to rely on the Legal Charge. Promontoria Oak's position was that in order to obtain the release of the Legal Charge, the Emanuels would need to redeem it by paying all outstanding sums secured by it.

(3) Although the Emanuels made variants on this proposal, Promontoria Oak's stance remained the same. The Emanuels proceeded to sell the Property – together with the other, related, properties – under protest and without prejudice to their application for permission to appeal and/or the appeal itself.

(4) Thus, the Property was sold, and all outstanding sums secured by the Legal Charge were paid to Promontoria Oak, albeit under protest. As a result, the Legal Charge over the Property was cancelled from the title to the Property.

C. THE CLAIMS BEFORE THE COURT

(1) Introduction

. As I have noted, there was a dispute between the parties as to precisely what claims were before the court at first instance. The Emanuels contended that Promontoria Oak claimed only as assignee pursuant to the Deed of Assignment; and that if Promontoria Oak could not successfully establish its status as assignee pursuant to the Deed of Assignment, all of its claims must fall away. Since the effect of the Judgment was that Promontoria Oak could not (on the basis of the evidence adduced before the court) prove its status as assignee (Judgment at [79]), it followed (according to the Emanuels) that they were entitled to recover from Promontoria Oak the monies Promontoria Oak had received in order to remove the Legal Charge from the title to the Property.

. Promontoria Oak contended that whilst it did claim as assignee pursuant to the Deed of Assignment, the consequences of that claim failing by reason of the Judgment were nil, because Promontoria Oak claimed also as the registered proprietor of the Legal Charge. Its claims as proprietor of the Legal Charge were unaffected by the Judgment and its status as proprietor justified the order made by the judge below, which should stand notwithstanding the Judgment.

. This Section is confined to considering the claims that were before the court below.

(2) The claim form and the pleadings

. The claim form is on a standard form claiming possession of property that is residential property. It specifically references the Property and makes clear that “[t]he claimant is also making a claim for money”. 1

. The Particulars of Claim – which accompanied the claim form – provided as follows:

“1. The Claimant is a Finance Management Company and in the business of acquiring and managing financial assets.

By a deed of assignment dated 16 September 2016, between i) National Australia Bank Limited (as seller), ii) [the Bank] and iii) [Promontoria Oak] (as buyer), all the rights and obligations under the facilities and security referred to herein were assigned to the Claimant.

The Claimant has a right to possession of the [Property]

About the Mortgage (legal charge)

2. By [the Legal Charge] between the Defendants and the Bank…the [Emanuels] as legal and beneficial owners charged by way of mortgage the Property with the payment by the Defendants of all monies and the discharge of all liabilities in accordance with the covenants and provisions therein contained and the payment and discharge of all other monies and liabilities intended to be secured. A copy of the [Legal Charge] and incorporated terms and conditions, and office copy entries are attached to these Particulars of Claim at Schedule 1.”

. The Defence and Counterclaim of the Emanuels essentially made non-admissions to Promontoria Oak's claims in these paragraphs. The focus of the Emanuels' contentions was, it must be noted, on the Deed of Assignment and the fact that only the Redacted Deed of Assignment had been produced.

(3) Analysis and conclusion

. I have no doubt that Promontoria Oak claimed both as assignee pursuant to the Deed of Assignment and as the proprietor of the Legal Charge. The judge below, in paragraph 2 of his judgment, set out the true and correct position as follows: 2

“In its Particulars of Claim, [Promontoria Oak] avers that its locus standi to bring these proceedings derives from the Legal Charge dated 2 October 2008… and the [Deed of Assignment].”

. I regard this as an entirely correct statement of Promontoria Oak's claims. Moreover, this is a statement of Promontoria Oak's standing that the Emanuels did not seek to appeal. Their appeal (much as their Defence and Counterclaim) focussed on the Deed of Assignment and not on the Legal Charge.

. In short, I regard the pleadings as clear: Promontoria Oak was claiming in two capacities: as assignee pursuant to the Deed of Assignment and as the proprietor of the Legal Charge. It is important to bear in mind that, as a matter of law, and as I describe more specifically below, the Deed of...