Ropaigealach v Barclays Bank Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Chadwick,Lord Justice Clarke,Lord Justice Henry |
| Judgment Date | 18 December 1999 |
| Neutral Citation | [1998] EWCA Civ J1218-2 |
| Judgment citation (vLex) | [1998] EWCA Civ J1218-18 |
| Docket Number | Case No: QBENI 98/0175/1 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 December 1999 |
[1998] EWCA Civ J1218-18
Lord Justice Henry
Lord Justice Chadwick
and
Lord Justice Clarke
Case No: QBENI 98/0175/1
IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CARDIFF DISTRICT REGISTRY
(MR JUSTICE LONGMORE)
Royal Courts of Justice
Strand, London, WC2A 21L
MR ANTHONY SCRIVENER QC & MR NORMAN JOSS (instructed by Messrs Phoenix Walters, Commercial Law Department, Cardiff CF2 3AB)appeared on behalf of the Appellants
MS ELIZABETH GLOSTER QC & MR MICHAEL SULLIVAN (instructed by Messrs Eversheds, Fitzlan House, Fitzlan Road, Cardiff CF2 1XZ) appeared on behalf of the Respondents
1. This is an appeal from the order made on 30 July 1997 by Mr Justice Longmore, in the Cardiff District Registry, dismissing Mr Ropaigealach's appeal from a decision of the District Judge to dismiss these proceedings. The appeal raises a point of some general importance as to the effect (if any) of section 36 of the Administration of Justice Act 1970 in a case where a mortgagee has taken possession of the mortgaged property by peaceable entry and without first obtaining an order of the court.
The facts
2. The proceedings concern a dwelling house known as 16 Windsor Esplanade, Butetown, Cardiff. The property is registered at HM Land Registry under title number WA 175003. On 30 September 1988 Seoirse Trebahr Ropaigealach and his wife Melini Savuciri Ropaigealach, as registered owners of the property, executed a legal charge to secure their indebtedness to Barclays Bank plc. The legal charge contained, in clause 1, a covenant by Mr and Mrs Ropaigealach that they would, on demand in writing, pay to the bank all monies which should from time to time be owing by them to the bank. Clause 5 excluded the provisions of section 103 of the Law of Property Act 1925. That clause went on to provide that, as between the bank and a purchaser from the bank, the statutory power of sale should arise on and be exercisable at any time after the execution of the legal charge; but that, as between the bank and the mortgagor, the bank should not exercise its power of sale until payment of the monies secured by the legal charge had been demanded. The legal charge made no express provision for the mortgagor to be or remain in possession of the property.
3. Demand for repayment was made by letter dated 27 September 1995 addressed to Mr Ropaigealach at 16 Windsor Esplanade. The demand was for payment of £63,873.41. It is not in dispute that that was a valid demand under the legal charge; nor that Mr and Mrs Ropaigealach have not repaid the sum demanded, or any other sum, since the demand was made.
4. On 8 October 1996, the bank informed Mr Ropaigealach by letter that it was taking steps to realise its security. A letter in the same terms was sent to Mrs Ropaigealach at a different address. The bank wrote again, on 7 November 1996, to Mr and Mrs Ropaigealach at 16 Windsor Esplanade:
"Please note that as we have not received your proposals for repayment of your liabilities to Barclays Bank plc, we are now taking steps to realise our security and sell 16 Windsor Esplanade under our power of sale.
The property will be entered for sale in Crown & Co's forthcoming auction which is due to be held on the 26 November 1996."
Mr and Mrs Ropaigealach were not living at 16 Windsor Esplanade at that time. It is said that the property was undergoing repair or refurbishment; and that, for that purpose, it was empty. In any event they each deny having received the letter of 7 November 1996.
5. The auction took place on 26 November 1996. The property was listed as Lot 65. The special conditions of sale, incorporated in the auction particulars, provided for a contractual completion date of 17 December 1996. Special condition 4 made it clear that the sale was a sale by a mortgagee:
"4. The seller will transfer the property in exercise of the power given to it by section 101 of the Law of Property Act 1925 and in exercise of the power conferred on the seller by the legal mortgage. A copy of the legal mortgage together with evidence of the title to the property having been made available to the buyers or solicitors for the buyer prior to the date hereof, the buyer shall be deemed to have full knowledge of the contents of the same and shall not be entitled to raise any requisitions or make any objection with regard thereto."
Special condition 5 expressly excluded the covenants for title on the part of the seller—thereby excluding the limited title guarantee that would otherwise have been implied under section 3 (3) of the Law of Property (Miscellaneous Provisions Act) 1994. It is clear that the bank was giving no warranty that the purchaser would obtain vacant possession or that he would take free from whatever rights of possession or occupation Mr and Mrs Ropaigealach, as mortgagors, might enjoy.
6. The property sold at auction at a price of £77,000. Completion took place on or about 17 December 1996 in accordance with the special conditions. No covenants for title were given in the transfer to the purchaser. On 31 December 1996 the bank wrote to Mr Ropaigealach at a different address, 1 Bute Esplanade, Cardiff, in the following terms:
"This property [16 Windsor Esplanade] was sold by Barclays Bank plc at auction on the 26 November 1996. Title to the property was conveyed under the power of sale conferred upon Barclays Bank plc by virtue of the legal charge executed by you over the property. The power of sale arose immediately formal demand for repayment of your borrowings was served upon you on 27 September 1995.
The sale of the property has now been completed with title being transferred to the purchaser. The net sale proceeds of £76,439.25 have been received and placed in reduction of your liabilities to Barclays Bank plc."
These proceedings
7. In the meantime, it appears that Mr Ropaigealach had discovered from a neighbour that the property had been sold. He confirmed this with the auctioneers. He consulted solicitors. On 30 December 1996 he swore an affidavit in support of an application ex parte for an injunction restraining the bank from proceeding with the sale. That application was refused; no doubt because it was too late for the relief sought by Mr Ropaigealach to be of any use. The sale had already been completed.
8. On 6 January 1997 Mr Ropaigealach issued an originating summons in the Queen's Bench Division, Cardiff District Registry, to which the bank was made respondent. The summons was reissued in an amended form on 15 January 1997. By the amended summons Mr Ropaigealach sought the determination of the court on the following question:
"Whether the defendant as mortgagee of the property named in this matter, or otherwise, was entitled by law [particularly, having regard to the provisions of section 126 and other provisions of the Consumer Credit Act 1974, and regulations made thereunder, and to the provisions of section 36 of the Administration of Justice Act 1970 as amended by (or affected by) section 8 of the Administration of Justice Act 1973] to take possession of the property, on a date unknown, and sell it by auction, to persons unknown, on or about 27 November 1996, without first having sought and obtained the order of the appropriate court."
The hearing of the summons was fixed for 1 May 1997 before the District Judge. On 17 March 1997 Mr Ropaigealach gave notice of his intention to apply for directions; including an order for discovery and "such other orders or directions under RSC Order 27 Rule 4 (2) as the Court may deem appropriate having regard to the fact that the action is not yet ready for final hearing or trial".
9. The District Judge took the view that the matter could be dealt with summarily. On 1 May 1997 he dismissed the application of 17 March 1997; dismissed the originating summons of 15 January 1997; and ordered that Mr Ropaigealach pay all the costs. Mr Ropaigealach appealed to the Judge. The appeal came before Mr Justice Longmore on 30 July 1997 in Swansea. He dismissed the appeal and refused leave to appeal.
10. Mr Ropaigealach sought leave to appeal from this Court. He was still acting in person. Leave was granted on 12 December 1997. In granting leave Lord Justice Mantell said this:
"For my own part, I am unable to find any flaw in the reasoning contained in the judgment of Longmore J, but it is apparent that this is a question the answer to which is not universally agreed. Longmore J has the Law Commission on his side, but it does appear from an article written by Miss or Mrs Alison Clarke and published in The Conveyancer July/August 1983 that, by necessary implication, the effect of section 36 of the Administration of Justice Act is that a mortgagee must first obtain the leave of the Court before proceeding to enforce its right to possession or its power of sale under the mortgage deed in relation to a dwelling house.
Because of that view and because it seems to me that this matter ought to receive the consideration of the Court of Appeal so that the profession is not left in any doubt about the position, I would grant leave."
The question for decision on this appeal
11. So it is that the appeal comes before us. Mr Ropaigealach now has the benefit of legal representation and his notice of appeal has been resettled by counsel. There is now no reliance on the provisions of the Consumer Credit Act 1974. The grounds relied upon in the notice of appeal are (i) that the Judge was wrong to uphold the decision of the District Judge to dismiss the originating summons summarily and without a full hearing and (ii) that the...
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