Royal Bank of Scotland Plc v Etridge
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HOBHOUSE,LORD JUSTICE MUMMERY |
| Judgment Date | 31 July 1998 |
| Judgment citation (vLex) | [1997] EWCA Civ J0214-14 |
| Docket Number | 96/0818/H |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 1998 |
[1997] EWCA Civ J0214-14
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ANDOVER COUNTY COURT (SITTING AT ALDERSHOT & FARNHAM COUNTY COURT)
(MR RECORDER TENNANT)
Royal Courts of Justice
Strand
London WC2
Lord Justice Hobhouse
Lord Justice Mummery
96/0818/H
MR K HAMER (Instructed by Messrs Collins, Watford WD1 1EG) appeared on behalf of the Appellant.
MISS C HOFFMANN (Instructed by Fladgate Fielder, London W1H 6AD) appeared on behalf of the Respondent.
This is an appeal from a possession order made by Mr Recorder Tennant in the County Court at Andover on 19 April 1996. The defendant, Mrs Etridge, lives at the Old Rectory, Laverstoke. The plaintiffs in the action are the Royal Bank of Scotland who are the bankers of her husband and of his various businesses.
In the autumn of 1988 Mr Etridge was raising additional money for his businesses. Mrs Etridge was at that stage in the process of selling the house in which they had been living and buying in its place the Old Rectory. The bank asked Mr Etridge to provide additional security by way of mortgage on his wife's house. That led to a legal charge in the form of a mortgage being signed by Mrs Etridge on 4 October 1988 relating to all the liabilities of her husband. It was unlimited and it was a full legal charge. She executed it by signing it in the presence of a Mr Peter Ellis, a solicitor carrying on business at 17 Grosvenor Street, London, W1. Mr Ellis completed a certificate which was stamped on the document:
"I hereby confirm that prior to the execution of this document I explained the contents and the effect thereof to Mrs S R Etridge who informed me that she understood the same."
It would appear that that stamp is on the standard form of mortgage which is used by the bank.
Eighteen months later, Mr Etridge was heavily indebted to the bank. He owed the bank sums, whether in respect of his businesses or independently of them, probably in excess of £200,000. The bank demanded that he pay these sums. When he failed to do so, after some delay, they took possession proceedings against Mrs Etridge. The possession proceedings were started by way of county court summons on 19 August 1993. They used the standard form of possession summons under Order 3 rule 3, paragraph (4) which provided for a fixed date. The date was filled in 6 October 1993.
The parties lodged affidavits. There was an affidavit on behalf of the plaintiffs, which exhibited the mortgage from which I have quoted. Mrs Etridge put in two affidavits. The first affidavit was very short and probably not regarded as satisfactory, so there was an adjournment to enable her to put in a fuller affidavit which she did on 8 November 1993.
In both affidavits Mrs Etridge contended that she had been induced to sign the mortgage by the undue influence over her of her husband. In the second affidavit she expressly stated that she did not contest that it was her signature at the bottom of the charge. She then explained that the first time she saw the document was at the meeting of 4 October:
"I do remember that at no stage was my husband asked to leave the room nor did I leave the room with Mr Ellis so that he could explain matters to me alone. I did not at any stage receive what I regard as independent legal advice. I saw Mr Ellis as my husband's adviser; he was employed by my husband to advance his legal interests. I do not say this to impugn in any way Mr Ellis's integrity.
It was not my practice to read legal documents placed before me by my husband for signature. I simply signed under the pressure that I referred to above. I do not recall ever reading the Legal Charge.
At no stage did my husband indicate to me the extent of his legal liabilities or indebtedness to the Bank. I had no real or accurate idea of how much he owed."
In the light of the affidavit evidence which was before him on 1 December 1993, the District Judge gave directions that the issue between the plaintiffs and Mrs Etridge should be the subject of a trial. Thus he ordered that the defendants do file a Defence within 21 days. (He also referred to the husband who was formally a party to the action but took no part). He directed that there be a Reply from the plaintiff; discovery by lists; inspection; mutual disclosure of the statements of all those witnesses whom any party intend to lead in evidence at trial, such disclosure to take place within 28 days of completion of inspection of documents; and, that the matter be listed for trial by a Circuit Judge on the first open date after 4 months, allowing two days.
Thereafter the plaintiffs allowed the action to go to sleep and it was not resurrected until 1995. By the end of that year, both solicitors applied to the court that the court make a further order for the mutual exchange of witness statements within 56 days, and for the action to be set down for trial for a hearing to take place on the first open date after 72 days with a time estimate of 3 days.
The first order was made as asked. The second order became somewhat confused. As drawn up by the court it was that:
"The action be set down for trial by way of final pre-trial review before Circuit Judge first open date after 72 days.
This hearing will be 25 March 1996 at 10.30 am time estimate 15 minutes."
It has been suggested to us, and we accept, that that intention was clear. The intention was to make a further direction for a trial but to add to it a direction that there be a pre-trial review with an estimated time of 15 minutes on 25 March 1996.
There was then correspondence between the parties as a result of which the hearing of the pre-trial review was expected to extend beyond 15 minutes. However, when the parties' representatives attended at the county court they were not reached and the matter had to be adjourned until 19 April 1996. We are told that by that time the parties estimated time for the pre-trial review hearing was extended to half a day.
When the matter came back in April, there were applications which were either made or going to be made by one or other party. By appropriately issued notices, the defendants asked for leave to amend their Defence and for additional discovery. The plaintiffs did not issue any notice but they informed the defendants' solicitors by letter that the plaintiffs would on the hearing of the pre-trial review be applying for a possession order and also, in the alternative, leave to serve an amended Reply.
The defendants' solicitors protested at this. They said that an application for a possession order was not appropriate on a pre-trial review. It had been ordered that the matter should be the subject of a trial. On the other hand, if the plaintiffs wanted to apply to strike out the Defence, then the situation might be different. The plaintiffs did not accept that invitation. When they appeared before the Recorder sitting as a Deputy County Court Judge in April, counsel on behalf of the plaintiffs submitted quite simply that a possession order ought to be made.
On that occasion counsel for the plaintiffs was Miss Hoffmann, who has also appeared before us. She submitted to the Recorder that he always had a power to make a possession order and that he should exercise it now, notwithstanding that what he had before him was a pre-trial review, listed as such, taking place pursuant to an earlier order of the court and notwithstanding that earlier orders had been made for a trial. The Recorder held that he had this power and that it was proper for him to exercise it. He considered the draft amendments to the Defence. He considered that none of the amendments or the original Defence raised arguable defences and he made a possession order.
The appellant submits that the Recorder was wrong in two respects. First, he did not have regard to the nature of the proceedings which were before him and the County Court Rules which govern those proceedings. It was, in principle, improper for him to make a possession order on this occasion. Secondly, it is submitted that the pleadings and the affidavits disclose arguable defences. Therefore, the Recorder should not have been persuaded to treat the occasion as one when it was appropriate to make a possession order, and he should not have made such an order on the merits because there were issues which had to be tried.
In evaluating these arguments of the defendant, it is necessary to have regard to the scheme of the County Court Rules. We are indebted to counsel, who are familiar which these rules on a day to day basis, for taking us through them. The summons is issued under Order 3 rule 3. That order provides for there to be a fixed date for the hearing of the claim raised by the summons. It therefore contemplates that on that fixed date an order might be made, the matter might be adjourned or directions may be given. This is clearly a convenient scheme. Various qualifications of Order 3 rule 3 which apply to other forms of procedure do not apply to possession actions. There are other rules which also do not apply to possession actions, for instance, Order 9 rule 14 (which provides for summary judgment to be given). Similarly, under Order 3 rule 3, Order 17, which is the pre-trial review Order, does not have any automatic or necessary application.
However the reasons for this procedure undoubtedly lie in the fact that in many possession actions there is no substantial defence. But in any possession action which relates to a dwelling-house, the...
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