Victus Estates (2) Ltd v Shawbrook Bank Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morgan,Sir Paul Morgan |
| Judgment Date | 11 January 2022 |
| Neutral Citation | [2022] EWHC 34 (Ch) |
| Docket Number | Case Nos: CH-2020-000100 |
| Court | Chancery Division |
[2022] EWHC 34 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY DIVISION
CHANCERY APPEALS
Rolls Building, Royal Courts of Justice
Fetter Lane, London, EC4A 1NL
Sir Paul Morgan
Case Nos: CH-2020-000100
CH-2020-000101
and
and
Ms Josephine Hayes (instructed by Lightfoots LLP) for Shawbrook Bank Ltd
Ms Josephine Hayes (instructed by Equivo Ltd) for OneSavings Bank plc
Mr Christopher Royle (instructed by Lupton Fawcett Solicitors) for Ms Munroe
Ms Amanda Eilledge (instructed on Direct Access) for Ms Benjamin
The other Respondents did not appear and were not represented
Following written submissions and counter-submissions
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 has been handed down by the judge remotely by circulation to the parties' representatives by email and release to Bailii. The date for hand-down is deemed to be 11 January 2022.
Introduction
This judgment deals with issues as to costs following the judgment which I handed down in these two appeals on 27 August 2021, the neutral citation of which is [2021] EWHC 2411 (Ch). There was an oral hearing in relation to certain consequential matters on 25 November 2021 and I gave an extempore judgment dealing with those matters. There was not sufficient time on 25 November 2021 to deal with the many issues arising as to costs and I was asked by the parties to deal with those issues on the basis of written submissions. I subsequently received written submissions and counter-submissions from counsel for Shawbrook and OneSavings (Ms Hayes), Ms Munroe (Mr Royle) and Ms Benjamin (Ms Eilledge).
I will proceed on the basis that anyone reading this present judgment will have available the earlier judgment of 27 August 2021. I will therefore not restate what I decided in that judgment save insofar as that is necessary to decide the issues which are now before me. I will again use the abbreviations and definitions used in the earlier judgment.
The issues as to costs concern the costs of the proceedings in the county court and the costs of the appeals. The parties have made very detailed submissions as to the way matters were dealt with in the county court proceedings and it is submitted that those matters are not only relevant to any decision I might make as to the costs in the county court but may also be relevant to what I ought to decide as to the costs of the appeals. For this reason, I will first set out the procedural history both in the county court and on appeal. I will then deal with the costs in the county court and then with the costs of the appeals.
The procedural history
There were three actions in the county court. Ms Benjamin and OneSavings were parties to one of those actions and Ms Munroe and Shawbrook were parties to the other two actions.
The first set of proceedings were brought by Ms Benjamin. On 5 September 2014, she brought proceedings against OneSavings as a Second Defendant. I have not been shown the original Particulars of Claim but I have the version of that pleading which was amended in November 2019. Ms Benjamin pleaded at the outset that she had at least a 75% interest in the relevant property. Her case was that the TR1 in her case did not affect the legal estate or her beneficial interest in the property.
On 9 July 2015, OneSavings served a Defence and Counterclaim in the Benjamin proceedings. OneSavings claimed to be subrogated to an earlier mortgage of the property which had been redeemed with OneSavings' money. It further pleaded that if certain matters were decided in Ms Benjamin's favour, then nonetheless, the TR1 had the effect of transferring Mr Charles' beneficial interest in the property to the relevant Victus company which had then charged that beneficial interest to OneSavings.
On 21 August 2015, Ms Benjamin's Reply and Defence to Counterclaim denied OneSavings' claim to be subrogated to the earlier mortgage. It also pleaded that if (which was denied) Mr Charles had a beneficial interest in the property and if (which was not admitted) Mr Charles had sold that beneficial interest to the Victus company, then it was admitted that OneSavings had an equitable charge over that interest.
There were two sets of proceedings to which Ms Munroe and Shawbrook were parties. The first set was issued by the relevant Victus company and Mr Agrawal and Ms Munroe was a Fourth Defendant in those proceedings. Ms Munroe served a Defence and Counterclaim. She claimed that Mr Charles had not had a beneficial interest in the relevant property and that she was the 100% beneficial owner of it. She contended that her signature on the TR1 was a forgery; she did not initially allege that the TR1 was a sham. Ms Munroe joined Shawbrook as a Third Party but I do not have a copy of the relevant pleading. On 19 August 2015, Shawbrook served a Defence and Counterclaim to Ms Munroe's Third Party Claim. In that pleading, Shawbrook pleaded that if certain matters were decided in Ms Munroe's favour, then nonetheless, the TR1 had the effect of transferring Mr Charles' beneficial interest in the property to the Victus company which had then charged that beneficial interest to Shawbrook. Shawbrook also claimed that it was subrogated to an earlier mortgage which had been redeemed with Shawbrook's money. On 18 September 2015, Ms Munroe served a Defence to Shawbrook's counterclaim and in relation to the allegation as to the effect of the TR1, Ms Munroe pleaded that the allegation were either matters of law or were not admitted. She did not admit Shawbrook's claim to be subrogated to the earlier mortgage.
The second set of proceedings which involved Ms Munroe were those brought against her by Shawbrook on 17 August 2018. In those proceedings, Shawbrook claimed to be subrogated to the earlier mortgage on the property. It also pleaded that if certain matters were decided in Ms Munroe's favour, then nonetheless, the TR1 had the effect of transferring Mr Charles' beneficial interest in the property to the relevant Victus company which had then charged that beneficial interest to Shawbrook. I do not have a copy of the original pleading which Ms Munroe served in response to this claim but I do have a copy of her Defence as amended in 2019. In the original pleading, she adopted her pleadings in the first set of proceedings to which she was a party. She claimed to be the sole beneficial owner of the property. She did not admit Shawbrook's claim to be subrogated to the earlier mortgage.
All these proceedings were due to be tried in June 2019. At that date, it had not been alleged by Ms Munroe or by Ms Benjamin that the TR1s were shams. However, the trial did not then proceed and the proceedings were adjourned.
In August 2019, Ms Munroe applied for permission to amend her Defence and Counterclaim in the first set of proceedings to which she was a party and also to amend her Defence in the second set of proceedings. On 8 October 2019, she obtained the permission to amend which she had sought. The court's order recorded that Ms Munroe agreed to treating Shawbrook's pleadings as not admitting and requiring her to prove the facts newly alleged in her amended pleadings without any formal amendment of the same.
Ms Munroe then Re-Re-Amended her Defence and Counterclaim in the first proceedings to which she was a party and Amended her Defence in the second set of proceedings. She did not amend her pleading in response to Shawbrook's Counterclaim in the first set of proceedings. In her Re-Re-Amended Defence and Counterclaim she pleaded that the TR1 in relation to the property was a sham and passed no interest in that property to the relevant Victus company. She pleaded a detailed case to the effect that the arrangement between Mr Charles and Mr Agrawal was a plan to defraud her and prospective mortgagees and that Mr Agrawal was a knowing party to that arrangement.
On 28 November 2019, Ms Benjamin was given permission to re-re-amend her claim by serving Re-Re-Amended Particulars of Claim which raised an allegation of sham. OneSavings did not object to the proposed amendment. The court's order of 28 November 2019 recorded that the Defence and Counterclaim of the relevant Victus company was to be read as denying that the purchase of the property was a sham and requiring Ms Benjamin to prove the facts alleged as to sham without there being a formal amendment of the Victus company's own pleading. The order recorded a similar agreement as regards there being no need to amend OneSavings' Defence and Counterclaim.
Ms Benjamin's Re-Re-Amended Particulars of Claim pleaded that the purported sale of the property was a sham and no interest in the property passed to the Victus company. It pleaded that Mr Agrawal knew that Ms Benjamin was the joint registered proprietor of the property. It then pleaded that Ms Benjamin would rely on the matters set out by Ms Munroe in paragraphs 17A to 17E of her Re-Re-Amended Defence and Counterclaim (which raised the allegation of sham and of Mr Agrawal's knowing participation in the fraud). Finally, it was averred that the TR1 was wholly void and of no effect.
The result of the above was that Ms Munroe and Ms Benjamin alleged in their pleadings in October and November 2019 that the TR1s...
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