Yorkshire Bank Plc v Hall

JurisdictionEngland & Wales
Judgment Date18 December 1999
Date18 December 1999
CourtCourt of Appeal (Civil Division)
[COURT OF APPEAL] YORKSHIRE BANK PLC. v. HALL and Others SAME v. SAME HALL and Others v. YORKSHIRE BANK PLC. 1998 Dec. 10, 11; 18 Mantell and Robert Walker L.JJ. and Kay J.

County Court - High Court - Proceedings transferred to - Action for possession of dwelling house outside Greater London - Transfer to High Court and consolidation with money actions - Whether High Court having power to make order for possession - Whether leave required to appeal from order in money actions - County Courts Act 1984 (c. 28), ss. 21, 42(7)(b) (as substituted by Courts and Legal Services Act 1990 (c. 41), s. 2(3)) - R.S.C., Ord. 59, r. 1B(1)(d) - Court of Appeal (Civil Division) - Appeal - Leave to appeal - Whether court limited by terms on which leave granted - Practice - Pleadings - Striking out - Abuse of process - Defendants bringing separate proceedings against plaintiff based on same facts as plaintiff's case against them - Defendants' case amounting to cross-claim rather than defence - Whether to be struck out as abuse of process

Several members of a family carried on business in partnership as property dealers and licensed deposit-takers. Because of changes in banking regulations, they incorporated a company in 1985 with all its issued share capital owned by them. In 1986 the company was registered as a public limited company to which the partners transferred the partnership business in consideration of the issue and allotment of ordinary shares. That transaction was later held to have infringed section 103 of the Companies Act 1985. In compliance with Bank of England requirements each of four family members purchased further ordinary shares by means of loans secured over the homes of two of them and guaranteed by the others. The loan facility letter stated that the company would bear the commitment fees and other charges of the transaction. After the company had been trading for about a year the Bank of England became concerned about its management, and a new managing director was appointed. In August 1988 the company informed the lender that it would no longer meet the interest on the borrowings. In April 1989 the lender refused to intervene despite a request by the family directors, and they resigned. In October 1989, following an unsuccessful demand for repayment of the loans, the lender began proceedings in the Queen's Bench Division of the High Court and possession proceedings in the county court, which had exclusive jurisdiction under section 21 of the County Courts Act 1984.F1 Both sets of proceedings were transferred to the Chancery Division, where they were consolidated and ordered to be carried on as one action. After the company went into creditors' voluntary liquidation in 1991, the liquidator discovered that it had paid interest on the borrowings until mid-1988, and he issued proceedings against the lender for repayment. The lender refunded the interest to the liquidator and sought to recover it from the borrowers as part of its consolidated action. Before that action came to trial, the borrowers began proceedings against the lender in the Chancery Division seeking damages for loss caused by the lender's alleged negligence and for breach of contract or breach of statutory duty in having failed to safeguard the value of shares placed with it to secure their borrowings. In November 1995 the lender obtained money judgments and possession orders in the consolidated action. Despite the provisions of R.S.C., Ord. 59, r. 1B(1)(d),F2 both the judge and the borrowers' counsel mistakenly considered that leave to appeal was not required. In July 1996 a district judge struck out the borrowers' action against the lender as disclosing no reasonable cause of action or alternatively as an abuse of process. On 16 January 1997 Jonathan Parker J. dismissed both the borrowers' application to have the judgments in the consolidated action set aside and their appeal against the striking out of their action against the lender. The Court of Appeal subsequently gave the borrowers leave to appeal against that part of the November 1995 judgment which related to interest actually paid by the company on the basis that they had a defence of payment, and against the decisions of Jonathan Parker J.

On the borrowers' appeals and their application to widen their leave to appeal against the decision of November 1995: —

Held, (1) that the words “any other enactment” in section 42(7)(b) of the County Courts Act 1984, as substituted, included the Act of 1984 itself, so that the section did not operate to allow the transfer to the High Court of proceedings where the county court had exclusive jurisdiction; that therefore there had been no power to transfer the possession proceedings to the High Court; that, since jurisdiction could not be conferred by estoppel or by consent, the judge could only properly have made the possession orders by deconsolidating the proceedings, transferring the possession actions back to the county court and making the orders as if he were sitting in the county court; that, in that event, the borrowers would not have been required by R.S.C., Ord. 59, r. 1B(1)(d) to obtain leave to appeal against the money judgments; but that justice required that they should not, by the error as to jurisdiction, be shut out of an appeal which they would otherwise have been entitled to make as of right; and that, once an appeal reached the stage of hearing, the power of the Court of Appeal to permit new points to be taken, although it should be exercised sparingly, could not be rigidly limited by the terms in which leave had been granted (post, pp. 1724C–H, 1725E–H).

John Redman Ltd. v. Filecroft Ltd. [1991] 1 W.L.R. 692, C.A. and Daisystar Ltd. v. Town & Country Building Society [1992] 1 W.L.R. 390, C.A. distinguished.

(2) That the Court of Appeal had been right to refuse to grant leave for an appeal on wider grounds, since where an agreement could be carried out both lawfully and unlawfully, it was to be presumed that the parties intended to carry the agreement out lawfully; that, in any event, it was clear from the documentary evidence and the primary facts as found by the judge that the company had not actually made itself liable to the lender for interest on the borrowed money; and that, accordingly, the appeal from the money judgments would be allowed only so far as it related to interest actually paid by the company (post, p. 1726A–G).

Dicta of Lord Oliver of Aylmerton in Brady v. Brady [1989] A.C. 755, 783, H.L.(E.) applied.

(3) That in relation to its operation of the company's account, the lender owed no duty to the family members either as shareholders or as mortgagors, its only relevant duty being to the company as its customer, since it had no security over the assets of the company and no voting rights as holder of ordinary shares and, in the absence of bad faith, had no duty to intervene in the company in the hope of preserving the value of its security; but that, although the borrowers' misconceived claims against the lender arose from the same sequence of events as the lender's claim against them, they were cross-claims rather than defences and, while they might have failed on the basis that the borrowers had been too slow to seek equitable relief, they ought not to have been struck out on the alternative ground that they constituted an abuse of process, since that ground only applied where a party had failed to deploy his full case at an earlier stage; and that, accordingly, the appeals from Jonathan Parker J. would be dismissed (post, pp. 1728H–1729D, 1729E–G, 1730B–G).

Henderson v. Henderson (1843) 3 Hare 100 distinguished.

Decision of Judge Maddocks sitting as a judge of the Chancery Division reversed in part.

Decision of Jonathan Parker J. sitting as Vice-Chancellor of the County Palatine of Lancaster affirmed.

The following cases are referred to in the judgment of Robert Walker L.J.:

AIB Finance Ltd. v. Debtors [1997] 4 All E.R. 677; [1998] 2 All E.R. 929, C.A.

Ainsbury v. Millington (Note) [1987] 1 W.L.R. 379; [1987] 1 All E.R. 929, H.L.(E.)

Arnold v. National Westminster Bank Plc. [1991] 2 A.C. 93; [1991] 2 W.L.R. 1177; [1991] 3 All E.R. 41, H.L.(E.)

Ashley Guarantee Plc. v. Zacaria [1993] 1 W.L.R. 62; [1993] 1 All E.R. 254, C.A.

Bradford Investments Ltd., In re [1991] B.C.L.C. 224

Bradford Investments Ltd. (No. 2), In re [1991] B.C.L.C. 688

Brady v. Brady [1989] A.C. 755; [1988] 2 W.L.R. 1308; [1988] 2 All E.R. 617, H.L.(E.)

Brisbane City Council v. Attorney-General for Queensland [1979] A.C. 411; [1978] 3 W.L.R. 299; [1978] 3 All E.R. 30, P.C.

China and South Sea Bank Ltd. v. Tan Soon Gin (alias George Tan) [1990] 1 A.C. 536; [1990] 2 W.L.R. 56; [1989] 3 All E.R. 839, P.C.

Daisystar Ltd. v. Town & Country Building Society [1992] 1 W.L.R. 390; [1992] 2 All E.R. 321, C.A.

Downsview Nominees Ltd. v. First City Corporation Ltd. [1993] A.C. 295; [1993] 2 W.L.R. 86; [1993] 3 All E.R. 626, P.C.

Gaskell v. Gosling [1896] 1 Q.B. 669, C.A.

Greenalls Management Ltd. v. Canavan, The Times, 19 May 1997; Court of Appeal (Civil Division) Transcript No. 669 of 1997, C.A.

Henderson v. Henderson (1843) 3 Hare 100

Johnson v. Gore Wood & Co. (unreported), 12 November 1998; Court of Appeal (Civil Division) Transcript No. 1711 of 1998, C.A.

National Bank of Greece S.A. v. Pinios Shipping Co. No. 1 [1990] 1 A.C. 637; [1989] 3 W.L.R. 1330; [1990] 1 All E.R. 78, H.L.(E.)

National Home Loans Corporation v. Yaxley (unreported), 13 December 1996, Rattee J.

Palk v. Mortgage Services Funding Plc. [1993] Ch. 330; [1993] 2 W.L.R. 415; [1993] 2 All E.R. 481, C.A.

Practice Direction (Court of Appeal: Leave to Appeal and Skeleton Arguments) [1999] 1 W.L.R. 2; [1999] 1 All E.R. 186, C.A.

Prudential Assurance Co. Ltd. v. Newman Industries Ltd. (No. 2) [1982] Ch. 204; [1982] 2 W.L.R. 31; [1982] 1 All E.R. 354, C.A.

Redman (John) Ltd. v. Filecroft Ltd. [1991] 1 W.L.R. 692; [1991] 3 All E.R. 449, C.A.

Sowman v. David Samuel Trust Ltd....

To continue reading

Request your trial
48 cases
  • The Mortgage Business Plc v Lars Green and Another
    • United Kingdom
    • Chancery Division
    • 27 Junio 2013
    ...has now proceeded in the high court. Counsel are agreed, and I also agree, that following the decision of the Court of Appeal in Yorkshire Bank plc v Hall [1999] 1 WLR 173 as to the effect of section 21(3) and sections 41 and 44 of the County Courts Act 1984, the right thing for me to do is......
  • Bula Ltd ((in Receivership)) and an application pursuant to s. 316 of the Companies Act 1963 to 1990
    • Ireland
    • High Court
    • Invalid date
  • Bula Ltd ((in Liquidation))
    • Ireland
    • High Court
    • 20 Junio 2002
    ...& MOSS THE LAW OF RECEIVERS & ADMINISTRATORS OF COMPANIES 2000 7–005 DOWNSVIEW NOMINEES V FIRST CITY 1993 AC 295 YORKSHIRE BANK V HULL 1999 1 WLR 1713 MEDFORTH V BLAKE 2000 CH 86 HOLOHAN V FRIENDS PROVIDENT & CENTURY LIFE OFFICE 1966 IR 1 STANDARD CHARTERED BANK LTD V WALKER 1982 3 AER ......
  • Corbett and another v Halifax Building Society and Others
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 18 Diciembre 2002
    ...in the event of a default by the borrower. The scope of the power was described (as the judge rightly said) by Robert Walker LJ in Yorkshire Bank v Hall [1999] 1 WLR 1713 at page 1728: '…the bank relied on principles stated by the Privy Council in the well known cases of China and South Sea......
  • Request a trial to view additional results
3 books & journal articles
  • Table of Cases
    • United Kingdom
    • Wildy Simmonds & Hill Law of Insolvent Partnerships and Limited Liability Partnerships Contents
    • 29 Agosto 2015
    ...Semiconductors Ltd [2014] EWHC 3190 (QB) 130 York Tramways Company Limited v Willows (1882) 8 QBD 685 417 Yorkshire Bank plc v Hall [1999] 1 WLR 1713 237 Young (M) Legal Associates Ltd v Zahid (A Firm) and Others [2006] EWCA Civ 613, [2006] 1 WLR 2562 14 Yourell v Hibernian Bank Ltd [1918] ......
  • Receivership
    • United Kingdom
    • Wildy Simmonds & Hill Law of Insolvent Partnerships and Limited Liability Partnerships Contents
    • 29 Agosto 2015
    ...of sale; 259  inserting a misstatement in auction particulars; 260 257 Medforth v Blake [2000] Ch 86. 258 Yorkshire Bank plc v Hall [1999] 1 WLR 1713; Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949; and Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295. 259 Tse Kw......
  • DUTIES OF A MORTGAGEE AND A RECEIVER: WHERE SINGAPORE SHOULD AND SHOULD NOT FOLLOW ENGLISH LAW
    • Singapore
    • Singapore Academy of Law Journal No. 2008, December 2008
    • 1 Diciembre 2008
    ...Ch 86 (CA) at 99 (“particularly onerous duties constructed by courts of equity for mortgagees in possession”); Yorkshire Bank plc v Hall[1999] 1 WLR 1713 (CA) at 1727 (“onerous obligations of a mortgagee in possession”), 1729 (mortgagee in possession is “liable to account on a strict basis”......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT