Moyse & Anor v Regal Mortgages Ltd

LORD JUSTICE BROOKE: This application raises points of general interest and this judgment is therefore released from the usual restriction on the citation of judgments of this kind.

The underlying dispute, which is the subject of this action, is a claim by Regal Mortgages Limited against Mr and Mrs Moyse for possession of their home in Somerset. They originally obtained a mortgage from the Guardian Assurance Plc which was backed by an endowment policy. To cut a long story short, the Guardian Assurance in due course sold to Regal Mortgages the benefit of the mortgage over the house. Regal Mortgages seek possession because nothing has been paid under the mortgage for 10 years. The arrears under the mortgage were in excess of £200,000. In due course District Judge White of the Taunton County Court declined to stay the enforcement of an order for possession because there was no prospect that he could see of Mr and Mrs Moyse paying the current sums due under the mortgage as and when they fell due.

In due course Mr and Mrs Moyse applied for permission to appeal to Judge Cotterill after District Judge White had refused permission to appeal. After refusing permission to appeal on paper in March 2004, Judge Cotterill refused permission to appeal in June. That would normally be the end of the matter.

Section 54(4) of the Access to Justice Act 1999 provides that there would be no further appeal to this court following Judge Cotterill's order which was made on 21 May 2004 and drawn up on 10 June 2004. That is a simple statement of the position but the story is much more complicated.

Mr and Mrs Moyse have an ongoing dispute in relation to their dealings with a Mr Verstage in 1991. Mr Verstage came to them as an authorised representative for GRE Personal Financial Management Limited, which is a company in the same group as Guardian Assurance. Mr and Mrs Moyse maintained that an oral agreement was reached by which they accepted a loan offered to them by a German bank for a sum in excess of £7 million. This loan was to enable a limited liability company, of which they were the sole directors, to develop a piece of land for which they had planning permission.

In due course it became clear that there was no German bank who was interested in making them the loan, and Mr and Mrs Moyse consider that they suffered very substantial financial detriment from this episode because they had turned down other acceptable offers of finance because Mr Verstage was so confident that the money would be forthcoming. When District Judge White recited this history, he said it was surprising that a binding agreement should have been made in relation to a transaction on this scale which was entirely oral. But in a witness statement Mr Verstage had made he purported to suggest that an oral agreement had been made.

Mr and Mrs Moyse say that it was as a result of this financial disaster that they were unable to pay the mortgage and that they ought to be able to resist the claim for possession in the current proceedings because they are entitled to a very large sum of money which would enable them to bring the mortgage arrears up to date and keep the mortgagees at bay. They rely in this respect on an agreement made on 28 February 1991 between various members of the Guardian Royal Exchange Group and Mr Verstage under which these other members of the group, including Guardian Assurance, appointed Mr Verstage as their representative for the purposes of section 44(2) of the Financial Services Act 1986. As a result of this, they maintain that Mr Verstage is to be treated as the agent of Guardian Assurance as well as the other GRE company in relation to his activities.

It appears that serious complaints were made in relation to Mr Verstage's activities. Mr Moyse has told me that in 1994 the SIB, which was the lineal predecessor of the Financial Services Authority, sent two representatives to see him in Taunton. The interview is tape recorded and those representatives admitted to him that Mr Verstage did not give best advice within the meaning of the relevant legislation.

That was 10 years ago. In the course of the last 10 years Mr Moyse has endeavoured to get the Financial Services Authority and the police interested in his plight. He tells me that he has drawn the attention of Parliamentary committees to the difficulties in which he found himself as a result of Mr Verstage's activities.

The district judge recorded in his judgment that the defendants did not say that Regal Mortgages, the assignees of the benefit of the mortgage, had at any stage been at fault. Their complaint was that they bought the mortgage book from Guardian Assurance with knowledge of the present dispute and that it was not open to Guardian Assurance simply to divest themselves of this asset leaving themselves with a potential liability to compensate Mr and Mrs Moyse for this alleged breach of contract.

In 1997 Mr and Mrs Moyse started proceedings against various companies, including Guardian Assurance and GRE Financial Management. Because of inaction in the progress of those proceedings, in due course they were stayed by the automatic provisions of CPR Part 51. Eventually Mr and Mrs Moyse sought to have those proceedings resuscitated, but last autumn the High Court Master refused to remove the stay six years after the proceedings had been started. Mr Moyse told me today that a High Court judge refused permission to appeal. That was the end of those proceedings.

District Judge White also recorded in his judgment that the complaints that Mrs and Mrs Moyse had made to various regulatory authorities all seemed to have come to nothing. They appeared to have exhausted their remedies of complaint.

These proceedings were started against the background that no money had been paid under the mortgage for 10 years. An application for judgment was made to District Judge White on 30 December 2003 on the preliminary hearing which is customary in possession claims and is designed to see whether there is any arguable defence which should be allowed to go to a full hearing.

In November 2003 Mr Moyse had made an application of some kind to the Taunton County Court. I say it was an application for of "some kind" because he failed to keep a copy of it. I have been told that the Application Notice has been mislaid by the court authorities in the subsequent course of the proceedings. However, there is a contemporary letter by Mr Moyse in November 2003 in which he says that he was seeking an adjournment from the original time fixed on five separate grounds, one of which was that he was due to undergo surgery shortly before the date of the hearing and another that he was seeking a date when a period of a minimum of half a day to one day could be allocated. He also said that he was seeking an adjournment of the hearing on three other grounds. One was that he sought an order against the Financial Services Authority to release evidence in relation to these proceedings. He also sought an order against the claimant and against Guardian Assurance to release evidence in relation to these proceedings. Understandably the court accommodated the application for an adjournment, and the hearing took place before District Judge White on 30 December 2003. Mr Moyse complains that the county court was under a legal duty to give him advice as to how to prepare his case as a litigant in person. The county court was under no such duty, although it is well-known that the staff, although not legally qualified, do their best to help litigants in person from time to time.

I have before me a transcript of the hearing before District Judge White on 30 December 2003 and of his judgment. District Judge White said at the end of his judgment:

CPR 20.7(4) provides that particulars of a Part 20 claim must be contained in or served with the Part 20 claim. Mr Moyse has shown me a very detailed Particulars of Claim, which were apparently sent to the Taunton County Court about 14 days after District Judge White's order. He has not shown me the covering letter which he says preceded this notice and it is completely unclear whether the Taunton County Court ever received it. It certainly does not seem to have received it with a formal application. Mr Moyse told me that after the Taunton County Court had not done anything with the draft particulars for four months he then followed District Judge White's suggestion, and in May 2004 he issued separate High Court proceedings against a number of regulatory bodies.

In his judgment, the district judge carefully considered whether there were any grounds on which he could either refuse an order for possession or stay the execution of a warrant of possession because of this separate dispute. Mr Moyse is confident that the Financial Services Authority has in its possession an important document containing admissions by Guardian Assurance and that if this document could compulsorily be brought to light this would greatly help him and his wife succeed in proceedings against someone. It is not clear to me whether the proceedings against Guardian Assurance would be irretrievably statute barred in the light of the long passage of time since 1991 and the stay of the action brought in 1997. Mr Moyse feels that on any showing he would have an action against the Financial Services Authority. He has produced authority to show the nature of the course of action he might have. Although any failure of the Financial Services Authority appears to have been a long time ago, Mr Moyse is similarly confident that the relationship continued until quite recently and that there would be no problems with the statute of limitation.

At the centre of the issue District Judge White had to decide was whether in these circumstances there were any grounds for suspending the execution of a warrant for possession when there were over £200,000 of mortgage arrears owing and Mr and Mrs Moyse could show no prospect even of paying the current instalments. He concluded that there was not. He gave a number of reasons in his careful judgment. Towards the end of his judgment (in paragraph 19) he said:

On 23 April 2004 Judge Cotterill made a further direction of the court's own motion (after Mr Moyse had asked for his decision to be re-considered in court) to the effect that the oral hearing should take place on 21 May 2004, that the execution of the warrant for possession should be stayed pending the outcome of this hearing, and that the defendant lodge his notice of appeal by 30 April 2004.

On 21 May 2004, when Judge Cotterill heard the appeal, a solicitor appeared for the claimant. I have not been provided with a copy of Judge Cotterill's judgment, apparently because Judge Cotterill refused to sanction the preparation of a transcript at public expense. No doubt he knew that this was the end of the road so far as the possession action was concerned. The order was drawn up on 10 June 2004 and recites:

Without having a transcript of the judgment, I cannot be entirely sure what Judge Cotterill said about permission to appeal. He would have known that no appeal would lie from his order refusing permission to appeal. He certainly had no power either to grant or refuse permission to appeal to the Court of Appeal. There was simply no right of access sanctioned by Parliament to this court.

Similarly, there was no need for whoever drafted his order to include the words "The stay of warrant for possession ordered on 23 April 2004 is removed". It was a stay pending the outcome of the hearing. Once the hearing had taken place and the judge had dismissed the application for permission to appeal, the stay fell away.

There has been no authority of this court in relation to this particular situation. In Foenander v Bond Lewis & Co [2001] EWCA Civ 779, [2002] 1 WLR 525, I explained the principles on which there might be some orders made by lower appeal courts which might give rise to an appeal. Robert Walker LJ touched on the same topic more briefly in Riniker v University College of London [2001] 1 WLR 13. In these cases examples have been found of this kind of order, such as a decision to adjourn or not to adjourn a hearing of an appeal, a decision to extend time for a step in the appeal, or a decision to order the payment of costs in the appeal. Judge Cotterill's order in relation to the stay of the warrant of possession pending the hearing on 21 May 2004, fell into a quite different category. Strictly speaking it was not necessary for his order to refer to the stay falling away. It was ancillary to the application for permission to appeal and was intended to ensure that proceedings were taken to enforce the district judge's order pending the hearing of the application for permission to appeal. It had no other effect. It would be quite absurd for there to be a right of appeal against the so called removal of a stay when permission to appeal was refused in court and there was no further right of appeal against the possession order. I have not seen a transcript of the judgment of Judge Cotterill or the discussion following it, so it is not entirely clear how the order came to be drawn up in that way.

Mr Moyse is not willing to take no for an answer. He feels very strongly. The strength of his feeling was made clear in his very measured and courteous submissions to this court today that he and his wife have suffered a substantial injustice at the hands of Mr Verstage. He feels that a court of justice ought to be able to help them. He initially sought to appeal Judge Cotterill's order to this court but this court made it clear that it had no jurisdiction. In the absence of any clear authority, it seems to have been suggested that if there was any appeal court to which the Judge Cotterill's order relating to the removal of the stay could be appealed, it must be the High Court.

In due course a hearing took place before Grigson J when he was on circuit at Bristol on 22 June 2004. In the meantime Mr Moyse had issued his High Court proceedings against the Financial Services Authority, and I believe 13 other regulators, on 19 May. Because most of the defendants were in London, on 27 May 2004 District Judge Singleton transferred that action to the High Court in London.

I do not have a transcript of Grigson J's judgment on 22 June 2004. The order appears to have been drawn up in the wrong action, but I overlook that. It says:

As a matter of law, Grigson J had no power to do anything at all in relation to any appeal against Judge Cotterill's order for the reasons I have explained. He certainly had no power to direct the transfer of an application for permission to appeal to the Court of Appeal. There was no appeal, as such, in being. In Re Claims Direct Test Cases [2002] EWCA Civ 428 the Master of the Rolls made it clear that no such power existed. It is possible that Grigson J thought that there should be a ruling by the Court of Appeal under that jurisdiction to entertain an appeal against that part of Judge Cotterill's order which related to the stay. For the reasons I have given, he had no jurisdiction to make such an order.

History does not record whether this order transferring the appeal to the Court of Appeal in London ever reached the Court of Appeal. No doubt, if it ever did, the Court of Appeal authorities would have refused it because paragraph 1 of Grigson J's order was plainly a nullity. The High Court in London directed a hearing before Cooke J on 5 August 2004. I have a note of his judgment. He refers to the convoluted history of these proceedings and he summarises what I have set out in this judgment. After referring to Grigson J's order he said:

Cooke J's order and conclusions were plainly and incontrovertibly correct. Grigson J had no jurisdiction to make the order and Cooke J was wholly justified in making an order to the effect that Grigson J's order was, for all practical purposes, a dead letter. I see no value in a philosophical discussion without the benefit of legally qualified advocates on either side as to whether this court strictly had jurisdiction to entertain an appeal from Cooke J's order in these most unusual circumstances. Given that he was correctly saying that everything which could happen in the High Court at Bristol was a nullity, it might be said that that simply restored the position to where it was in Judge Cotterill's time. No appeal lay to any appeal court against Judge Cotterill's order for the reasons I have given.

However that may be, I am wholly satisfied that there is not the slightest prospect of success on any application for permission to appeal against Cooke J's order. For those reasons, there is no possible ground on which I could stay the execution of the warrant for possession which, I understand, is due to be executed tomorrow.

If, as he strongly maintains, Mr Moyse does have a money claim against some party or other which is not irretrievably statute barred after all this passage of time, then he and his wife must content themselves with the products of success of that money claim. There is no way in which this court can re-open the issues which have been determined by District Judge White and Judge Cotterill as to the appropriateness of staying the execution of the possession order pending this other financial claim. They may have been right; they may have been wrong; they may have been in error in some way or other. As I do not have a copy of the transcript of Judge Cotterill's judgment, I do not know what he said. Parliament has made it absolutely clear by section 54(4) of the Access to Justice Act 1999 that if an appeal court refuses permission to appeal to itself, on the grounds that there is no real prospect of success on the appeal and there is no compelling reason why it should hear the appeal, that is the end of the day. It is Parliament's wish and intention that resources should not be devoted to continuing appeals at higher levels if an appeal fails to cross the threshold test of permission to appeal.

For all these reasons this application is refused.