Halifax Plc v Okin

There are before the court this afternoon two applications by Miss Okin, the appellant, for permission to rely on further evidence in support of her appeal, for which she has permission granted by Moore-Bick LJ, against an order of HHJ Barnet QC sitting in the Basildon County Court on 15 August 2006. That order itself was on appeal from an order of District Judge Collier of the previous day, refusing to stay execution of a warrant of possession. Miss Okin has not attended today. Enquiries made by the respondent’s solicitors yesterday at the only contact number that they had for her, as I understand it her work telephone number, showed (I am told by the respondent’s counsel) that she was away from work ill yesterday. On her not attending at 2.00pm today when the case was listed, the associate attempted to contact her on the same phone number and was told by a colleague that she was away ill today. She has therefore not attended to support her applications or her appeal.

In those circumstances, I would myself dismiss both the applications and the appeal but in so doing -- in case she were to apply, as she would be able to, to have the order made in her absence set aside, in case it may be of assistance either to a court which has to consider that, or to her in considering whether she should do so -- I propose to say something about the history and merits of the case.

The proceedings arise from a mortgage which I think was dated 29 August 2003 and appears to have been registered with the Land Registry on 15 October 2003, originally to secure a loan of £44,995 by Halifax, the respondent, to Miss Okin. This was all but £5,000 of the cost to her of acquiring the mortgaged property, which is the third floor flat at 85 Stanford House, Princess Margaret Road, East Tilbury. At that stage, the monthly instalments due under the mortgage, or at any rate the instalment due during 2004, was just over £260. Miss Okin fell into arrears in the first half of 2004 and a claim for possession was issued on 21 July 2004. By that stage the arrears were relatively modest; they were £792.50. But they continued to mount and from the witness statements put in, in the course of the proceedings during 2005, one can see them mounting towards £3,000. By 21 March 2006, which was very shortly before the hearing of the mortgagee’s application for possession, they stood at just over £3,500. A possession order was made on 31 March 2006, by which time the total debt was £47,184 and some pence. The possession order was suspended on payment of the current instalments plus £30 a month off the arrears.

Only one payment was made in the months following that order, a payment of £250 in May 2006. In July, Halifax applied for a warrant for possession at a time when the arrears appeared to have been £4,374. Miss Okin’s response to that was an application to stay execution of the warrant issued on 9 August. She said, in support of that application, that she had been ill for most of July in hospital. She was currently unemployed, she was waiting for the start of a permanent job for which she had been interviewed and was looking for temporary work in the meantime. She sought, in effect, to rely on section 36 of the Administration of Justice Act 1970, which gives the court extensive discretionary powers to adjourn the proceedings or to stay or suspend execution of an order if it appears to the court that in the event of its exercising the power the mortgagor is likely to be able, within a reasonable period, to pay any sums due under the mortgage.

District Judge Collier considered her application on 14 August and dismissed it. She immediately appealed to the circuit judge on the basis that the district judge had not paid any attention to what she had to say and she needed some time to arrange finance, in order to put the mortgage account onto a proper footing. The circuit judge dismissed the appeal, concluding that there was no prospect that she would be able to pay the amounts due. He recorded with sympathy that she had been ill, but that she had been in good health between January and April. During that time she was not employed, apparently, and that is why she paid nothing during that period. He recognised that she had a prospect of getting a permanent job, but there was no indication of when it was going to start -- in fact it did not start until December.

The judge said that her record of payment was effectively three payments when there should have been twelve, and he said that the record of past payment is as good a basis as any for assessing the ability to make future payments. His judgment is criticised on the basis that there had actually been four payments rather than only three, but that is not a very substantial difference considering that there have been so many payments passed and not met.

Following that, Miss Okin immediately applied to this court for permission to appeal. It first came before Jonathan Parker LJ on 16 August, who had been given no indication of the basis of the judge’s judgment and what he did, despite saying that there appeared to be no good grounds for a second appeal, was to adjourn the application into court on notice and to stay execution of the order in the meantime. The appellant at that stage put in a first application to rely on further evidence which was a letter bringing up to date her employment and financial position and showing that she had indeed made four rather than only three payments towards the mortgage in recent times.

The application for permission to appeal came before Moore-Bick LJ in December in circumstances in which, for reasons that are not entirely clear, Miss Okin did not attend. In fact she failed to attend two hearings before Moore-Bick LJ, one on about 7 December when he adjourned it for a week and the second a week later. But she had by then sent the court a letter saying that she had obtained a job and had started working on 5 December and she enclosed a copy of her letter from the Home Office, the employer, offering her the job. That is the subject of her second application for permission to rely on fresh evidence.

Moore-Bick LJ concluded that he should grant permission to appeal, which is why the matter comes before us as a substantive appeal together with the applications to adduce further evidence. We take it that Miss Okin still is in employment, although away from her job today and yesterday on the grounds of illness.

We do, however, have some further evidence from the respondent as to what the position has been. The indication was on the part of the appellant that she would pay the monthly instalments plus £80 a month towards the arrears -- that is what she said she would be able to do. The original possession order spoke only of £30 a month towards the arrears, but the arrears were considerably less at that time and at all events she was suggesting that she could pay the current instalments plus £80. At the end of last year, the mortgage instalments stood at £406 per month, so she would have had to pay £486 a month. At the beginning of February the mortgage instalments went up to £422, so that from February onwards she would have to pay just over £500 a month. She did pay £500 in January in two instalments. In February she paid £480; in March she paid £430; in April she paid nothing and we are told that earlier this month she paid £500. Disregarding that £500, but also disregarding the instalment that fell due in May, as at 1 May her arrears stood at £6,855, so they have mounted really quite considerably since the date of the possession order in March 2006 as a result of her extensive defaults.

If the matter stood simply on the basis of the material that was before the district judge and the circuit judge in August last year, one would have to say that they were plainly justified in refusing a stay of a possession. There was, so far as they could be shown, no likelihood that she could pay the arrears and instalments within a reasonable time.

So far as the further evidence is concerned, a point is made on behalf of the respondent that it is strictly irrelevant to the appeal but could be the basis of a new application in the county court. I daresay that is the correct way to proceed and of course it may be that it is still open to Miss Okin to meet any further attempt to enforce in that way. But since the matter was before this court, it seems to me that if one had been considering the appeal on its merits, it would be likely that one would wish to consider the fresh evidence as to Miss Okin’s financial position, both as regards what she says in terms of her employment and as regards what the respondent says in terms of her payment record. The fact is that, in terms of what she has been able to do since the beginning of this year, she has shown that, despite being in continuous employment, she has been unable to keep up even the current instalments, still less pay the additional sums towards arrears. I say she has been unable to keep up even the current instalments -- it may be that if you look at the amounts she has paid since January and ignore the arrears, they would have covered the instalments to date but they were all intended to include some contribution towards the arrears and there was no payment at all in April.

It does rather look as if this is a mortgage which, sadly, Miss Okin simply cannot afford to service. In those circumstances, if the matter had been proceeding on its merits, she would have had something of an uphill task. I know not, of course, what she would have said, but there would have been certain difficulties in her way before she could persuade me, at any rate, that she was likely within a reasonable time to be able to pay off the amounts secured by the mortgage, even if you take the relatively relaxed approach that was favoured by this court in Cheltenham and Gloucester Building Society v Norgan, under which the arrears can be spread over the remaining life of the mortgage. Simply taking her indication of the end of last year at face value, she has been unable to keep to it despite being in employment and in those circumstances it would be a difficult appeal to support.

But, as I say, that is really by way of indication and, I hope, assistance in case the matter has to be reconsidered. In the absence of the appellant and in the absence of her having contacted the court and asked for an adjournment on any basis at all, I would refuse both the applications which are before us for permission to rely on additional evidence and I would also dismiss the appeal.

I agree for the reasons given by my Lord, Lord Justice Lloyd. Accordingly, both the applications and the appeal stand dismissed.