Wallace & Anor v Crossley & Anor

This is an appeal against the order dated 29 September 2008 of Morgan J refusing the appellant’s application for a stay of the order of District Judge Mackenzie of 26 August 2008 for the sale of Kings End Cottage (“the property”) and ordering the appellants to pay the respondent’s costs, which were summarily assessed in the sum of £2,200. Kings End Cottage is owned by the appellants. Its sale was ordered to enforce a charging order which had been made on 25 May 2007. The charging order had been made because, as a result of being unsuccessful in defending litigation brought against them by the respondents, the appellants owed the respondents a considerable sum of money in damages and costs as a result of an order made by HHJ Geddes in June 2005.

At the outset of this judgment it is important to emphasise the limited scope of this appeal. It is not an appeal against the costs orders that were made in the litigation prior to the charging order, it is not an appeal against the charging order, nor is it an appeal against the order for possession and sale. The only question before the court on this appeal is whether Morgan J’s decision to refuse a stay was erroneous as a matter of law and/or in principle. I refer to an error of law or principle because, insofar as a decision to grant or refuse a stay of an order involves the exercise of a judicial discretion, this court would not interfere with the trial judge’s exercise of discretion unless it was satisfied that he had erred, either as a matter of law or in principle in some way.

When granting permission to appeal Arden LJ said this:

“The effect of the judge’s order was to prevent any effective hearing of the application to have the case re-transferred to London, which had been directed to be heard in the Royal Courts of Justice by the order dated 20 August 2009 of HHJ Cooke. This was a separate issue from the question whether there was any real prospect of success on appeal from the order of 26 August 2008.”

There have been numerous applications and appeals in these proceedings. The most relevant applications and appeals are set out in the judgment of Morgan J and it is unnecessary to rehearse them all in this judgment. Arden LJ dealt with the application for permission to appeal together with a number of other applications for permission to appeal on the papers. We have had an opportunity to consider the matter in greater depth with the assistance of the respondent’s skeleton argument.

As a first step, it is necessary to identify just what it was that HHJ Cooke had ordered to be heard in the Royal Courts of Justice to see whether that order did provide any reason for granting a stay of the order for sale.

In brief outline, what had happened was this. The respondents had applied in the Worcester District Registry for the order for sale. On 18 March 2008 the appellants applied for those proceedings to be transferred to the Royal Courts of Justice. On 4 April 2008 (the order is dated 10 April 2008) District Judge Mackenzie ordered that the case should be transferred to the Royal Courts of Justice. He did so not in response to the appellant’s application but of his own motion, because the amount in issue exceeded the £30,000 limit on the county court’s jurisdiction. Since the appellants had been asking for a transfer to the Royal Courts of Justice, it might have been thought that they would have been satisfied with that order, but on 4 April they appealed against it because they took issue not with the order itself but with some of the district judge’s express reasons for making it.

That appeal rapidly became academic because on 28 May Master Price exercised his powers under Section 40 of the County Courts Act to transfer the case back from the Royal Courts of Justice to the Worcester County Court.

On 10 June 2008 the appellants applied to set aside Master Price’s order. Just pausing there for a moment, the position was, therefore, that the appellants were on the one hand challenging District Judge McKenzie’s order transferring the case from Worcester to the Royal Courts of Justice, whilst on the other hand they were challenging Master Price’s order re-transferring the case from the Royal Courts of Justice to Worcester. Their application for permission to appeal against the order of 4 April 2008 was refused on the papers, the judge observing perhaps unsurprisingly that they had got essentially what they asked for.

Notwithstanding that, the application was renewed and HHJ Cooke’s order of 20 August 2008 (the reference to 2009 is clearly a typographical error), referred to by Arden LJ when granting permission to appeal, was made on the appellant’s oral renewal of their application for permission to appeal against the order of 4 April 2008. HHJ Cooke ordered that the hearing date of that application in Birmingham be vacated and that the matter be transferred to the Royal Courts of Justice. He also said:

“On hearing the application the court will also (if it has not already been determined) deal with the application dated 10 June 2008 to set aside the order of Master Price dated 2 June 2008.”

HHJ Cooke’s decision to order the hearing of the appellant’s application for permission to appeal against the order of 4 April 2008 in the Royal Courts of Justice as opposed to Birmingham could not on any conceivable basis have been a reason for granting a stay of the order for sale. Firstly, the order which the appellants were seeking permission to challenge had actually giving the appellants what they wanted, namely a transfer of the order for sale proceedings to the Royal Courts of Justice; and secondly, by the time the matter came before HHJ Cooke, and indeed before it came before Morgan J, the order of 4 April had been rendered academic because Master Price had ordered the proceedings to be retransferred back to the Worcester County Court.

On 29 September 2008, when the matter came before Morgan J, the appellants’ application to set aside Master Price’s order transferring the proceedings back to Worcester was still outstanding. A renewed application to set aside the order had been made and the hearing been adjourned to 7 November 2008. Morgan J was well aware that this application was outstanding, but he explained in paragraph 15 of his judgment why he did not attach great weight to it. He gave two reasons:

“First, after Master Price’s order of 28^th May 2008 two judges in the county court have determined that the case was appropriate for the county court. Secondly, the matter which is going to be heard in November 2008 is pursuant to an application made on 1^st November 2008 which was, as I have recited, after the order for sale and so the order for sale had been made by a court within its jurisdiction and should be challenged on an appeal and not by a hearing before the Master in the High Court”

The appellants say that the second reason was wrong: the application to set aside had been made earlier on 10 June prior to the order for sale. As I have said, Morgan J was well aware of the fact that the application had been made earlier because he referred to it in paragraph 14 of his judgment.

In any event, the first of his two reasons for not attaching much weight to the outstanding application in respect of Master Price’s order is a cogent one. Judges in the county court had indeed determined that the case was appropriate for the county court.

So far as Master Price’s decision is concerned, Morgan J’s reasoning has been reinforced because we now know that on 7 November 2008 Master Price refused to set aside his order made on 28 May 2008, so the position is that judges in both the Royal Courts of Justice and in the Worcester County Court have considered and reconsidered the question whether the proceedings should be transferred to Worcester and have concluded that they should. As I have said, there is no appeal on that issue before us.

Is there any other reason why it could be said that Morgan J had erred in refusing a stay? The appellants’ skeleton argument says that there are three principal grounds of appeal:

“firstly, that the leaned judge erred in law in refusing a stay given the overriding objective, the importance of the matter to the Appellants and their desire to have the case retransferred to an accessible legal forum near to their home in London; secondly, he erred in failing to address the issue of the Defendants’ Convention rights in his judgment although these rights formed a major part of their application for a stay; thirdly, he did not take into account that the Appellants are in their sixties, with modest incomes and ill health and had been unable to travel to Worcester County Court to represent their interests and defend the claim for medical reasons.”

It seems to me that the first and the third of those grounds are simply different ways of expressing the appellants’ challenge to Master Price’s decision to transfer the proceedings back from the Royal Courts of Justice to Worcester. That complaint was maintained in their oral submissions before this court, but as I have said it is not a matter that is under challenge in this appeal against Morgan J’s order.

So far as the appellants’ Convention rights are concerned it is clear that those judges who have dealt with the issue of transfer, whether in the Royal Courts of Justice or at Worcester or Birmingham, have not been persuaded that the appellants are unable either to represent themselves or to obtain representation in proceedings in Worcester. It is perfectly true that they live in London, but the property is located near Worcester and the conclusion that it was appropriate to have the hearing there is readily understandable. Whatever their personal state of health may or may not be, I for my part am not persuaded on the material before the court that the appellants are not able to secure legal representation for the purposes of a hearing or hearings in Worcester. Wherever the proceedings are conducted, whether in London or Worcester, the appellants have had ample opportunity had they so wished to put their case either in person or through representation including any Convention arguments when opposing the various orders that have been made and which are not under challenge in these proceedings.

I should mention that Articles 6 and 8 have been mentioned. I have dealt with Article 6. This matter has been considered on numerous occasions by the court in Worcester. There is no reason to believe that the appellants’ Article 6 rights have thereby been breached. So far as Article 8 is concerned, this property is not their only or even their principal home. As I have said, they live in London. It could not be said that there was any disproportionate interference with their Convention rights in any event.

Essentially the application for a stay before Morgan J was made on the basis that there was a jurisdictional bar to the matter being considered in the county court. It was said that District Judge Mackenzie had no jurisdiction to make the order for sale because the sums in question exceeded the £30,000 county court limit. Morgan J dealt with this issue in paragraphs 9 and 17 of his judgment. In paragraph 9 he said:

“…on 28^th May 2008 Master Price, exercising his powers under section 40 of the County Courts Act 1984, retransferred the matter to the county court. By 28^th May 2008 there had been decided the case of National Westminster Bank v King [2008] 2 W.L.R 1279 where David Richards J went into the question of jurisdiction of the county court, first, in a case where the proceedings originated in the county court and, secondly and by way of contrast, whether the proceedings begin in the High Court and are transferred to the county court. The learned judge analysed section 40 of the County Courts Act 1984 and he held that in a case which is started in the High Court but transferred to the county court the limit on jurisdiction in Section 23 of the County Courts Act 1984 simply does not apply. So when Master Price transferred the matter back to the Worcester County Court that meant that the Worcester County Court could, if it thought fit, make an order for sale even though the debt exceeded £30,000.”

In paragraph 17 he identified what he said was the main point of law in the grounds of appeal (he was shown a copy of the grounds) against the order of 26 August 2008. He said this:

“The main point of law in the grounds of appeal is an assertion that the county court did not have jurisdiction to order a sale on 26^th August 2008. That submission is contrary to what was decided in National Westminster Bank v King and, in my judgment, that ground of appeal has no prospect of succeeding.”

The appellants contend that there are factual distinctions between the National Westminster Bank case and the present case. Mrs Crossley pointed out that in that case it had been convenient from Mr King’s point of view that the case should proceed in the Portsmouth County Court. Indeed, because he was local to the Portsmouth County Court, Mr King, save for a telephone call, did not participate in the proceedings. However, those factual distinctions do not affect the issue of principle that was decided by David Richards J in the National Westminster Bank case. In paragraph 1 of his judgment he identified what that question of principle was:

“This application raises an issue of some practical importance. Does the High Court have power under Section 40(2) of the County Courts Act 1984 to order the transfer of proceedings to a county court, notwithstanding that the proceedings would otherwise fall outside the jurisdiction of the County Court?”

Having reviewed the authorities, he answered that question in paragraph 32 of his judgment:

“In my judgment, therefore, the power of transfer under Section 40(2) of the CCA 1984 is not limited to cases which would otherwise be within a county court’s jurisdiction. It follows that Master Bragge had power to make the order for transfer in the present case on 24 August 2007 and that as a result the Portsmouth County Court had jurisdiction to hear and determine it.”

Of course that was not the end of the case. There was a power to transfer and the question was whether that power should be exercised. That is why David Richards J went on to consider in paragraph 33 of his judgment whether or not it would be appropriate to exercise the power and concluded that it would be.

That latter question, that is to say, the appropriateness of transfer bearing in mind such matters as the convenience of the parties and so forth, is precisely the matter that is not under appeal in these proceedings. It is the matter that has been decided by judges both at Worcester and in the Royal Courts of Justice.

Morgan  J said that he was not considering – and indeed we are not considering -- an appeal from the order of District Judge Mackenzie on 26 August 2008. He was simply considering whether there should be a stay of that order. For the purpose of reaching a decision on that issue, he rightly considered so far as he was able to do so the prospects of the appellants’ appeal against that order, and concluded that they had no real prospect of succeeding. As I have said, the main point of law raised in the grounds was the point that was answered by the National Westminster Bank v King decision.

Although Mrs Crossley said that there had been an application for permission to appeal against the order of 26 August 2008, for whatever reason she was not able to produce the Appeal Notice to us and there is no evidence that it was ever filed or served. We, therefore, it seems to me, must proceed on the basis today that there has been no effective appeal against the order for sale dated 26 August 2008. In these circumstances, there is no possible basis for concluding that Morgan J erred in refusing to grant a stay of that order.

For the sake of completeness, I should mention that Mr Crossley in his submissions effectively invited us to put those matters of history to one side because he said that, quite irrespective of whether or not Morgan J erred in refusing to grant a stay, subsequently he and Mrs Crossley had made substantial payments to the respondents on account of the sums due and indeed have offered to pay further sums, therefore it was argued that in these circumstances the sale of the house was unnecessary.

These subsequent events which post-date Morgan J’s decision could not possibly be a basis for concluding that he had erred either in law or in principle. If it is said that there has been a change of circumstance which means that the order for sale is inappropriate for any reason, then that is a matter which must be raised before the Worcester County Court. It is in my judgment no part of this appeal.

So for those reasons, I for my part would dismiss this appeal.

I agree that the appeal should be dismissed for the reasons that have been given by my Lord Sullivan LJ. There is nothing that I could usefully add by way of reasons of my own.