Jameer v Paratus AMC

On 31 May 2006 Ms Jameer granted a mortgage to GMAC RSC Limited, now called Paratus, over her property at 50 Albert Road, Belvedere in Kent. The capital sum owing under the mortgage was £202,000. By May 2010 the monthly payment due under the mortgage was £978.09, which was entirely referable to interest. Arrears of the monthly instalments had begun to accrue in July 2008, and rose steadily between then and May 2010, when the lender began proceedings for possession. By that time the amount in arrears was £13,630-odd. By the following month they had risen again to £14,609-odd. In her defence form Ms Jameer gave her total income as £436.80 per month, which was clearly insufficient to pay the interest due on the mortgage. In fact, the Paratus charge was not the only charge over the property. There was a second charge in favour of Kensington Mortgage Company Limited. By the time the case came to court Ms Jameer had applied for support mortgage interest, which she said would pay the current monthly payments. She had also applied for Jobseeker’s Allowance.

On 25 January 2011 Deputy District Judge Saunders entered judgment against Ms Jameer for £223,508, which was the total amount due under the mortgage, and also made an order for possession of the property. He made an order for possession on the same occasion in favour of Kensington Mortgage Company Limited, the second mortgagee. On 4 April, with the help of Shelter, Ms Jameer completed an income and expenditure form. Her total income was given as £2,549-odd per month. That included a monthly sum of £1,200 from lodgers. Her monthly outgoings were stated at £2,287-odd, leaving a difference of £261. On that basis, she made an offer to pay £200 a month towards the arrears.

On the following day a warrant for possession was issued, and Ms Jameer applied to suspend the warrant. That application came before District Judge Greenfield, who suspended the warrant on terms that Ms Jameer pay the current instalments as they fell due, and £200 per month towards the arrears of £19,000-odd from 1 May 2011, increasing to £400 per month of the arrears starting on 1 July. In the following month Ms Jameer completed another income and expenditure form, stating that he income from lodgers was £1,860 per month. Ms Jameer did not make the monthly payments required by the order, so Paratus re-issued a warrant for possession on 19 January 2012. This was later withdrawn when Ms Jameer made proposals for payment which Paratus accepted, and gave Ms Jameer a further opportunity to pay. She did make some payments, but not as much as the terms of the suspension required. So the warrant for possession was reissued.

By 2 May 2012 the arrears had risen to £22,507. Thus not only had Ms Jameer failed to reduce the arrears, she had not even been paying monthly instalments as they fell due. Once again, she applied to suspend the warrant. Her application stated that he financial and job circumstances had changed. That application came before Deputy District Judge Pithouse on 2 May. He noted that the terms of the suspension had not been complied with, and said there did not seem to have been any attempt to comply with those terms. He took the view that it would be a waste of everybody’s time and money if Jameer were given another opportunity to pay off the arrears. He therefore refused to suspend the warrant.

Ms Jameer appealed. In her Appellant’s Notice she said that she was asking for the warrant to be suspended on payment of the mortgage instalments plus £200 a month towards the arrears. In other words, she was not contending that she could comply with the terms of the suspension originally ordered by District Judge Greenfield. Assuming that the terms of that proposal were adhered to, it would take over nine years to eliminate the arrears of interest.

Ms Jameer’s appeal came before HHJ Cameron that same afternoon. The judge took account of the history of non-payment and mounting arrears and took into account information that Ms Jameer had given about her financial situation. This information included the prospect of a partnership bringing in £1,000 per month, and Ms Jameer’s income from tenants and lodgers of £2,555 per month. As against that, there was the second charge on the property, and also another charge on a buy-to-let property that Ms Jameer owned. All in all, the judge took the view that the overall financial commitment under the mortgages was beyond Ms Jameer’s means, and consequently he dismissed the appeal.

That would usually be the end of the road, but on 14 May Aikens LJ gave Ms Jameer permission for a second appeal. He did so on terms that Ms Jameer file up-to-date information on her employment situation and her record of making the outstanding mortgage since 3 May 2012. It is important to note that the basis on which permission to appeal was granted was that it would be incumbent on Ms Jameer to show that she could comply with the terms of the suspension contained in the original order of District Judge Greenfield on 15 April 2011, not with the reduced payment plan that she had put forward in her second application to suspend the warrant. That meant, therefore, that Ms Jameer had to show that she could pay the current instalments as they fell due, and £400 per month towards the arrears.

On 28 May 2012, Ms Jameer wrote to the Civil Appeals Office. In her letter she said that she had an employment contract with Global Crescent Visas Limited due to begin on 2 July 2012, leave enjoyed in connection with the London Olympics, and also the possibility of a partnership with Goldfield, a firm of solicitors. She had made a payment of £1,400 on 28 May, and said that the same amount would be paid each month. In fact, the same amount has not been paid each month, as the schedule attached to the skeleton argument prepared by Ms Hallett on behalf of Paratus demonstrates. In some months there were no payments at all; in one month, there was overpayment of £2,400, but the arrears had not been substantially reduced in accordance with the terms of the suspension.

Ms Jameer’s contract of employment is for a position of a manager, giving her working hours as 9.30 to 5.30, Monday to Friday. That job seems, on the face of it, to be incompatible with a partnership with a firm of solicitors, which Ms Jameer asserted in her letter was under active consideration, but which since seems to have faded into the background. The salary is £28,000 per annum before tax, which we are told this morning equates to some £1,700 per month after tax. But there are no wage slips which Ms Jameer has produced, and we were shown this morning that the Deputy District Judge was in fact told that this company was in liquidation. Ms Jameer has also disclosed some lodger agreements for rooms at 50 Albert Road. Originally the documents she produced were all expired contracts, but this morning she has produced some more, some of which are still current. But curiously, some of the lodger agreements are in conflict with an assured shorthold tenancy agreement which Ms Jameer also produced, which purported to let the whole property from 23 April 2011 to 22 April 2012, at a rent of £1,200 per month, over double the highest amount paid by any of the lodgers. Mr Gloag, instructed at very short notice on behalf of Ms Jameer, tried to explain these inconsistencies, but I did not find the explanation remotely convincing.

Ms Jameer also produced another income and expenditure form, that differs from the last in a number of respects. It included lodger income of £1,860 per month; it omitted expenditure on a number of items, all of which appeared in the 2011 version, for example mobile phone, travel fares and Sky TV. Neither the 2012 nor the 2011 version made any allowance for expenditure on clothing or social life. Bearing in mind that the arrears will take many years to reduce, even under the terms of the suspension, those are significant omissions. There are arrears on the Kensington mortgage of over £7,000. There are arrears on a Mortgage Express mortgage over the buy-to-let property of £3,000. It is true that Ms Jameer’s payment record since May has been better than it has been in the past, but as I have said she has not fully complied with the terms of the suspension.

The legal question for us is whether in the light of the further information that Ms Jameer has provided, HHJ Cameron was wrong to dismiss her appeal against the refusal of Deputy District Judge Pithouse to suspend the warrant for a second time. The jurisdiction that both judges were exercising was that conferred by section 36 of the Administration of Justice Act 1970. That provides that the court may exercise certain powers if it appears to the court that the mortgagor is likely to be able within a reasonable time to pay any sums due under the mortgage, or to remedy a default consisting of a breach of any other term of the mortgage. Leaving aside repayment of the principal sum, the question then is whether Ms Jameer could pay off the arrears of interest within a reasonable time. That is a jurisdictional gateway (see Zinda v Bank of Scotland [2011] EWCA Civ 706). It is only if that gateway is open that the court has a discretion to exercise. Mr Gloag accepts that Ms Jameer’s case suffers from a lack of clarity.

In my judgment, a borrower who asks the court to exercise a discretion in his or her favour to allow further time for payment of arrears due under a mortgage must present, frankly and fully, up-to-date information about his or her expenditure and income, such that the court can place reliance on what is being said. Assuming that the jurisdictional gateway was open, both District Judge Pithouse and HHJ Cameron exercised their discretion against Ms Jameer. I do not consider that even now, she had demonstrated an ability to comply with the terms of the suspension ordered by District Judge Greenfield in terms that the court can rely on. There is too much uncertainty in her income, both as to its sources and amount, and obvious omissions in her declarations of expenditure. Even when, on her own evidence, she has had the funds to make payments to Paratus, she did not do so. Both judges below were entitled to take into account her poor payment history, and to reach the conclusion that what she was offering was too little, too late. Neither judge can be said to have taken into account irrelevant factors, or to have failed into account relevant factors. Unless the decisions can be categorised as plainly wrong, the weight to be given for the various factors is a matter for the person exercising the discretion, rather than for an appeal court.

I do not consider that Ms Jameer’s case, even on the up-to-date information which has been presented to us, is so overwhelming that we are entitled to say that either judge reached a decision that was plainly wrong. Some judges might have given Ms Jameer another chance, but the fact that these judges did not does not mean that their decisions were plainly wrong.

I would dismiss the appeal. We consider that Ms Jameer should seek the permission of a circuit judge before making any further application to suspend the warrant. We could understand if a judge faced with such an application, in the light of the recent payment history, might well grant it if there is a credible payment plan supported by proper evidence to show that Ms Jameer, even at the last minute, can comply with the terms of the suspension originally ordered by the district judge.

I agree.