Neutral Citation Number: [2017] EWHC 2413 (Ch)

Claim No HC-2015-003725
IN THE HIGH COURT OF JUSTICE 
CHANCERY DIVISION

Royal Courts of Justice. Rolls Building 
Fetter Lane, London. EC4A 1NL

Date: 5 October 2017
Before :

MR JOHN BALDWIN QC
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Between:

	SANTANDER UK PLC	Claimant	
	and		
	1. CLIVE ROGER WELLS 
2. GRAHAM MERVYN WELLS	
Defendants	
	and		
	1. HERTFORD SOLUTIONS LLP 
2. PHILIP THOMAS CHAVE	
Interveners	

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Brian Hurst (instructed under the Bar Direct Access provisions) for the first Defendant
Shakil Najib (instructed by Sydney Mitchell LLP) for the first Intervener

Hearing date: 28 September 2017
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JUDGMENT
John Baldwin QC
1. This is an application by the second Defendant, Mr Graham Wells (GW), for permission to file out of time an application notice, a second witness statement and Points in Answer in these proceedings. It has been made following my judgment handed down on 21 July 2017 ([2017] EWHC 1808 (Ch)) in which, pursuant to an application by the first Intervener (Hertford), I held that the second Intervener (Mr Chave) had no locus to make the contentions he was seeking to make with the result that his pleadings must be struck out. In order to understand GW’s application it is necessary to appreciate the context in which these proceedings and this action came into being. Much of the relevant history is set out in my earlier judgment but for convenience I shall repeat some of it here.
2.	Some time ago the party named as Claimant (Santander) entered into a loan agreement with GW and his brother, the first Defendant Clive Wells (CW), part of which involved a charge over the Wells’ jointly owned property at 67 St Edmunds Road. There was a default in repayment of the loan which led to Santander issuing proceedings for possession in the County Court, obtaining possession and, on 10 March 2015, selling the property. There was a surplus of funds after Santander’s charge had been satisfied and Santander paid these monies into court since, I was told, there was uncertainty as to what should become of them. I was also told, by Mr Hurst, counsel for GW, that Santander would have notified GW and CW of this payment into court.
3.	Meanwhile, in February 2014 Hertford entered into a loan agreement with the Wells brothers which was secured over the same property at 67 St Edmunds Road. Again there was a default in repayment and on 9 June 2104 Hertford issued proceedings against GW and CW for possession. On 17 July 2014 the County Court made an order for possession by 14 August 2014 and subsequently warrants for possession were made and there were applications for suspension thereof. The applications for suspension came before DJ Morely on 30 January 2015 and his order records that the application of GW (as well as that of CW) was dismissed. The warrant for possession was reissued on about 2 February 2015 and was due to be executed on 16 March 2015. By that time Santander had sold the property and received payment therefor. At no time during these proceedings for possession did GW (or anyone else) contend that the loan agreement between Hertford and the Wells brothers was unfair or that Hertford’s charge was other than valid and proper.
4.	On 27 May 2015 Hertford made an application with respect to the funds paid into court by Santander, asserting that its charge ranked in priority immediately behind Santander’s and, accordingly, it was entitled to payment out of the sums lodged in court. Hertford’s application was to be joined in the proceedings in which Santander was named as Claimant and the Wells brothers as Defendants and the action number was given as 225/2015. I was told that the action number and the naming of the parties was a result of a decision of Master Matthews made at hearing in January 2016 but that cannot be right as these details are recorded on Hertford’s application in May 2015.
5.	Meanwhile, on 28 April 2015 Mr Chave obtained a judgment for a money sum against GW and CW and an order that, inter alia. 67 St Edmunds Road stand charged with payment of the sums due with the proviso that, in case the property had been sold pursuant to any prior charge, the proceeds of sale after discharge of prior charges be payable to him.
6.	On 28 October 2015 Mr Chave made an application to be joined in these proceedings (i.e. a similar application to that made by Hertford on 27 May 2015) claiming entitlement to the monies paid into court by Santander and also claiming that his charge should take priority over Hertford’s and seeking a declaration that Hertford’s charge was unenforceable.
7.	Hertford’s and Mr Chave’s applications to intervene came before Master Matthews on 14 January 2016 and he gave directions whereby Mr Chave file a statement of case setting out his position and Hertford file a statement of case responding thereto. There were further consequential directions and the order contemplated a further directions hearing sometime after 14 April 2016.
8.	As noted earlier, I was told by counsel that it was at the hearing on 14 January that Master Matthews devised this procedure for determining the dispute between Hertford and Mr Chave as to the entitlement to the sums paid into court by Santander, the description of Santander as Claimant and the Wells as Defendants being considered the most appropriate. That description has been convenient but it is important to be recognise that Santander has no claim against the Wells and seeks no relief against them. Moreover, there is no claim form, no pleadings as between Claimant and Defendants, no requirement for the Wells to acknowledge service or other like matters as one would associate with an action.
9.	On about 19 July 2016 the court listed a directions hearing in the matter to take place on 18 August 2016 before Master Matthews. On 12 August 2016 GW made a witness statement for use by Mr Chave at this hearing. By his paragraph 2 he said he was making the statement in support of the intervention of Mr Chave in the matter. He then goes on to describe the circumstances wherein the loan agreement with Hertford came into being. At the end of bis statement he says that if it be the case that he has entered an agreement with Hertford then he wishes the court to set aside the terms which apply penal interest rates. He goes on to say that any relationship between him and Hertford is unfair and he asks the court to set aside the loan contract entirely or, if not, to reduce the interest rate payable. However, he did not attend and was not represented at the hearing before Master Matthews.
10.	On 18 August Master Matthews made a case management order for the trial between 1 March 2017 and 31 May 2017 of the issue as to whether Hertford held a valid charge against the property at 67 St Edmunds Road and was therefore entitled to payment out of court (of the sums paid in by Santander) in priority to Mr Chave. He also ordered that his order be served on GW and CW (as well as the other parties) and it is plain that he did so in order that they would know what was going on with respect to the monies which Santander had paid into court.
11.	On 6 February 2017 Mr Chave made an application for specific disclosure and further information pursuant to CPR Part 18 and on 5 April 2017 Hertford made an application to strike out parts of the Points of Claim. These applications came before DM Linwood on 10 April 2017. He vacated the trial date and gave directions which resulted in the matter coming before me in early July 2017 and my judgment on the 21 July 2017.
12.	Meanwhile, on 28 June 2017 solicitors on behalf of GW, and in the context of a parallel set of proceedings which were also before me in July 2017, wrote to the court (copy to the other parties) informing it that GW would not be attending or taking any part in the July proceedings and that it had been instructed to pursue a claim against Hertford under sections 140A-C of the Consumer Credit Act 1974.
13.	By letter dated 24 July 2017 (some 3 days after my judgment was handed down) GW wrote to the court enclosing his application notice, a second witness statement and, as an exhibit, a document headed “Points in Answer of Graham Mervyn Wells”. According to the witness statement this document sets out the basis on which he will ask the court to grant relief under the Consumer Credit Act 1974 (the “CCA”). The witness statement also asserts that the factual issues that will arise are the same as those in the present Santander claim. However, since that claim has been struck out, this point is not in GW’s’ favour.
14.	GW’s witness statement in support of his application is not lengthy. It contains a request to extend time to file the Points in Answer but provides no explanation or reason as to why that request should be granted, or why his contentions were not raised before the County Court when Hertford sought to enforce its charge against him (in 2014 and 2015), or why they were not raised in August 2016 when he made a statement in support of Mr Chave’s intervention in these proceedings and referred to his contentions in relation to section 140A-C of the CCA, or why he did nothing to have his contentions ventilated at the same time as those of Mr Chave (i.e. at the hearing which ultimately came before me in July 2017).
15.	During argument in the context of GW’s application to extend time, I asked his counsel, Mr Hurst, when it was that GW should have made that application. His response was that he did not need permission to serve out of time and that an application made by GW at any time would be proper and should be considered without more. It does not seem to me that this can be right. In the absence of any specific requirement as to time provided by the CPR, it seems to me that an application in extant proceedings should be made within a reasonable time of the person making it becoming aware of the need to make it (or of when he should have been so aware) and sufficiently far in advance of any relevant hearing concerning the matter for that hearing to be conducted efficiently by the parties concerned. These strike me as common sense principles which accord with the overriding objective. The alternative proposed by Mr Hurst makes little sense and is inconsistent with GW’s own recognition (no doubt a product of advice) that he needs permission to make his application out of time.
16.	GW has not condescended to reveal when he became aware of these proceedings to determine the fate of the money paid into court by Santander but it was clearly sufficiently long before his witness statement of 12 August 2016 for him to prepare a statement of that date for use at the August directions hearing. Moreover, since he is a person likely to be interested in the fate of the monies from the sale of what once was his jointly owned property, there are grounds for inferring a much earlier date. Further grounds for such an inference are provided by the fact that GW has chosen to remain silent about such an obviously relevant matter.
17.	Mr Hurst countered this by asserting that Hertford have not proved that GW was aware of the possession proceedings against him in 2014/5 (quite how that sits with GW having made an application in those proceedings, as recorded in an order of the court, was not explained to me) or of these proceedings at any date prior to August 2016. I do not think that is an adequate riposte. It is GW’s application, he is best placed to know the true position and he has chosen to keep silent. I do not think it appropriate to make inferences in his favour. Nor do I think it appropriate to place upon Hertford the evidential burden of proving GW’s state of knowledge about these matters, particularly when he has put in a witness statement in support of his application and has had legal advice and representation.
18.	In his witness statement GW states that he wishes to act together with Mr Chave and his legal advisers in pursuing his claim. It was, perhaps, this which led Mr Najib, for Hertford, to submit that the case was one of classic abuse of process. He made two points. First he said that GW had no financial interest in the monies in court, since if Hertford were not to get them, they would all go to Mr Chave whose claim over GW was for sums in excess of those monies. Second he submitted that Mr Chave was using GW for a second bite at the cherry (my words not his). He submitted that what was really happening was that now that Mr Chave has lost on locus (i.e. he has no locus to complain of the circumstances of the Hertford/Wells loan agreement), he is putting up GW thereby elevating the supporter of August 2016 (see GW’s witness statement in support of Mr Chave) to the main player over 12 months later with all the duplication that such would involve. That, he submitted was not a proper use of court resources.
19.	Mr Najib went further and, relying on Henderson v Henderson principles, submitted that the time, if any, for GW to challenge Hertford’s charge was when Hertford first sought to enforce it, i.e. at some time during the possession proceedings of 2014/2015 or, if not then timeously in these proceedings when the fate of the Santander monies in court were being considered. He drew my attention to Dickinson v UK Acorn Finance [2015] EWCA Civ 1194 in particular [10] - [12], [19] - [21]. That was a case under Financial Services and Markets Act 2000 but he submitted that similar principles apply to the CCA.
20.	In answer Mr Hurst submitted that it would be grossly unfair to deny GW the opportunity to seek redress in relation to the unfair contract he had entered into, especially in circumstances where Hertford’s conduct has been disgraceful. Moreover, although there was no detailed evidence about Hertford’s conduct on this application, he urged me to consider all the evidence which Mr Chave had filed in the strike out application which I heard in July. It was not necessary for me to consider this evidence in detail on that occasion, although I looked at in my preparations for the hearing. It tells one side of the story and has not been tested.
21.	Furthermore, Mr Hurst submitted that it was plainly wrong for Mr Najib to contend that GW’s application was of no benefit to him since when GW knocked out the Hertford charge, monies would be available to Mr Chave and so would reduce GW’s indebtedness to Mr Chave to that extent.
22.	With respect to Mr Najib’s submission that GW should have applied to intervene earlier if he wished to intervene at all, Mr Hurst submitted that Hertford had known all along that its application to strike out based on lack of locus was pointless as GW could step in at any time. This was not a submission that Mr Hurst made at the hearing of the strike out application and it is not clear to me what facts Mr Hurst relies upon for his submission. Moreover, given GW’s witness statement of August 2016 (including those paragraphs referred to at paragraph 9 above) and his conduct thereafter, anyone could be forgiven for thinking GW was not intending to intervene.
23.	Mr Hurst also submitted that GW had already made his application to be joined in these proceedings and the appropriate course now was to provide suitable directions for it to be determined. In this respect he relied on the content of GW’s August 2016 witness statement, as referred to in paragraph 9 above. Had GW appeared before Master Matthews last August, he may have been able to get such a proposition off the ground. Since he chose not to do so the submission has no substance.
24.	Mr Hurst went on to rely on s. 140A(4) of the CCA which provides that “A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended”. He submitted that this section supported his argument that GW’s failure to raise his complaint under the CCA at some earlier time was nihil ad rem or, if not, a matter of little consequence bearing in mind the villainy of Hertford. In my judgment, this section does not go as far as Mr Hurst would like. It is merely a factor I have to take into account when reaching a conclusion as to the appropriate order to make.
25.	Mr Hurst also relied on s. 140B(9), which provides that where there is an allegation of unfairness to the debtor, it is for the creditor to prove to the contrary, and Bevin v Datum Finance [2011] EWHC 3542 (Ch) which is to the effect that all a debtor need do is make an allegation of unfairness. He submitted that when considering the merits of the application, GW had made that allegation of unfairness and, accordingly, he had done enough for his application to intervene to be allowed.
26.	Mr Hurst also relied upon the fact that GW had already filed a Points in Answer and, therefore, the proceedings were ripe for further directions towards a trial of the issue. I have considered these Points in Answer and in my view they are not a suitable substitute for either a Points of Claim or a Points of Defence. It is not at all clear what they are answering and when I raised this with counsel I was given the answer that they were following the model devised by Master Matthews in 2016. However, that model was not devised in the context of any claim by GW, it was to determine the dispute between Hertford and Mr Chave. I have no doubt that if GW had taken proper steps to join in that dispute at the appropriate time, then Master Matthews would have dealt with his application in a suitable manner. But for reasons unknown he did not do so.
27.	I have considered carefully the submissions made by the parties and have reached the conclusion that Mr Najib is right and that this application is an abuse of process. GW has had plenty of opportunity to bring his complaints (about the 2014 loan agreement with Hertford) before the court at a time when they could have been adjudicated upon but has chosen or neglected not so to do and has given no adequate explanation therefor. Moreover, it is clear from what has happened that he has been supporting Mr Chave for a considerable period (at least since mid 2016) and has been content to do nothing whilst Mr Chave and Hertford battled it out between themselves. I am satisfied that, in the events that have happened, it would be an abuse of process for GW now to raise his complaints regarding the loan agreement he and his brother entered into in 2014 and seek to undo or interfere with the judgments against him in the possession proceedings and to meddle with the consequences of my judgment in these proceedings. I refuse his application to intervene.
28.	Even if I had concluded that it was not now too late (bearing in mind what has passed) for GW to complain about the 2014 loan agreement, I would not have permitted him to intervene in these proceedings in the High Court. Since I have struck out Mr Chave’s claim, these proceedings are over and the Santander monies in court will be paid out to Hertford (subject to any appeal or stay of execution of my order). As already noted. GW’s Points in Answer are not suitable for use as a pleading and therefore there is little or nothing to be said for this case continuing in the High Court. Mr Hurst pointed out that evidence had already been filed and that there would be duplication of effort if the matter had to go to the County Court. I accept that the matter would start afresh but there would be a need for pleadings to define the issues and evidence would follow in due course. That would be directed to the pleaded case and, in so far as it has already been gathered, the additional expense of tailoring it to the County Court proceedings (in so far as tailoring was necessary) would not be such as to cancel out other benefits. Had I not refused GW’s application, I would have directed that any application he might be disposed to make based on the provisions of s. 140A-C of the CCA be made to the County Court. That decision would have been based on case management reasons and the greater suitability of that court for dealing with the matter.