Loan Agreement Claim

Southern & District Finance Plc V Elizabeth Mary Turner (2003)

The judge was wrong to hold that he had no power, pursuant to CPR 3.10, to correct an irregularity in applying for an extension of time to appeal. The judge could have mitigated any potential injustice to the respondent by imposing conditions on the order when granting the appeal.

Civil Procedure - Cpr

CA (Brooke LJ V-P, Longmore LJ, Sir Martin Nourse) 7/11/2003

LTL 7/11/2003 (Unreported elsewhere)

Document No.: AC0106017

Appeal from HH Judge Appleton's purported dismissal of an appeal on the basis of a procedural irregularity in applying for an extension of time to appeal. In June 1992 the claimants ('SDF') made a loan to the defendant ('T'), which was secured on her property. T fell into arrears and in May 1993 a suspended possession order was made.

In January 2001 T issued a notice seeking permission to counterclaim for a declaration as to the enforceability of the original loan agreement. She also sought to re-open the loan as an extortionate credit bargain and sought an order that the original possession order of May 1993 should be set aside. In March 2001 a district judge dismissed T's application to set aside the possession order and granted permission to counterclaim on a limited basis.

In November 2001 T's solicitors sought to appeal the order made in March 2001. The appeal notice did not include an application for an extension of time to appeal. The appeal was heard by the judge in December 2002. He brought the proceedings to an end without any judgment on the merits due to the fact that an extension of time for appealing had never been sought.

T accepted that there was no evidence before the judge to support the application for an extension of time. Her appeal was directed to the judge's refusal to exercise his discretion to waive the irregularity, pursuant to CPR 3.10, and thereafter to apply the criteria contained in CPR 3.9 to determine whether to grant the extension of time.

HELD: (1) Whether the judge decided he had no jurisdiction to hear the appeal or decided not to grant the extension of time formally sought at the hearing, the result was the same. His order purportedly dismissing the appeal was not one made by a judge on hearing the appeal, such that any appeal could only lie to the Court of Appeal as a second appeal. It was an order of the type discussed in Foenander v Bond Lewis (2001) EWCA Civ 759. Therefore the application for permission to appeal should have been heard by a High Court judge. However, Brooke LJ considered the application as a High Court judge and directed that the appeal be heard by a full Court of Appeal due to the excessive delay in the matter.

(2) The judge was clearly wrong to hold that he had no power to correct the irregularity pursuant to CPR 3.10. He had already concluded that the appeal had potential merit and CPR 3.10 unquestionably gave him power to give T permission to amend her notice of appeal to include an application for an extension of time and to waive the requirement for evidence if he considered it just to do so. If the judge had appreciated the extent of his powers, he would have appreciated that, if the point T was raising was a good one, to allow the appeal out of time might have led to a much more expeditious outcome to the litigation.

(3) The judge could have mitigated any potential injustice to SDF by imposing a condition when granting the appeal to the effect that T was not to be at liberty to claim the recovery of any of the money she had paid to SDF in the past even if the credit agreement were ultimately held to be unenforceable.

(4) The interests of the administration of justice clearly demanded that certain issues raised in the draft defence be tried as a discrete issue at an early date.

(5) The appeal was allowed and T was permitted to amend her original notice of appeal by adding an application for an extension of time for appealing.

(6) The district judge's order could be interfered with because he did not take into account material matters that could have led him to exercise his discretion differently. A paragraph was therefore added to that order allowing T to counterclaim on certain grounds refused by the district judge.

Appeal allowed.