Bank Of Baroda v Rafique

Where mortgage possession proceedings include an unresolved claim for sale and related proceedings concerning the same property are pending, the Court of Appeal may coordinate the proceedings to protect the value of the asset and avoid inconsistent outcomes. It may remit the sale issue for determination by the county court, direct expedition or sequential hearing of related proceedings, and defer listing of the appeal while preserving its place in the list. Those directions can be made without deciding the merits of the sale claim or the pending appeal.

A bank obtained judgment for possession in the Kingston County Court against a husband and wife in respect of mortgaged residential premises. The wife, who claimed an equal equitable interest, defended on the ground that the mortgage had been procured by undue influence. That defence failed. The county court gave possession but left undecided the bank’s alternative claim for sale under section 30 of the Law of Property Act 1925.

The wife appealed, and leave to appeal and a stay of execution had been granted. The bank sought removal of the stay, relying on accruing interest under a further charge and the risk of loss in the value of its security. Related proceedings by the Bradford and Bingley Building Society concerned the first mortgage and involved the same defence. The central issue was the appropriate procedural course pending determination of the sale claim, the related proceedings and the appeal.

Case-management disposition

1. Application and appeal. The Master of the Rolls gave the judgment. Lord Justice Kennedy and Lord Justice Phillips agreed. The application to remove the stay was not granted, and the court did not determine either the merits of the wife’s undue-influence defence or whether an order for sale should be made.
2. Preservation of the asset and coordination of proceedings. The court was concerned that delay could squander the value of the property through accruing interest. The related proceedings could affect both the merits of the appeal and the value of the bank’s security. It was therefore appropriate to coordinate the proceedings rather than allow the appeal timetable to operate in isolation.
3. Remittal. The issue whether there should be an order for sale under section 30 of the Law of Property Act 1925 was remitted to the Kingston County Court, preferably to the judge who had tried the case. Both parties were permitted to adduce relevant additional evidence and make further submissions.
4. Related proceedings and listing. The county court was directed, so far as practicable, to bring the Bradford and Bingley proceedings on promptly and, if possible, to determine them before or in succession to the sale issue. The appeal was not to be listed until after those proceedings had been determined, but it was to retain its place in the Court of Appeal list so that the parties were not prejudiced by the court’s initiative.
5. Final order. The appeal might become unnecessary depending on the county court’s determinations. No order was made as to costs.

• Court of Appeal (Civil Division): In [1996] EWCA Civ 722, the court remitted the unresolved sale issue to the Kingston County Court, directed coordination of related proceedings, deferred listing of the appeal and made no order as to costs.
• Kingston County Court: The wife’s undue-influence defence failed. Judgment for possession was given, but the alternative claim for sale under section 30 of the Law of Property Act 1925 was not determined.