Lloyds Bank Plc v Dix & Anor

An appellate court should not order a retrial for procedural unfairness or irregularity where the litigation could only have one result on the merits. The relevant question is whether an adjournment would or reasonably might have made a material difference to the outcome. A mortgagee’s possession claim is not defeated where the charge remains valid, the debt is admitted at least to the value of the equity, and the pleaded counterclaims disclose no legally sustainable defence. Counsel must not plead fraud unless satisfied that reasonably supportable evidence exists.

The defendants, husband and wife, appealed from orders of Bristol County Court granting Lloyds Bank possession of their jointly owned property and a money judgment, while limiting recovery in substance to the property’s equity. They also challenged the refusal of a further adjournment and sought permission to amend their defence and counterclaim.

The proposed claims concerned bridging finance, an unauthorised current account, alleged agreements to settle the debt and procure release of the charge, an alleged undervalue sale, and proposed allegations of forgery. The central issues were whether the refusal to adjourn denied a fair trial and whether the existing or proposed pleadings disclosed any case capable of defeating the bank’s limited claim.

1. Appeal dismissed unanimously. The appellants had experienced serious legal-aid difficulties and were disadvantaged by the refusal of an adjournment. Nevertheless, they had known for months that they might have to conduct the trial as litigants in person and should reasonably have prepared on that basis.
2. The court accepted that a late withdrawal of legal aid might raise issues under article 6, referring to Airey v Ireland (1979-80) 2 EHRR 305. However, procedural unfairness cannot justify a retrial where an adjournment would not or could not have affected the result. The court does not act in vain.
3. Applying that principle, the bank’s claim was inevitable on the pleadings. The charge was valid and subsisting. The allegations concerning the 1990 proposals disclosed no legal obligation on the bank to release it. The alleged 1991 agreement to accept £85,000 could not, on the pleaded facts, support damages; if the debt had been tendered and refused, the appellants might have had a different case.
4. The proposed amendment added no defence capable of defeating possession or a money judgment limited to the equity. Allegations of forgery or other misconduct, even if proved, did not affect the validity of the charge or the minimum debt owed.
5. Counsel should not plead fraud unless there is evidence which may reasonably support the allegation. The money judgment was to be amended to reflect the bank’s concession that recovery was limited to the value of the equity. The application to admit further evidence became academic.

• Court of Appeal (Civil Division): Appeal from orders of Bristol County Court made on 1 and 4 November 1999 dismissed. The court held that the refusal to adjourn did not warrant a retrial because the appellants’ case was bound to fail on the merits.
• Bristol County Court: His Honour Judge Neligan refused a further adjournment, dismissed the counterclaim, and ordered possession and judgment for the bank, subject to the bank’s limitation of recovery to the property’s equity.