Mortgage Express v Robson & Ors

An appellate court hears an appeal from the order made below, rather than from the reasons given in the judgment. Where an alternative ground independently supports the order, an arguable error in another ground may not justify permission to appeal on its own. Nevertheless, permission may properly be granted where the legal issues are unusually complex and warrant consideration by a full court. A subrogation claim may preserve a lender’s entitlement to the principal and interest paid off under an earlier mortgage, subject to the factual and legal issues arising on the appeal.

Mortgage Express obtained an order for possession of a house against Keith Robson and Paul and Sandra McDonnell in Newcastle upon Tyne County Court. The proceedings concerned alleged beneficial interests, mortgage transactions affected by fraud and illegality, and the possible subrogation of Mortgage Express to Midland Bank’s rights.

Sandra McDonnell, appearing in person, applied for permission to appeal and for a stay of execution. The county court judge had held that illegality prevented the McDonnells claiming an equitable interest and, alternatively, that Mortgage Express was entitled to subrogation. The central issues were whether the judge had erred in applying Tinsley v Milligan and whether the subrogation conclusion independently supported possession.

1. Permission and stay. The application for permission to appeal and the application for a stay of execution were allowed. Permission was granted only to Mrs McDonnell, who was acting for herself.
2. Nature of an appeal. Lord Justice Robert Walker stated that the Court of Appeal hears appeals against orders, not against the reasons given in judgments. The judge’s conclusion on the effect of subrogation appeared clearly right, at least in relation to the principal and interest on the Midland Bank loan applied to the property. That conclusion would probably be sufficient to support the possession order if Mrs McDonnell could not make realistic proposals to repay that amount.
3. Illegality. The judge had relied on illegality to exclude the McDonnells’ equitable interest and had distinguished Tinsley v Milligan [1994] 1 AC 340. The court expressed uncertainty about whether that distinction was correct, noting that the House of Lords had decided that the claim in Tinsley v Milligan could succeed despite the illegality involved. The issue was sufficiently difficult to merit consideration by the full court.
4. Final direction. The court did not express a concluded view on the ultimate merits of the illegality issue. A transcript was to be provided to Mrs McDonnell at public expense, and legal advice before pursuing the appeal was strongly encouraged.

• Court of Appeal (Civil Division): Permission to appeal from the possession order made by His Honour Judge Walton in Newcastle upon Tyne County Court on 10 November 2000 was granted to Sandra McDonnell. A stay of execution was also granted.