Sarwar v Royal Bank Of Scotland Plc

Permission to appeal should be refused where the court is satisfied that the proposed appeal has no real prospect of success. An earlier agreement to release security may be superseded by fresh lending arrangements made on terms retaining existing security, where the borrower knew and accepted those terms. A statutory argument under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 need not be determined if the factual findings independently dispose of the application. The court also warned that lack of legal advice does not make several months’ delay in lodging an appellant’s notice safe.

The claimant sought declarations that two legal charges granted to the bank were unenforceable, void for misrepresentation or released, together with delivery up of the relevant title deeds. The charges secured lending for a garment manufacturing business.

The High Court dismissed the action after a four-day hearing and refused leave to appeal. The judge found that an initial agreement to release the Bury security had been superseded by fresh lending arrangements in October 1991, and that the claimant knew by 1992 that the bank relied on both the Bury and Leeds charges. The claimant sought permission to appeal, arguing that the issue had to be analysed under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. The central issue was whether the proposed appeal had a real prospect of success.

1. Application refused. The court applied the permission test that an appeal should proceed only where it has a real prospect of success. It was satisfied that this proposed appeal did not meet that threshold.
2. The trial judge had accepted that the original July 1991 agreement provided for release of the Bury charge once the Leeds charge was in place. However, he had found that the parties entered fresh lending arrangements when the facility was increased to £70,000 in October 1991. Those arrangements included a term that the new facility would be secured by security already held by the bank.
3. In light of the claimant’s knowledge that the bank retained the Bury charge document and intended to rely on that charge as well as the Leeds charge, the finding that he knew and accepted the new arrangement was open to the judge. The proposed challenge therefore had no real prospect of displacing the conclusion that the bank could continue to rely on the Bury security.
4. The claimant’s argument under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 did not require determination. The judge considered it unnecessary to decide the statutory issue because the fresh lending arrangements and the claimant’s knowledge independently resolved the matter. The Court of Appeal did not determine the Act’s detailed application.
5. The court added an obiter warning concerning delay. A litigant without legal advice should not assume that several months can safely pass before lodging an appellant’s notice when intending to appeal. It was unnecessary to decide whether the delay here would, by itself, justify refusing an extension of time.

Permission to appeal was refused, subject to legal aid assessment.

• Court of Appeal (Civil Division): On 8 February 2001, Lord Justice Chadwick refused permission to appeal. The court was satisfied that the proposed appeal had no real prospect of success: [2001] EWCA Civ 252.
• High Court of Justice, Chancery Division: Mr Justice Blackburne, sitting as Vice-Chancellor the County Palatine of Lancaster, dismissed the claimant’s action on 14 July 2000 and refused leave to appeal.