Birmingham Midshires Building Society v Foden

Permission to appeal is unlikely to be granted where the proposed appeal challenges findings of fact based on the trial judge’s assessment of witnesses, unless there is a realistic prospect that the findings will be overturned. A borrower who is the principal debtor remains liable notwithstanding the release of property provided by a surety as collateral security. Contractual provisions protecting the lender and surety do not ordinarily confer a benefit on the principal debtor. An estoppel argument may fail where the borrower’s subsequent conduct is inconsistent with the alleged representation or release. Sympathy for the consequences of litigation cannot justify permission where the proposed grounds have no realistic prospect of success.

This was a renewed application by Mrs Foden for permission to appeal against an order of the Plymouth County Court made on 22 March 2000. The order required her to give possession of Clevedon to Birmingham Midshires Building Society and to pay £96,248.30 outstanding under the mortgage.

The dispute concerned the interest rate and monthly repayment stated in the mortgage charge, the effect of releasing collateral security over Glen View granted by Mrs Foden’s parents, and the accuracy of the arrears. The central question was whether any proposed appeal had a realistic prospect of overcoming the trial judge’s factual findings and the legal conclusions drawn from the mortgage arrangements.

1. Application dismissed. The court refused permission to appeal. Permission to appeal to the House of Lords was also refused. There was no order for costs.
2. The principal factual issue was when the mortgage charge over Clevedon had been signed and whether its interest-rate alterations had been made before signature. The trial judge had heard and observed the witnesses and found that Mrs Foden probably signed the document in its present form, including the interest loading. There was no realistic possibility that the Court of Appeal would overturn that finding. It effectively disposed of the main case.
3. Mrs Foden was the principal debtor. Her father, and later her mother, provided collateral security only. The release of the surety’s security did not release the principal debtor. The mortgage condition stating that security would remain until all sums owing had been paid did not establish joint and several liability or otherwise assist Mrs Foden.
4. The relevant provisions protected the parents as sureties and the Building Society. They were not provisions for the protection of Mrs Foden. An estoppel argument could not succeed on the court’s view of the mortgage dealings and subsequent conduct. Mrs Foden disputed the judge’s statement that she had continued to pay the mortgage after the release, explaining that payments had been made from rents under a court order; the dispute was recorded for an addendum.
5. The challenge to the arrears was another challenge to a factual matter determined by the county court on material that had not been substantially disputed. It could not properly be reopened on this application.

The court expressed sympathy for the severe consequences of the family and property arrangements, but sympathy did not provide a ground for permission where the proposed challenges had no realistic prospect of success.

1. Court of Appeal (Civil Division) — On the renewed application, permission to appeal was refused. Permission to appeal to the House of Lords was also refused. There was no order for costs: [2001] EWCA Civ 29.
2. Plymouth County Court — On 22 March 2000, His Honour Judge Overend ordered Mrs Foden to give possession of Clevedon and to pay the Building Society £96,248.30.