Bradford & Bingley Building Socieity v Harper, estate of

A Court of Appeal consent order cannot be challenged in the same court merely by alleging that it was procured by fraud or false evidence. Where the proposed challenge requires a factual investigation, the applicant must bring a separate action in the appropriate first-instance court. The applicant must also show that the alleged fraud materially contributed to the order being challenged. A liberty to apply in a consent order concerned with enforcement does not ordinarily confer jurisdiction to set the order aside. A stay of enforcement should not be granted where proposed cross-claims are unquantified and lack a sufficient prospect of near-term recovery.

A mortgage possession dispute resulted in a 1996 possession order. Permission to appeal was later granted on whether allegedly improper fines and charges affected the arrears, but the appeal was compromised by a consent order of the Court of Appeal on 12 May 1999. The order capitalised the mortgage debt at £182,000, suspended enforcement during the mortgagor’s lifetime subject to conditions, and provided liberty to apply.

After the mortgagor’s death, his executor sought to set aside the consent order on grounds of false accounting, perjury and misleading evidence. The application had been refused in the county court and on appeal. The central issues were whether this Court could entertain the challenge and whether enforcement should be stayed.

1. Application dismissed. The Court of Appeal could not entertain the application to set aside the 1999 consent order. The application was misconceived because the alleged fraud required investigation of disputed facts.
2. The appropriate route was a fresh action in the Birmingham County Court. A challenge based on false evidence must establish that the alleged fraud materially contributed to the order sought to be set aside. Wood v Gahlings and James v Williams did not support reopening this consent order in the Court of Appeal.
3. The liberty to apply in the 1999 order related to enforcement, including its scheduled terms. It did not provide a route for setting the order aside. The agreed capitalisation of the mortgage debt at £182,000 was not displaced by the provisions concerning costs, and interest continued to accrue at the contractual rate after the mortgagor’s death.
4. The proposed damages and misselling claims were unquantified and did not justify a longer stay. The stay was continued only until 10.00 am on 28 January 2003 to allow practical arrangements to be made.
5. The Court recognised that false evidence is a serious matter, but that did not alter the proper forum or procedure for the proposed challenge.

• Court of Appeal (Civil Division): The application to set aside the consent order and for a longer stay was dismissed as misconceived. Permission to appeal was refused, with a short stay granted until 10.00 am on 28 January 2003.
• Birmingham County Court: A possession order was made on 12 April 1996. Subsequent applications to reopen the matter and to set aside the Court of Appeal’s 1999 order were refused, including by His Honour Judge McKenna on 3 December 2002.
• Court of Appeal (Civil Division), 12 May 1999: The earlier appeal was withdrawn by consent and enforcement of the possession judgment was stayed on agreed terms.