I Group Loans Ltd v Bradshaw

An order made by a court with jurisdiction to make that type of order, but reached through an error of law, must ordinarily be challenged by appeal. It cannot be treated as having been made without jurisdiction merely because a statutory restriction was overlooked. The exceptional power to set aside an order ex debito justitiae applies where a fundamental precondition to the court’s power to make any order was absent. Whether the statutory conditions for enforcing a regulated credit agreement were satisfied required determination by the court and did not remove its jurisdiction to make a possession order. Procedural control, including time limits and extensions of time, supports the appeal route.

The defendant had borrowed money secured by a mortgage over his home and, after falling into arrears, faced possession proceedings. A possession order was made in the Leicester County Court while he appeared in person. He later alleged that the credit agreement was improperly executed and irredeemably unenforceable under the Consumer Credit Act 1974, relying on sections 65(1) and 127(3).

The County Court struck out his application to set aside the possession order as procedurally misconceived and later refused to rescind that decision. On appeal, the issue was whether the alleged statutory unenforceability deprived the County Court of jurisdiction, so that the possession order could be set aside, or whether the defendant was required to appeal under CPR Part 52.

1. Appeal dismissed. The possession order was of a kind which the County Court unquestionably had jurisdiction to make. If the district judge had overlooked the statutory restrictions in sections 65(1) and 127(3) of the Consumer Credit Act 1974, that would have been an error of law, not an absence of jurisdiction in the relevant sense.
2. The decision in Munks v Munks [1985] FLR 576 established a limited class of case in which an order made without jurisdiction could be set aside ex debito justitiae without an appeal. That class concerned the absence of a fundamental statutory precondition to the court making any order at all. The present case was different. The alleged defect concerned whether statutory conditions for enforcing a particular agreement had been satisfied.
3. The words “the court shall not make” in section 127(3) were not determinative. The issues under sections 65(1) and 127(3) required legal and factual determination by the court. They did not convert an ordinary possession order into a jurisdictional nullity.
4. The proposed set-aside power would have no apparent procedural limits. It could permit challenges years later, including after consent, and would undermine the court’s control of litigation. Appeal, subject to the ordinary rules and any extension of time, was the appropriate route. The possibility of raising irredeemable unenforceability before execution of a warrant did not alter the proper treatment of the original order.
5. The judge expressed no concluded view on whether the County Court possessed an independent power to set aside its own judgments ex debito justitiae under section 76 of the County Courts Act 1984 or CPR 3.1(7), because that issue was unnecessary to the result.
6. The defendant was directed to lodge an application for permission to appeal, together with an application for an extension of time, so that the application and substantive appeal could, if appropriate, be heard together. The costs of the present hearing were remitted to the judge dealing with that application.

• Leicester County Court: A possession order was made on 29 November 2005. An application to set it aside was struck out on 30 January 2006, and an application to rescind that order was refused on 30 March 2006.
• High Court (Queen’s Bench Division): The appeal against those decisions was dismissed. Directions were given for a prospective appeal under CPR Part 52.