Royal Bank of Scotland Plc v Luwum

Permission to appeal may be granted where the first-instance assessment of conflicting evidence is arguably unsafe, even though the prospects of success are not strong. This is particularly so where undue weight may have been given to the absence of institutional records and the principal witness was unavailable for cross-examination. The grant of permission preserves the opportunity to challenge whether a clear agreement or undertaking affected enforcement of a secured debt; it does not determine that issue on its merits.

Royal Bank of Scotland Plc obtained an order for possession of premises secured by a legal mortgage after Mr Luwum exceeded his overdraft facility. Mr Luwum alleged that a bank employee had agreed that enforcement would be postponed if he reduced the overdraft within three months.

The county court accepted that a conversation had taken place but found no clear undertaking to withdraw or suspend the bank’s enforcement rights. Mr Luwum applied again to the Court of Appeal for permission to appeal, arguing that the judge should have accepted his account, particularly because the bank’s principal witness had not attended for cross-examination.

1. Disposition. The renewed application for permission to appeal was granted.
2. County court findings. The county court had ordered possession after finding that the bank was entitled to demand repayment when the overdraft limit was exceeded. Although it accepted that Mr Luwum had spoken to someone at the bank, it found that the evidence did not establish any agreement to withdraw the demand or waive the bank’s mortgage rights, even temporarily.
3. Arguable evidential challenge. The Court of Appeal considered it arguable that the judge ought to have accepted Mr Luwum’s specific account of the conversation. The judge might have been swayed by the absence of records held by the bank, despite the fact that the bank’s principal witness did not attend to give evidence and could not be cross-examined. The evidential issue was sufficiently arguable to justify an appeal.
4. Permission threshold. The prospects of success were not considered strong, but Mr Luwum should nevertheless have the opportunity to argue his case before the appellate court. The order was therefore: application granted.

• Nottingham County Court: His Honour Judge Inglis ordered Mr Luwum to give possession of the premises to Royal Bank of Scotland Plc.
• Court of Appeal (Civil Division): On a renewed application, permission to appeal was granted.