Halifax Plc v Okin

Under section 36 of the Administration of Justice Act 1970, a court must be satisfied that a mortgagor is likely, within a reasonable period, to pay the sums due under the mortgage. The assessment may consider the mortgagor’s payment history, employment and ability to meet both current instalments and arrears. A flexible approach may allow arrears to be spread over the remaining mortgage term, but the required likelihood of payment remains essential. Where an appellant fails to attend and has not sought an adjournment, the court may refuse applications to adduce further evidence and dismiss the appeal.

Miss Okin appealed against an order of His Honour Judge Barnet QC in the Basildon County Court dated 15 August 2006. That order followed District Judge Collier’s refusal on 14 August 2006 to stay execution of a warrant of possession in mortgage possession proceedings.

Permission to appeal was granted by Moore-Bick LJ. Miss Okin sought to rely on further evidence concerning her employment and financial position. Neither party attended the Court of Appeal. The central issues were whether the further evidence should be admitted and whether the possession process should be stayed under section 36 of the Administration of Justice Act 1970.

Disposition. Lord Justice Lloyd dismissed both applications to rely on further evidence and dismissed the appeal because Miss Okin had not attended, had not contacted the court and had not sought an adjournment. Lady Justice Smith agreed.

1. Further evidence. The respondent’s submission that the further evidence was irrelevant to the appeal was accepted as likely correct. The evidence could instead support a fresh application in the county court. If the appeal had been considered on its merits, however, the Court of Appeal would probably have considered the evidence about employment, finances and payment history.
2. Section 36. The statutory power depends on the court being satisfied that the mortgagor is likely, within a reasonable period, to pay the sums due under the mortgage. The criterion concerns future ability, assessed against the evidence available.
3. Payment history and evidence. The past record of payment was a proper basis for assessing ability to make future payments. On the evidence before the district judge and circuit judge, there was no likelihood that the arrears and instalments could be paid within a reasonable time. The later evidence showed continuing employment but payments that did not maintain the mortgage instalments or reduce the arrears sufficiently. The arrears had increased substantially.
4. Mortgage arrears. Even applying the relatively relaxed approach associated with Cheltenham and Gloucester Building Society v Norgan, under which arrears may be spread over the remaining life of the mortgage, Miss Okin would have faced substantial difficulty in establishing the necessary likelihood of payment. This assessment was expressly offered only as an indication in case the matter had to be reconsidered; the merits were not finally determined.

The formal order was: applications refused and appeal dismissed.

• Court of Appeal (Civil Division): permission having been granted by Moore-Bick LJ, dismissed the appeal and refused both applications to adduce further evidence.
• Basildon County Court, His Honour Judge Barnet QC: on 15 August 2006 dismissed Miss Okin’s appeal from the refusal to stay execution of the possession warrant.
• Basildon County Court, District Judge Collier: on 14 August 2006 refused the application to stay execution of the warrant of possession.