Cheval Bridging Finance Ltd v Bhasin & Anor

When possession proceedings are to be adjourned or stayed pending related litigation, the relevant question is whether there is a real prospect that the mortgage debt will be discharged within a short or reasonable period from the proceeds of that litigation. The same practical consideration may arise under section 36 of the Administration of Justice Act 1970, CPR 3.1 and the inherent jurisdiction. A person deriving title from the original mortgagor may fall within the statutory definition of mortgagor. The appeal was dismissed because repayment from the related claim remained a very remote prospect.

Mrs Bhasin appealed from a possession order made by Brentford County Court in mortgage enforcement proceedings brought by Cheval Bridging Finance Ltd. His Honour Judge Edwards refused an adjournment and stay, including time to assemble evidence for relief under section 36 of the Administration of Justice Act 1970.

The Court of Appeal granted permission on whether the court could await the outcome of Mrs Bhasin’s separate claim against Mr and Mrs Hastings, and whether she was a mortgagor for section 36 purposes. Before the substantive appeal, that separate claim had been tried and judgment given for Mrs Bhasin, but an ordered interim payment had not been made. The central questions were therefore whether any stay remained practical and whether Mrs Bhasin had standing under section 36.

Lord Justice Lawrence Collins delivered the judgment, with which Lord Justices Wilson and Longmore agreed. The appeal was dismissed.

1. Stay or adjournment. The issue whether possession proceedings should await the trial of Mrs Bhasin’s separate claim had become academic. That claim had already been tried, judgment had been given for Mrs Bhasin, and the Hastings had failed to make the ordered interim payment of £140,000.
2. The court observed that, if the issue had remained live, the true question would have concerned the inherent jurisdiction, which had traditionally been considered as an alternative basis for a stay alongside CPR 3.1. In any event, the same practical consideration would govern an application under section 36, CPR 3.1 or the inherent jurisdiction: whether there was a real prospect that the mortgage debt could be discharged within a short period from the proceeds of the separate action.
3. That prospect was very remote. Mr Hastings had not paid the interim sum and had used available resources to pay Cheval in order to resist enforcement of charging orders. The refusal to adjourn or stay was therefore not displaced.
4. Mortgagor. Section 39(1) provides that mortgagor includes a person deriving title under the original mortgagor. Cheval’s concession that Mrs Bhasin could fall within that description was at least arguable on her case that the transfer to the Hastings created a beneficial interest held on trust for her. The court saw no reason to go behind the concession, particularly as the point was not a ground on which she relied or could rely.

The formal order was: appeal dismissed. The court expressed hope that an accommodation might enable Mrs Bhasin to retain her home.

1. Court of Appeal (Civil Division) The appeal was dismissed on the two issues for which permission had been granted: [2008] EWCA Civ 1613.
2. Court of Appeal (Civil Division) On 11 April 2008, Mummery and Arden LJJ refused permission on the original grounds, dismissed the application to adduce further evidence, but granted permission on the two issues later determined.
3. Brentford County Court His Honour Judge Edwards ordered Mrs Bhasin to give possession and refused an adjournment and stay. Judgment was handed down on 17 December 2007.