Woodeson & Anor v Credit Suisse (UK) Ltd

This appeal concerned summary judgment in a mis-selling claim arising from a Swiss franc mortgage. The Court of Appeal upheld the judge's approach that most of the claimants' asserted causes of action (negligence and breach of statutory duty) were time-barred unless the running of limitation was postponed under section 32 of the Limitation Act 1980, while the deceit claim might be postponed until disclosure of internal bank documents in December 2014.

The court held that declarations seeking to establish liability for debt or damages are governed by limitation in the same way as substantive causes of action and cannot evade limitation by being framed as declaratory or equitable pleas. The court also confirmed that established authorities in the "Spencer Day" line prevent a mortgagor from using an unliquidated cross-claim to prevent a mortgagee enforcing its security; accordingly questions about contractual "no set-off" clauses and the Interfoto principle did not alter that outcome in the factual matrix before the court.

Background and parties: Mr and Mrs Woodeson obtained a large Swiss franc revolving mortgage facility from Credit Suisse in 2007–2008 and used surplus proceeds in a carry-trade. Adverse exchange rate movements and falling interest rates left them unable to repay; the bank appointed receivers and obtained possession. The Woodesons issued proceedings alleging negligent advice, breach of statutory duty (including reference to section 138D FSMA 2000) and deceit arising from bank employee conduct and internal documentation.

Procedural posture: The appeal was from HHJ Havelock-Allan QC (Mercantile Court, Bristol) whose summary judgment decision left open a deceit claim but struck out or limited other remedies as time-barred or constrained by contract. The Court of Appeal heard the appellants' challenge and dismissed the appeal.

Relief sought and issues:

• Relief sought included declarations entitling the claimants to an equitable set-off against sums due under the mortgage, and damages for negligence, breach of statutory duty and deceit.
• Key issues for the court were (i) whether the declaratory and equitable relief sought was time-barred under limitation principles or saved by section 32 Limitation Act 1980, (ii) whether deliberate concealment could postpone accrual, and (iii) whether contractual "no set-off" clauses or the Interfoto principle prevented the bank relying on its contract to defeat set-off.

Court's reasoning:

• The court endorsed the view that declarations which are in substance claims for debt or damages cannot be used to evade statutory limitation periods; the basis of the claim (here tort and statutory causes of action) attracts the ordinary six-year limitation period unless section 32 applies.
• On concealment and section 32, the court accepted the judge's conclusion that documents disclosed in December 2014 might found a postponed accrual for a deceit claim (because the internal documents could be essential to establish a prima facie deceit cause of action), but that the same documents were not essential to negligent or statutory claims whose relevant facts were apparent much earlier.
• On set-off, the court emphasised the established Court of Appeal authority (the Spencer Day line) that a mortgagor cannot prevent enforcement of a mortgage or appropriate sale proceeds by asserting an unliquidated cross-claim; therefore, even absent a contractual anti-set-off clause, the mortgagee may enforce without giving credit for such a cross-claim unless a personal claim is brought by the mortgagee in which case set-off might be pleaded.
• The court distinguished Interfoto as inapplicable: the ticket/onerous-terms principle does not assist where contractual documentation was signed and where the clause in question is not of the particularly onerous or unusual character that Interfoto addressed.

Outcome: The Court of Appeal dismissed the appeal, upheld the judge's order and refused a stay; permission to appeal to the Supreme Court was refused.

Appeal dismissed. The Court of Appeal agreed with the judge that declarations and equitable set-off claims founded on negligence or statutory breach were, in substance, claims for damages/debt and therefore subject to ordinary limitation periods; only the deceit claim might be postponed by section 32 until disclosure of internal documents in December 2014. The court also confirmed the binding line of authority that a mortgagor cannot prevent a mortgagee from enforcing its security by asserting an unliquidated cross-claim for damages, and found Interfoto inapplicable to the signed mortgage documentation.

Appeal from HHJ Havelock-Allan QC in the Mercantile Court, Bristol ([2016] EWHC 2775 (QB)). Underlying possession proceedings were brought by the bank in the County Court (High Wycombe); a possession order was made on 29 March 2016 and an appeal in the County Court (Oxford, HHJ Charles Harris QC) was dismissed. Permission to appeal the possession decision to the Court of Appeal was refused on the papers and orally; an application to the Supreme Court for permission to appeal was ultimately refused on 15 May 2018. The present appeal to the Court of Appeal concerned summary judgment issues and was dismissed on 17 May 2018 ([2018] EWCA Civ 1103).