Copeland v Bank of Scotland Plc

On an application to set aside a possession order made in a party’s absence, CPR 39.3 applies directly where a hearing labelled a disposal hearing is in substance a trial. It applies by analogy where the hearing is not technically a trial, absent unusual and compelling circumstances. The applicant must show promptness, a good reason for absence and a reasonable prospect of success. For the good-reason limb, the less stringent, fact-sensitive approach in Bank of Scotland plc v Pereira applies, rather than the more demanding approach in Levy v Ellis-Carr. An appeal is ordinarily by review, not rehearing. The absence of a real prospect of a different result is independently fatal to an application to set aside.

The appellant challenged a Master’s refusal to set aside a possession order made after she failed to attend a possession hearing concerning arrears under a mortgage over residential property. The hearing had been described as a disposal hearing, although evidence and cross-examination had been directed. The appellant sought an extension of time and permission to appeal, relying on alleged defects in the mortgage, the way the loan funds had been used, fraud, and her asserted unfitness to attend.

The central issues were whether CPR 39.3 governed the application directly or by analogy, whether the appellant had a reasonable prospect of success at a rehearing, whether she had a good reason for non-attendance, and whether the appeal should be heard by way of review or rehearing.

1. Outcome. Time for permission to appeal was extended and permission was granted in the rolled-up hearing. The appeal was dismissed, subject to the provisos that any possession order remained stayed while PD 51Z applied and that time for a second appeal could be extended until the stay ceased.
2. Applicable procedural test. A hearing described as a disposal hearing was in substance a trial because it involved a fuller contested hearing, directed evidence and possible cross-examination. Accordingly, CPR 39.3 applied directly. If it were treated as a disposal hearing, the rule applied by analogy under Hackney LBC v Findlay, absent unusual and highly compelling circumstances. CPR 23.11 was more flexible, but setting aside still ordinarily required a real prospect of a different result.
3. Under CPR 39.3 the applicant had to act promptly, establish a good reason for failing to attend, and show a reasonable prospect of success at trial. The appeal was limited to review under CPR 52.21. No interests-of-justice circumstances required a rehearing, although the court allowed some additional arguments because the appellant was unrepresented.
4. Prospects of success. The appellant had failed to comply with earlier orders permitting an amended defence based on fraud, negligence or equitable set-off. She was therefore confined to requiring proof of the mortgage debt and entitlement to possession. The evidence established two separate loans, the advance secured on 59 Southgate Street, arrears and a valid mortgage deed. The allegations that the bank had retained the relevant money, that the transaction was merely a bridging loan, or that the mortgage was otherwise ineffective had no real prospect of success.
5. The reasoning in Helden v Strathmore Ltd was applied: section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 governs contracts for creating or transferring interests in land, not documents which themselves create or transfer such interests. The mortgage deed therefore did not require a single document containing all terms and signed by both parties. Section 53 of the Law of Property Act 1925 imposed the less onerous writing and signature requirement, which was satisfied.
6. Good reason for absence. The Master had applied the more stringent Levy v Ellis-Carr approach. The correct approach under Bank of Scotland plc v Pereira, endorsed in TBO Investments Ltd v Mohun Smith and Emojevbe v Secretary of State for Transport, was less rigorous and fact-sensitive. Even under that approach, the appellant had not proved a good reason. The medical evidence was retrospective and lacked sufficient detail, and the surrounding evidence indicated a conscious decision not to attend.
7. The lack of a defence with a real or reasonable prospect of success was independently fatal, whether CPR 39.3 applied directly, by analogy, or the application proceeded under CPR 23.11. The Master was not wrong and there was no serious procedural or other irregularity causing injustice.

The judgment describes an appeal from orders made by Master Davison, including the refusal on 1 November 2018 to set aside a possession order made on 6 August 2018. The High Court extended time, granted permission in a rolled-up hearing, and dismissed the appeal.