Oyekoya v Business Mortgage Finance 4 PLC & Ors

A stranger cannot unilaterally appoint himself trustee merely by relying on contractual wording that gives an appointed or assuming trustee the rights and powers of a trustee. A High Court judge will ordinarily follow another High Court decision on a point of law unless it is plainly wrong. A claimant who is not a trustee cannot rely on trustee status or an associated power of attorney to bring claims for the relevant parties. Claims lacking reasonable grounds or any real prospect of success may be struck out, and proceedings discontinued in circumstances demonstrating their lack of merit may attract indemnity costs.

The court considered applications concerning five connected claims involving securitisation companies, their servicer, and individuals purporting to act as trustees, directors or attorneys. The claimants did not attend or were not represented, although the court found that they had proper notice.

The applications sought transfer of the claims to the Financial List, strike-out of four extant claims, and costs following discontinuance of another. The central issues were the construction of a deed of charge, the claimants’ standing, the validity of purported director appointments, and whether the claims had any reasonable grounds or real prospect of success.

1. Transfer and discontinuance. The five connected claims were suitable for case management together in the Financial List. The notice discontinuing the Target 1 claim was effective. The notice concerning the original Financial List claim had not been served and was therefore ineffective under CPR Rule 38.3(1)(b).
2. Construction of the deed of charge. Clause 21.2 did not permit a stranger to the trusts to declare unilaterally that he had assumed the position of trustee and thereby obtain the trustee’s powers, rights and benefits. The court followed the earlier High Court decision on the same construction, which was not plainly wrong, and independently considered that construction correct.
3. Standing. Since the claimant was not a trustee, he could not rely on the deed’s appointment of the trustee as attorney for the issuers. The Target 2 claim therefore disclosed no proper authority to sue and had no real prospect of success.
4. Directors’ claim. The purported appointments under article 70 of the articles of association could not be effective because that provision permitted appointment by ordinary resolution of the shareholders, whereas the relevant resolution was made by noteholders. The purported board minutes consequently could not remove the existing directors.
5. Committal and strike-out. The allegation that the witness evidence concerning the directors was false had no proper evidential basis. The four extant claims were struck out under CPR 3.4(2)(a) and certified as totally without merit. The court declined at that stage to make a civil restraint order against one claimant, but warned of the risk of such an order if similar applications continued.
6. Costs. The costs of the discontinued Target 1 claim were ordered to be assessed on the indemnity basis under CPR Rule 38.5(3).

This was a first-instance decision. The judgment records earlier related proceedings, including an earlier High Court decision on the construction of the deed of charge, but no appeal from the present decision.