SANGAMNEHERI v THE CO-OPERATIVE BANK PLC

A claimant cannot use fresh proceedings to re-argue matters determined in earlier possession proceedings after the available appeal routes have been exhausted. The doctrines of issue estoppel, merger and the rule in Henderson v Henderson may bar new points which could and should have been raised earlier. A claim is also liable to be struck out or summarily dismissed where it has no realistic prospect of success. The exceptional-hardship restrictions in section 89 of the Housing Act 1980 do not apply to an order made in an action by a mortgagee for possession. Estoppel is a defence, not an independent cause of action.

The claimant brought proceedings against the defendant mortgagee after possession of the mortgaged property had been obtained under an earlier County Court possession order. He sought, among other relief, to set aside the possession and money orders, restrain enforcement, and obtain declarations concerning expiry and enforceability of the mortgage.

The defendant applied under CPR 3.4(2) and CPR Part 24, contending that the claim disclosed no reasonable grounds, had no real prospect of success, and was barred by res judicata. The central issues were whether the claimant’s arguments concerning hardship, limitation, estoppel, later assurances and alleged lease breaches could be pursued in fresh proceedings.

1. Application granted; claim struck out. The court held that the claim was bound to fail and disclosed no reasonable grounds. The summary-judgment question was whether it had a realistic rather than fanciful prospect of success.
2. Section 89 of the Housing Act 1980 did not assist the claimant. Section 89(2)(a) excludes the restrictions in section 89(1) where the possession order is made in an action by a mortgagee for possession. Exceptional hardship therefore could not provide a basis for relief.
3. The proposed limitation argument was untenable. Under section 15(1) of the Limitation Act 1980, the relevant period was 12 years from accrual of the right of action. The right accrued on default following expiry of the mortgage term, and the possession proceedings were brought within that period.
4. Estoppel could not found the fresh claim. It is a defence, not a cause of action, and could not be used to unsettle a right to possession already adjudicated upon. Alleged assurances in a later letter did not provide an arguable means of doing so.
5. The alleged lease breaches could not interfere with enforcement of the possession order. Any distinct claim arising from the lease relationship would have to be brought separately, and the claimant’s standing was in any event unclear.
6. The claim was independently barred by res judicata. The parties and subject matter were the same. Matters concerning variation and expiry of the mortgage had already been raised or could have been raised in the possession proceedings. The claim was therefore barred by issue estoppel under Arnold v National Westminster Bank plc, and the cause of action had merged in the earlier judgment. The rule in Henderson v Henderson, as explained in Johnson v Gore Wood & Co, prevented the claimant avoiding that result by advancing a new point which could and should have been raised earlier.

The judgment is a first-instance decision on the defendant’s strike-out and summary-judgment application. The judgment records that an earlier County Court possession order was unsuccessfully challenged by applications for permission to appeal and judicial review.