Close Brothers Limited v Rooster Trucking Company Limited & Ors.

A court may refuse to stay enforcement of a final charging order where the judgment it secures remains in force and the applicant has not issued a fresh claim to set it aside for fraud, or even provided a properly particularised draft pleading. That procedural omission may itself justify refusal.

The court may also examine the proposed fraud challenge. A stay can be refused where the evidence does not disclose a strong case or a reasonable prospect of setting aside the judgment. The appeal was dismissed.

Close Brothers obtained default judgment against Mr David Taylor in respect of an alleged personal guarantee. A final charging order was subsequently made over his home. Mr Taylor applied for a stay of enforcement, relying on further witness and handwriting evidence and proposing a claim that the guarantee had been forged.

His Honour Judge Cawson KC dismissed the application in [2022] EWHC 2245 (Ch). Permission to appeal was limited to whether the further evidence provided a better basis for alleging fraud. The central issue was whether enforcement should be stayed pending a proposed challenge to the judgment.

1. Appeal and further evidence. The appeal was dismissed. The application for permission to rely on further evidence was also dismissed because the evidence did not relate to the only ground of appeal for which permission had been granted.
2. Absence of a properly constituted challenge. The Judge was entitled, in the exercise of his discretion, to refuse a stay. The default judgment remained in force, the application to set it aside had been dismissed, and permission to appeal had been refused. By the hearing of the stay application, Mr Taylor had issued neither a new claim to set aside the judgment for fraud nor a properly particularised draft statement of case. That was independently sufficient to dispose of the appeal.
3. Merits of the proposed fraud claim. It was also appropriate to consider the Judge’s alternative conclusion that the evidence did not demonstrate a strong case or a reasonable prospect of success. The evidence was undermined by the commercial context, the preparation of guarantees for signature, Mr Taylor’s changing account, the absence of contemporaneous allegations of forgery, limitations in the handwriting evidence, and contrary expert evidence.
4. The judgment records the fraud principles referred to by the Judge from Takhar v Gracefield Developments Ltd [2019] UKSC 13, [2020] AC 450, and Royal Bank of Scotland plc v Highland Financial Partners lp [2013] EWCA Civ 328, [2013] 1 CLC 596. The Court of Appeal did not need to determine the Judge’s first reason concerning the effect of better evidence after earlier adjudication.
5. The dismissal of the application to stay enforcement was upheld.

• Court of Appeal (Civil Division): Appeal dismissed and application for further evidence dismissed: [2023] EWCA Civ 533.
• High Court: His Honour Judge Cawson KC dismissed the application to stay enforcement of the final charging order: [2022] EWHC 2245 (Ch).
• Earlier proceedings: District Judge Richmond dismissed the application to set aside the default judgments. Fancourt J later refused permission to appeal and lifted an earlier stay.