Ivan Kaye v Amanda Lees

A statutory right to apply for a debt moratorium cannot ordinarily be suspended by injunction where the statutory scheme gives the debtor an unfettered right to apply and assigns the primary decision-making function to a debt advice provider. The High Court’s general injunction jurisdiction does not justify creating a different decision-making structure or judicial pre-approval requirement absent statutory authority.

A moratorium must be used consistently with the statutory purposes of debt respite, including developing a realistic plan for repayment of some or all debts. A mental health crisis moratorium requires evidence of treatment for a genuine mental health crisis, not merely ongoing treatment for a mental health condition. The appropriate remedy for an unlawful decision by a debt advice provider may be judicial review.

Mr Ivan Kaye sought to extend an injunction restraining Ms Amanda Lees from applying to a debt advice provider for a breathing space moratorium or mental health crisis moratorium under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

The injunction had been granted after earlier moratoria had affected enforcement of a judgment debt and possession proceedings concerning a leasehold flat. The earlier injunction was due to expire on 31 March 2023. Ms Lees did not attend the hearing.

The central issues were whether the court had power to restrain a debtor from exercising the statutory right to apply for a moratorium and, if so, whether it was proper to do so where a future application might lawfully succeed or might instead be unlawfully granted by a debt advice provider.

1. Application refused. The injunction restraining Ms Lees from applying for a breathing space moratorium or mental health crisis moratorium was not extended.
2. The statutory purposes of a debt respite scheme under the Financial Guidance and Claims Act 2018 must be read together. The scheme provides temporary protection against escalating debt and enforcement so that the debtor can work with advisers towards a realistic repayment plan. It is not intended to provide permanent or semi-permanent protection from creditors.
3. A person applying for a moratorium must take reasonable care to provide accurate information and must not deliberately withhold relevant information. In a mental health crisis moratorium application, the evidence must address whether the debtor is genuinely receiving treatment for a mental health crisis. Ongoing treatment for a long-standing mental health condition will not usually suffice.
4. The requirement that a moratorium be “appropriate” is separate from eligibility. The debt advice provider must consider whether the application is consistent with the statutory purposes, including whether the debtor proposes to use the moratorium to obtain advice and develop a realistic repayment plan. The provider must also determine a creditor’s request to cancel a moratorium on the ground that its continuation unfairly prejudices the creditor’s interests.
5. The High Court has jurisdiction under section 37(1) of the Senior Courts Act 1981 to grant injunctions where just and convenient. However, applying The Siskina [1979] AC 210 and Re G (Court of Protection: Injunction) [2022] 3 WLR 1339, an injunction requires an interest meriting protection and a legal or equitable principle justifying restraint.
6. A creditor has no legitimate interest in enforcing a judgment without facing the possibility that the debtor may lawfully apply for and obtain a moratorium. Granting the injunction would suspend statutory rights and substitute prior judicial approval for the decision-making process Parliament assigned to the debt advice provider. The Regulations contain no power permitting such restraint.
7. Past moratoria may have been granted improperly, but that did not establish that every future application would be unlawful. Any future unlawful decision by a debt advice provider could, at least in principle, be challenged by judicial review. The application to extend the injunction was therefore refused.