Seculink Limited v David James Terence Forbes

The Debt Respite Scheme Regulations do not make the debt advice provider the exclusive decision-maker on whether a debt is a qualifying debt. A court may determine that legal issue whenever it arises, including in existing proceedings, unless the statutory scheme clearly excludes concurrent jurisdiction. The Regulations’ review and county court procedures provide an additional route for challenging a moratorium, rather than an exclusive route. A pending action relating to a moratorium debt may continue to judgment without permission where continuation falls outside the specified enforcement steps in regulation 7(7). The list of enforcement steps is exhaustive, although some individual steps are broadly expressed.

Seculink Limited appealed from an order of HHJ Baucher dated 2 January 2024 in enforcement proceedings arising from a secured bridging loan and a Tomlin order. Mr Forbes had obtained a mental health crisis moratorium under the Debt Respite Scheme Regulations. Seculink argued that its debt was not a qualifying debt and that the existing proceedings could continue without permission.

The county court held that it lacked jurisdiction to decide whether the debt was a qualifying debt and that permission was required to continue the proceedings. The appeal concerned the exclusivity of the Regulations’ review procedure and the interaction between regulations 7 and 10.

1. Jurisdiction. The appeal was allowed on the jurisdiction issue. The Regulations contain no express provision making regulations 17 and 19 the sole route for determining whether a debt is a qualifying debt. Applying the approach in British Telecommunications plc v IRC, the question was whether Parliament intended the statutory remedy to be exclusive or to coexist with ordinary court proceedings.
2. Regulation 6 defines a moratorium debt as a qualifying debt satisfying additional conditions. A debt that is not qualifying cannot become a moratorium debt merely because a debt advice provider has treated it as qualifying. The proposed implication that regulation 6 referred to a debt identified as qualifying by the debt advice provider would introduce a substantial qualification into clear wording and was rejected.
3. The reference in regulation 17(2)(b) to a moratorium debt not being a qualifying debt is imperfectly expressed, but it can provide a simpler additional route for review. It does not prevent a court from deciding the legal character of a debt in existing proceedings. Requiring parties to proceed first before a debt advice provider and then return to the county court would create unnecessary delay and potentially require legally complex questions to be decided initially by a non-lawyer.
4. The abuse of process argument failed. The statutory procedure was not compulsory, and determining the issue in the existing county court proceedings was not abusive, particularly where the additional debt had been notified during those proceedings. The reasoning in Autologic Holdings plc v IRC did not apply because the Regulations did not provide an exclusive statutory route.
5. The appeal was also allowed on permission to continue. Regulation 7(7) identifies the steps constituting enforcement action. The list is exhaustive. Continuing pending proceedings to judgment is not expressly included, and regulations 7(7)(a) and (c) did not naturally cover that activity. Regulation 10(3) therefore permitted the pending proceedings to continue to judgment without permission.
6. The question whether the debt was qualifying, and any discretion concerning progression of the proceedings, was adjourned for further argument. The appeal on the discretion issue was likewise adjourned.

• High Court, Chancery Appeals List: Appeal from the decision of HHJ Baucher sitting at the Central London County Court dated 2 January 2024. Appeal allowed on jurisdiction and permission to continue proceedings; remaining issues adjourned.