Bluestone Mortgages Limited v Emma Louise Stoute & Anor

Where a judgment or order concerns both moratorium debt and non-moratorium debt, enforcement may still constitute enforcement action in respect of moratorium debt. Likewise, security securing both types of debt may be security held in respect of moratorium debt.

The expressions regarding and in respect of must be interpreted in their statutory context. A possession order obtained because of arrears relates to those arrears, even if it also concerns a larger non-moratorium debt. Security over a single asset is practically indivisible. Enforcement therefore requires the court’s permission under regulation 7(2)(b) of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

A mortgage lender appealed against an order of HHJ Parker in the County Court at Medway dated 26 March 2024. The underlying possession order and judgment debt arose from mortgage arrears, but only the arrears constituted moratorium debt under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

The central issue was whether the lender required permission to enforce a possession order and mixed security where the judgment and security related partly to moratorium debt and partly to non-moratorium debt. Although the moratorium had subsequently been cancelled, the court considered the appeal because the issue was likely to recur.

1. Appeal dismissed. The lender required the court’s permission before enforcing the possession order.
2. Regulation 7(7)(b) applied because the possession order was an order “regarding” moratorium debt. The order had been obtained on the ground that mortgage arrears existed. The expression was not confined to a money judgment expressly limited to the moratorium debt.
3. Regulation 7(7)(c) also applied. A single asset charged in respect of both moratorium and non-moratorium debt was security held in respect of moratorium debt. The security was indivisible in practical terms: possession and sale would enforce the security as a whole.
4. The expressions “regarding” and “in respect of” had to be read in the context of regulation 7 and the Regulations as a whole. A narrow construction would give the creditor an automatic right to obtain possession and sell the debtor’s home while the debtor was receiving mental health crisis treatment, without court oversight of the effect on the debtor.
5. The existence of categories of non-eligible debt under regulation 5(4) did not require a different interpretation. Those provisions could still have practical effects, including in relation to fees, penalties and charges accruing during the moratorium.
6. The court declined to treat the appeal as academic. The issue was capable of recurring and was not peculiar to the parties. D2’s application to adjourn was refused because the relevant materials had been served months earlier and the application appeared intended to cause delay.
7. Any further appeal would be a second appeal requiring permission from the Court of Appeal.

• Chancery Appeals, High Court: The appeal from the order of HHJ Parker dated 26 March 2024 was dismissed.
• County Court at Medway: HHJ Parker held that enforcement of the possession order required permission under regulation 7(2)(b), notwithstanding that only the arrears constituted moratorium debt.