HNW Lending Limited v Nicole Stacey Ann Lawrence

On a strike-out application, the court may conclude that a pleaded case is unwinnable where the pleaded facts cannot establish a viable defence and continuation would bring no possible benefit. A possession claim may be decided without a full trial where it is not genuinely disputed on grounds appearing substantial. Economic duress requires illegitimate pressure, causation and no practical alternative; undue influence requires an abused relationship of trust and confidence or dependency. A contractual provision expressly conferring enforcement rights on a third party can engage section 1(1)(a) of the Contracts (Rights of Third Parties) Act 1999, even where the enforced obligations benefit a contracting party. A security agent with such rights may enforce the underlying loan obligations and charge.

HNW claimed possession of a residential property and repayment of sums secured by a charge. Ms Lawrence denied being bound by the loan agreement, alleging lack of agreement, forgery, duress, undue influence and misrepresentation. She also disputed HNW’s standing to enforce the loan and charge, relying on the reasoning of HHJ Dight in HNW v Mark, a similar claim involving materially similar documents.

HNW applied to amend its Particulars of Claim and to strike out the Defence and Counterclaim, alternatively seeking summary judgment on the Counterclaim. Ms Lawrence applied to strike out HNW’s claim, for security for costs, disclosure and amendment of her Defence and Counterclaim. The central issues were whether her defences and counterclaim were viable and whether HNW had title to sue under the contractual arrangements and charge.

1. HNW’s applications. Permission was granted to amend the Particulars of Claim by substituting the correctly annotated Loan Agreement and adding alternative relief. Under CPR rule 3.4(2)(a), the relevant question was whether the pleaded case was unwinnable and continuation would provide no possible benefit. The court ordinarily accepts pleaded facts unless contradictory or obviously wrong and does not evaluate evidence as on summary judgment.
2. Ms Lawrence’s case that she was not bound by the Loan Agreement or Further Advances was unwinnable. Her allegations were inconsistent with the contemporaneous documents, her authorisation for her solicitor to proceed, her acceptance of the loan and her later borrowing by reference to the Loan Agreement. Any lack of actual authority would not assist her because her solicitor had ostensible authority and she had ratified the transaction. The allegations of forgery, fraud, duress and undue influence lacked a sustainable factual basis. Economic duress required illegitimate pressure, causation and no practical alternative. Undue influence required an abused relationship of trust and confidence or dependency.
3. The misrepresentation case depended on the Loan Agreement being non-binding and therefore fell away. The allegations of trespass and interference with tenancy contracts were unparticularised and had no realistic prospect of success.
4. HNW’s standing. The court declined to follow HHJ Dight’s analysis in HNW v Mark. Clause 26.7 expressly provided that HNW could take the benefit of and specifically enforce each express and implied term of the Loan Agreement. Section 1(1)(a) of the Contracts (Rights of Third Parties) Act 1999 was not confined to terms purporting to benefit the third party. Alternatively, section 1(1)(b) applied because the clause purported to confer on HNW the benefit of the lender’s covenants and enforcement rights.
5. HNW’s powers under clauses 13.3.5, 14.1 and 26.7 enabled it to enforce the repayment obligations. HNW therefore had title to sue on the Loan Agreement and Charge. Ms Lawrence’s strike-out application was refused.
6. Security for costs was inappropriate because the Defence and Counterclaim were struck out. The unsupported disclosure application was refused. Permission to appeal on HNW’s title to sue was proposed, subject to the parties’ observations, and enforcement was stayed meanwhile.

First-instance judgment. The judgment records no prior appellate decision. Permission to appeal to the Court of Appeal was proposed on HNW’s title to sue, with enforcement stayed pending the appeal.