Arrears, warrants and abuse of process

A report of a County Court mortgage possession case has reached us, in which the secured lender’s behaviour resulted in a finding of abuse of process. The question was when (an if) an arrears payment had been received.

Blemain Finance Ltd v Andrea Jayne Ridley Darlington County Court 21 June 2012

Ms Ridley was the homeowner, with a mortgage of £44,000 (£39,000 outstanding) from 1999. She took out a further secured loan for £20,000 with Blemain Finance in 2006. She had fallen into arrears on payments and Blemain had obtained a possession order in 2006, then a warrant, which Blemain didn’t enforce on payment of the arrears. When arrears of some £1500 re-occurred, Blemain applied for a warrant of possession. The warrant was due to be executed on 19 June 2012 at 10.30 am.

On receiving the notice, on 15 June, then a telephone call from an agent of Blemain, Ms R’s evidence was that she went on to Blemain’s website on Sunday 17 June 2012 and paid off the outstanding arrears via a debit card, which had sufficient credit on it after a payment from her father. It was her uncontested evidence that the agent had told her on the phone, on 16 June, that once she’d paid on the website the account would ‘be up to date and fine’. The website was listed as a way to pay on Blemain’s letter giving the date of eviction. However, Blemain’s letter made no mention of Ms R’s right to apply to the Court for a stay of eviction at all.

The eviction went ahead on 19 June. Ms R called Blemain with the court bailiff present but was told there was ‘nothing they could do’.

Ms R applied for re-entry and stay of warrant on the same day. The application was heard on 21 June. It turned out that Blemain had returned Ms R’s payment on 20 June.

Blemain opposed the application on the basis that:

no payment had been received from Miss Ridley. [Blemain] acknowledged that Miss Ridley had offered to make an immediate payment of the full arrears but stated that [Belmain's advocate] was not authorised to accept any payment. Blemain Finance denied an abuse of process and stated that arrears were outstanding at the time the eviction took place. Furthermore, Blemain Finance argued that as they had gained possession of the property, the full balance on the mortgage had become due and there were no grounds for the Court to set aside possession.

The District Judge pointed out that this could be done by an order suspending the warrant and for payment fo the arrears.

However, on the evidence, it was clear that the payment by Ms R had been with Blemain before the execution of the warrant and remained with them until 20 June and that Ms R had been told if she made the payment before execution of the warrant, things would be fine.

Despite that, the Claimant was authorised to continue. This led to an abuse of process in this matter. Therefore the warrant is no longer executed, the Defendant is allowed back into he property and the matter will be re-listed to treat as an application to suspend the warrant.

It appears Blemain sought permission to appeal but that was adjourned until the further hearing.

At a further hearing on 25 June, the warrant was suspended and Blemain ordered to pay the costs of Ms R’s application and both hearings. Blemain did not seek permission to appeal.

Naughty Blemain Finance. Very naughty indeed.

Thanks to Diane Hall at Clark Willis for the details of the case.

Posted in FLW case note, Housing law - All, Mortgage possession and tagged , , . RSS feed for this post and comments.

About

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +

One Comment

  1. Sam
    Posted 20/10/2012 at 3:37 pm | link to comment

    Sub prime lenders and thier regard for the law

    the above yet again shows, how the sub-prime lenders who show little or no regard for the law seem to get away with it , if it was not for people like Ms R and her legal representatives (Assumming she had legal representation).

    I personally and most of the my collegues working in the housing law sector come across many Ms Rs’ by this I mean people who fell into arrears on borrowings with terms perhaphs one can describe as not in their best interst.

    Furthermore, specially over the past two years I have come across Such non main stream 2nd and 3rd charge lenders taking possession proceedings (may I add quite rightly) however showing very little regard for what the Mcob,cpr or the substantive property law says, they seem to plough ahead to practically snatch peoples’ homes without the due process.

    Therefore, I believe the legislature and judiciary need to take note of such a common abuse of the law by these lenders who in some sense have brought about the economical clamity we currently suffers from and not to mention still gaining from the fall out of societys misfortunes obviously manifested in the form of the many Ms Rs struggling to make ends meet.

    However one such victory shows legal practitioners should always challenge such tactics employed by lenders such as Blemain as opposed to hoping that they play by the rules which clearly was not the case in Ms Rs case.

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