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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Birmingham Midshires Building Society v Foden [2001] EWCA Civ 29 (15 January 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/29.html Cite as: [2001] EWCA Civ 29

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM PLYMOUTH COUNTY COURT
(HIS HONOUR JUDGE OVEREND)

		Royal Courts of Justice Strand London WC2 Monday, 15th January 2001

Monday, 15th January 2001

1. LORD JUSTICE WARD: This is a renewed application for permission to appeal the order made by His Honour Judge Overend in the Plymouth County Court on 22nd March 2000 when he ordered that Mrs Foden, the applicant, give possession of a property called Clevedon in Plymouth to the claimant Birmingham Midshires Building Society ("the Building Society") and adjudged that she pay the Building Society £96,248.30, the amount currently outstanding under the mortgage.
2. I heard this matter in September when Mrs Foden appeared without notice to the Building Society, but adjourned it in order that the Building Society could be present while she addressed arguments that had not been perhaps at the forefront of the matter before the Court.
3. Being an application for permission only, this is not going to be a long or detailed judgment. I shall endeavour to summarise, I hope accurately, the nub of the difficulty. Mrs Foden's father was the owner of a property called Glen View. I think through his illness the family needed to rearrange the accommodation of Mr and Mrs Thomas, the applicant's parents. So the idea originally may have been for Mr and Mrs Thomas to transfer Glen View to her and she would acquire the property Clevedon, which was a bungalow, in which they could more conveniently live.
4. In early exchanges with the Building Society there were references in the correspondence to Mr and Mrs Thomas joining in with Mrs Foden in the proposed mortgage she was applying for, for the purchase of Clevedon. The letter is dated 25th November 1983 and the Building Society write that:

"... it may be necessary for your Parents to join in with you in the mortgage,..."

5. In fact what happened was that Mr Thomas, the Building Society and Mrs Foden incontrovertibly agreed, on the face of the documents, that the father would charge his property, Glen View, by way of collateral security. Under that charge it was provided, among other things, quite clearly that the principal borrower was Mrs Foden and her property, Clevedon, was to be the property comprised in the legal charge with the Building Society, and that was to be the property primarily liable for the payment of the principal sum and interest lent to Mrs Foden. We see that in paragraph 3(i) of the collateral charge which provides expressly that the proviso:

"... shall not affect the Society or in any way preclude it from enforcing or having recourse to all or any of the remedies or means for recovering payment of such monies [and those are the monies I interpolate due under the main charge of Clevedon] which may be available for such purpose at such time and in such order and manner as it may think fit"

6. Paragraph 3 (iii)(d) makes it plain that the Building Society were at liberty to make any arrangement with the borrower as they saw fit, and that Mr Thomas was regarded as a surety only, and that his property was collateral and secondary security for the main property charged to Clevedon.
7. When these arrangements were taking place, there were negotiations over an extended period of time. The mortgage application seems to have been presented sometime in about November of 1983, as I have indicated, and there was a substantial dispute before the judge as to precisely when the legal charge of Clevedon was granted by Mrs Foden. That was the central issue because the central issue in the case cited by the judge was whether or not that charge, which is in my bundle and which bears the date 24th August 1984, was altered after it had been signed. The material importance of that is that the Building Society was saying that because Mrs Foden was not herself to occupy Clevedon (that being a new home for her parents) there would be a premium on the rate of interest ordinarily repayable at 2 per cent or 2.5 per cent; hence as interest rates varied so the amount of interest was increased. There is no doubt at all that on the actual document the amount of interest and the amount of the monthly repayment was altered and apparently the changes are plainly visible and are not in dispute. The only dispute is when they were made and whether with or without Mrs Foden's notice.
8. On that matter the judge, having heard her evidence and a lot of other evidence, made his conclusions that are contained in his judgment at page 21 where he said:

"It seems to me that it is a straight forward conflict between Mrs Foden's evidence, that the document when she signed it bore the interest rate that was relevant before the beginning of August, or alternatively, the base rate that was in existence after 1 August. She is saying that the loading had been abolished by agreement between her and Mr Wood; there being no documentary evidence to support that proposition."

9. His conclusion is:

"The conclusion that I have come to is that that document is likely to have been signed by Mrs Foden after the notification of the rate change, which was notified on 25 July, and was effective on 1 August.

Although Mrs Bennett was not the most reliable of witnesses, one can hardly blame her for that because her memory was being asked to go back to 1984, and she had not had the opportunity of looking at the documents."

10. He then dealt with difficulties in her evidence but concluded at page 23 C:

"Having seen and observed Mrs Foden, not only over this three day trial but in very many interlocutory applications prior to it, I find it highly unlikely that she would not have written the voluminous and detailed letters of complaint in all directions at the material time had the position been as she contends. ....

The evidence of Miss Dale was that the loading was attributable to the non-residential status of the borrower; and that is evidence which I accept.

I find that it is unlikely that the alterations, which are apparent from inspection, were carried out after it was signed by Mrs Foden....

I find, therefore, that Mrs Foden is probably wrong when she says she signed the document showing an interest of 12.75 per cent. I think, despite her protestations to the contrary, that she signed the document in the form it now is in, with the exception that the date was not then on it; it was added later on completion on 24 August 1984. That interest rate included the loading of 2.5 per cent, which was apparent from inspection of the mortgage rates at the time.

That finding effectively determines the claim in this case."

11. Mrs Foden challenges that finding. She asserts in her protestations to me both written and oral that that is simply not true. In my judgment however it is impossible for her to appeal against that finding which was a finding of fact which the judge made having seen her and seen the other witnesses, and there is no realistic possibility whatever that the Court of Appeal would overturn that principal finding of fact. Like the judge, it seems to me that effectively disposes of the main burden of her case. But I go on to deal with the other complaints.
12. What happened in the history of events is her father died; her mother continued to occupy Clevedon. She wished, of course, to take an assent of the Glen View property in her name from her husband's estate. That needed therefore the release of the collateral charge and the substitution of a fresh charge to be granted by the mother. Her position was undoubtedly equivocal because as we see at page 63 of my bundle she was prepared to undertake to the Building Society on 24th August 19 -- the date is obscure but it must be 1990 -- that:

" ... if the Advance is made I will not assert or maintain against the Society [those words may be important] as Mortgagee of the Property any right interest or claim in equity or by way of overriding interest or otherwise"

13. So as between her and the Building Society she was saying I have no claim, interest, overriding interest or anything in Clevedon.
14. She duly charged the Glen View property on 7th June 1985 on terms not effectively dissimilar from those which bound her deceased husband. In 1990 she was released from that charge by the Building Society. The terms of the release were confirmed (if that is the right verb) by a stamp on the charge in the form of a vacating receipt which reads:

"Birmingham Midshires Building Society hereby acknowledges to have received all monies intended to be secured by the within written deed

IN WITNESS [et cetera] of the blank day of blank."

15. Mrs Foden contends that by that acknowledgment of having received all monies intended to be secured by the charge on Glen View, the Building Society were acknowledging having received all the monies which was charged by the mortgage she granted over her property. It seems to me there are possibly two ways that she puts her case. One depends upon the terms and conditions of her mortgage. They are contained in a schedule of mortgage conditions at page 66 in the bundle which includes condition 15(1):

"The Legal Charge shall be security not only for the moneys primarily provided for by it but also for all moneys which may be or become owing by the Borrower to the Society on any account and no property held by the Society as security for indebtedness of the Borrower shall be released until all moneys owing by the Borrower to the Society have been paid"

16. She contends therefore that the Building Society by having released her mother had released her. That submission would require her to establish at least that she and her mother were jointly and severally liable. That is not the legal position upon the analysis of these transactions. She was the principal debtor; her mother was giving her property as collateral security and the release of that surety does not, in my judgment, amount to a release of the principal debtor.
17. The other way she puts it is that it was worth some form of estoppel. That cannot be if she continued to pay the mortgage until 1992, as the judge recorded in his judgment. Moreover, as the judge correctly identified at page 16 of his judgment, those provisions in those conditions were there for the protection of Mr and Mrs Thomas and for the protection of the Building Society and not for the protection of Mrs Foden.
18. I have looked very carefully at this matter because I am acutely conscious that Mrs Foden's life has been blighted by this litigation. She has been forced one way and another to litigate in the Chancery Division, as I understand it, with her mother, and it may be now that of her mother's estate. She has gone through the divorce courts in matrimonial disputes with her husband. She has been to the County Court and to the Court of Appeal in this case.
19. Essentially what caused her difficulty was that because her mother, despite whatever undertaking she may have given to the Building Society not to assert a charge over Clevedon, for reasons that are not plain to me and which are in fact immaterial for the purposes of this appeal, her mother nonetheless on 27th July effected a charge against Clevedon claiming that:

"That by an agreement made in or about 1984 the estate owner [Mrs Foden] agreed that the chargee [Mrs Thomas, her mother] and her late husband could live in the estate owner's property for the rest of their lives or for so long as they wished. In return it was agreed that during the time the chargee and her late husband lived in the estate owner's property, the estate owner could take the rents from letting the chargee's property. The chargee has resided in the estate owners property since in or about August 1984 and by virtue of the agreement aforesaid and/or the chargee's occupation, the chargee has an interest in the estate owner's property."

20. The effect of that charge was that Mrs Foden was unable freely to dispose of Clevedon, which would have meant applying to take the charge and indeed would have involved litigation with her mother or her late mother's estate. Because of the curb on her freedom to dispose of the property, the property has delapidated appallingly and it is worth a fraction of what it should be. Mrs Foden has lost heavily on the transaction. As she put it to me, out of the kindness of her heart she tried to help her parents, she subsidised their living accommodation to a huge extent at personal cost and she faces as a result of the judge's judgment personal ruin. I am desperately sorry for her but it seems to me impossible to find any vestige of prospects of success for challenging the judgment.
21. The final point of which she makes complaint is that the figures for the arrears are inaccurate. That was a matter of fact for the judge. There was a document handed up to him late in the day. It seems to have passed without any or any substantial challenge. It was a finding of fact once again. It is a matter impossible to reopen in this Court and there could be no possible ground for giving permission to appeal against the money judgment side of this case. I am afraid that Mrs Foden must come to terms with this disaster as she is utterly wrong in my judgment in liberal allegations of dishonesty, falsification of documents, fraud of this sort or of that sort. The sad fact is that a family arrangement and a marriage went grievously wrong and she bears the burden for all of the unhappiness that follows from that. My sympathy does not justify the grant of permission to appeal. Therefore, I dismiss her application.
22. MRS FODEN: During your judgment, you made a point which is totally wrong. You said that I continued to pay the mortgage after the release.
23. LORD JUSTICE WARD: Yes.
24. MRS FODEN: I had no alternative. I was under an order of His Honour Judge Previte that the rents from Glen View were to be paid to the mortgage. That is not the same thing as paying the mortgage. I had to show that all the rents that were coming off Glen View were going to that mortgage. So that is not the same thing as continuing to pay after.
25. LORD JUSTICE WARD: I note what you say, and there will be an addendum to the judgment, and what you say has I hope been recorded by the shorthand writer and it will go at the end of the judgment.
(Application for permission to appeal dismissed; application to appeal to House of Lords refused; no order for costs)