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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 >> Barclays Bank Plc v Armstrong [2001] EWCA Civ 444 (15 March 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/444.html Cite as: [2001] EWCA Civ 444

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

		Royal Courts of Justice Strand London WC2
		Thursday, 15th March 2001

1. LORD JUSTICE KENNEDY: This is a first defendant's application for permission to appeal out of time from an order of Judge Briggs who, on 28th January 2000, dismissed the first defendant's appeal against the order of District Judge Traynor of 4th November 1999 which had struck out the defence of the first defendant. On 26th February 2000, Judge Briggs refused permission to appeal.
2. The two defendants are, or were, husband and wife. In about 1986 they opened a business account with the Sunderland Branch of Barclays Bank, who are the claimants in this action.
3. THE DEFENDANT: Can I speak to you, my Lord, that is untrue.
4. LORD JUSTICE KENNEDY: You just keep quiet and you can say what you wish in due course.
5. They were then trading as Thompson Park Service Station and, apparently, were indebted to the bank.
6. In 1988, they wanted to refinance the purchase of their home, Supreme House, Hesleden Road, Blackhall and the bank agreed to advance £25,000 and to take a legal charge over the property. The final paragraph on page 2 of the facility letter reads:

"The legal charge over the property and the life policy mortgage will normally be taken on the Bank's standard forms which are designed to secure all liabilities to the Bank. However, the Bank will not without your prior written agreement rely on the legal charge or the life policy mortgage as security for any liability other than that for repayment of the Home Mortgage and interest thereon, any sums expended by the Bank in respect of the property or in preserving or enforcing its security in accordance with the terms of the charge forms, and any debit balance on any cheque account to which you (or any of you) are a party to the extent that such debit balance has been created by interest charged on the Home Mortgage or by the payment of premiums on the approved life policy and the buildings insurance policy."

7. As envisaged by that letter, the charge was worded as an "all monies charge", but it could not then, because of the letter, be enforced as such. Apparently the transfer of the mortgage did not go entirely smoothly and, on 14th October 1988, the bank wrote to apologise. But, for present purposes it seems unlikely that anything turns on that.
8. In March 1989, according to the bank, Mr and Mrs Armstrong sought the assistance of the bank to purchase a fish and chip shop and residential accommodation at Holme Hill Lane, Easington Colliery for which the asking price was £60,000.
9. On 28th March 1989 the bank offered to lend that sum to Mrs Armstrong, that loan to be secured by, first of all a legal charge over the premises to be acquired and, secondly, a side letter in relation to the Supreme House mortgage.
10. Mr and Mrs Armstrong accepted the offer on 4th April 1989 and, on the same day, according to the bank, both Mr and Mrs Armstrong signed a side letter to the bank which is in these terms:

"Supreme House, Hesleden Road, Blackhall Colliery, County Durham

We hereby agree, acknowledge and confirm as follows:-

1. Notwithstanding the terms of the Home Mortgage facility letter dated 21st July 1988, any liabilities from time to time of John William Armstrong and Barbara Armstrong to you, whetherjoint or several and whether in respect of fluctuating overdrafts or otherwise are and will be secured by the legal charge dated 30th August 1988, over the property described above made between John William Armstrong and Barbara Armstrong and Barclays Bank PLC.

2. That in the event of failure to pay any monies due and payable to you in respect of the liabilities referred to in clause 1 above you will, in addition to your other legal rights, have the right to demand repayment of the Home Mortgage in full with immediate effect."

11. On the face of it, the legal charge in respect of Supreme House became what its wording had originally indicated namely an "all monies charge".
12. The bank opened a business loan account with a starting debit of £60,000 plus fees. The bank's information cards show that between 1989 and 1993 there was regular contact between the bank, the manager of which was Mr Harle and both Mr and Mrs Armstrong.
13. For present purposes, it is wholly unnecessary for me to dwell on the accuracy of what appears in the information cards but, for example, the bank asserts that by 5th July 1991, they, that is to say the Armstrongs, were indebted to the bank to the extent of £110,390. The details can be seen set out at page 133 of the bundle which is before me.
14. Eventually, after the sale of the fish and chip shop and the payment of the proceeds of that sale into the account, there was by 1998 a debit in excess of £28,000. On 11th August 1998 the bank wrote to Mrs Armstrong to demand payment of that sum, then standing at £28,530.94.
15. On 12th August, the following day, the bank wrote to Mr Armstrong advising him of the formal demand made upon his wife and advising him that her liabilities were secured by the charge over Supreme House. It is not clear from the papers before me whether there was any reply to that letter.
16. On 12th November 1998, the bank commenced proceedings against both defendants, seeking payment of the money outstanding and/or possession of Supreme House. Mr Armstrong's defence asserted, in effect, that there had been a mistake and that the all monies charge related only to the house as, indeed, it originally had done. The bank by their reply, drew attention to the side letter of 3rd April 1989.
17. On 25th January 1999, Mr Horton, the solicitor for the bank in the statement which he prepared, accepted that the outstanding balance was £29,533.64 in respect of the loan account of Mrs Armstrong, trading as Supreme Chippy, but pointed out that both the loan agreement and the side letter of 3rd April 1989 were, on the face of them, signed not only by Mrs Armstrong but also by Mr Armstrong. By then, that is to say by January 1989, the bank's position was entirely clear. It had probably been clear since August 1998, but another three months did go by before, on 27th April 1999, Mr Armstrong filed an affidavit in which he asserted, first of all, that he knew nothing of his wife's business account and, secondly, that he did not sign the loan agreement.
18. He did not specifically refer in the affidavit to the side letter, but by inference he was saying he did not sign the side letter either. That is, as I understand it, from what he said to me this afternoon, still the critical point so far as is he concerned.
19. On 12th July 1999 Mr Pye, of the bank's solicitors, made a witness statement in support of an application to strike out the defences served by both defendants. In that statement he set out the history and produced the bank's information cards for the period to which I have already referred. If those cards are accurate, they do show the bank in regular contact with both Mr and Mrs Armstrong.
20. On 13th July 1999, the bank applied to strike out the defences of both defendants. The matter came before Deputy District Judge King on 18th August 1999 at Hartlepool County Court when he ordered that within 21 days, Mr Armstrong file and serve a witness statement setting out his position, in particular in relation to the side letter of 3rd April 1989. Mr Armstrong did file such a witness statement on 2nd September 1999 and it reads in part thus:

"I, John William Armstrong, strongly deny any knowledge of this letter dated 3rd April 1989. I also deny ever signing my signature to any legal charges relating to this letter and its contents."

21. The matter then came back before District Judge Traynor on 4th November 1999 when the defence of Mr Armstrong was struck out. District Judge Traynor's note of judgment shows that he asked himself if there was any realistic likelihood or prospect of Mr Armstrong successfully defending the proceedings. He noted that Mr Armstrong denied all of the meetings recorded in the bank's information cards and the two vital signatures. The bank's case was found by the District Judge to be, in his words, the "clearest of cases" and he found that Mr Armstrong did sign the documents relied on.
22. Mr Armstong appealed against the District Judge's order and so the case came before Judge Briggs on 28th January 2000. The judge asked himself if the decision was one which no reasonable district judge could have made. In fact, the judge was to some extent mislead by the solicitor then representing the bank who suggested that the original charge was worded, as it was, as an "all monies charge" and that, therefore, the side letter did not matter. That of course was not the case because, although the original charge had been worded as an "all monies charge", until the side letter came into existence it had in fact been restricted in its ambit in the way that I have indicated.
23. The judge in the event upheld the district judge. He found that Mr Armstong's chances of successfully contesting the matter at full trial were, as he put it, minimal in the extreme and, as I have already said, he refused permission to appeal.
24. In March 2000 Mr Armstong instructed solicitors and, on 18th July 2000, grounds of appeal were submitted which included an application for permission to appeal out of time.
25. There had been, according to Mr Armstong (and he repeated this this afternoon) difficulties so far as he was concerned in getting anyone adequately to represent him.
26. So far as time was concerned, any Appellant's notice should have been served within 14 days. In fact, in this case, it was not served for over three months. In that situation, in this Court, it is appropriate to look first at the period of delay which was significant, secondly, at the reason for that period of delay which, I am afraid, on the face of it is not impressive and, thirdly, at the prospects of success.
27. It is also necessary to bear in mind the Civil Procedure Rules Part 52.13 which show that, where there is an appeal such as this, a second tier appeal, permission to appeal should only be granted, as I said to Mr Armstrong earlier, if it is possible to identify an important point of principle or some other compelling reason for granting permission.
28. Here, on any view, the primary issues were issues of fact. Did Mr Armstrong sign the side letter and/or the loan agreement? Did he have the contacts with the bank which the information cards suggest?
29. On his behalf, counsel who originally drafted a skeleton for the assistance of this Court pointed to the fact that Mr Armstrong's position has been consistent since he disclosed it in the way that I indicated earlier. Secondly, he pointed to the fact that the business which benefited as a result of the existence of the side letter and the loan agreement was a business in Mrs Armstrong's name. He also pointed to the fact that Mr Harle, who was the bank manager concerned, had not made a statement in his own name and there is no such statement on the file. Further, there is not forthcoming, at any rate from the bank's side, any expert evidence to verify its claim that the documentation which matters, the loan agreement and the side letter, were signed by Mr Armstrong.
30. All of those are points which can properly be made but, nevertheless, it is appropriate for this Court to look at the matter in the round and at the realities. It is, after all, not very likely that a bank in the position of this bank would have been prepared to advance money in the way that the bank did with security other than that which it claims that it obtained. Furthermore, if this matter proceeds or is allowed to proceed, very significant additional costs will now have to be incurred which, on the face of it, the bank is very unlikely to recover if it is successful. Both the district judge and Judge Briggs took the view that Mr Armstong's chances of success were very slender indeed. They might have been persuaded otherwise if Mr Armstong had been able to produce expert evidence to show that the signatures on the two contested documents were indeed not his, but no such evidence has ever been forthcoming at any level.
31. I have to have regard also to the overriding objective of the Civil Procedure Rules to deal with cases justly. Bearing all of those matters in mind and having regard, in particular, to that part of the Civil Procedure Rules to which I have referred, I am afraid I am bound to come to the conclusion that here there is no important point of principle to be discerned, no other compelling reason for granting permission to appeal and that, so far as these proceedings are concerned, Mr Armstong will now have to regard them as at an end.
32. I am happy to hear that he does now have a solicitor who is acting for him in connection with other problems which he has had with the bank. He is clearly in a situation in which he needs to have the benefit of some assistance and I trust that one way or another the problems can relatively speedily be resolved, but I am afraid they will not be resolved by an appeal in this action to the Court of Appeal.