Property – Order for sale – Mental health crisis moratorium – First defendant obtaining damages in nuisance against claimant and order for sale of lease and possession of flat – Claimant applying for declaration that execution of writ of possession null and void – Whether moratorium properly registered – Whether damages being for personal injuries – Whether order for sale prohibited during moratorium – Application granted
A building known as 8 Leysfield Road, London, W12, was a house divided into two maisonettes, formerly owned and occupied by the claimant and the first defendant respectively. They jointly owned the freehold of the building and each had a long lease of their respective flats.
The first defendant brought a claim alleging that the claimant had been guilty of nuisance and harassment and had disturbed the enjoyment of his flat on the upper floor of the building. The first defendant was awarded damages and costs which he subsequently secured by a final charging order over the claimant’s long leasehold interest in the flat.
Ultimately, the first defendant was granted an order for sale of the lease and possession of the flat. He took possession on 13 January 2022. The lease was sold to the second defendant on 10 March 2022. The mortgage over the lease was repaid and the balance of the proceeds of sale passed to the first defendant. The second defendant and her partner then owned the entire building.
The claimant applied for a declaration that execution of the writ of possession was null and void under regulation 7(12) of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England & Wales) Regulations 2020 because a mental health crisis moratorium was in place to protect her at the time of execution; alternatively, execution of the writ of possession was oppressive. The claimant also sought an order permitting her to retake possession of the flat.
Held: The application was granted.
(1) A moratorium was initiated when a debt adviser provided the secretary of state with the information specified in regulation 31(1) of the 2020 Regulations. The crucial information to be registered was the details of the debtor and the date on which the moratorium started (regulation 36(1)). No active decision or step was needed by the secretary of state. Save for the loading of information onto the system by the debt adviser, the whole process, including the generation of notices and emails, was automated. What was contained on the register was a matter of record and should be taken at face value. There was no basis for going behind the register or assuming that the correct procedure and process leading to registration had not been followed.
There was no basis for doubting the accuracy of the registration of moratoria or the dates of their commencement. Nor was there any basis in the 2020 Regulations for concluding that the registration or the moratoria were in some way invalid because the name of the creditor’s solicitor was specified as the owner of the debt instead of the first defendant himself.
(2) For the substantive claim to be exempted from the effect of the moratorium, it had to be a “non-eligible debt” by reason of regulation 5(4)(i) of the 2020 Regulations as a debt consisting of damages for personal injury. For the debt to be “non-eligible”, the whole of the damages had to be in respect of personal injury, otherwise the use of the words “consists of” in that subparagraph would not be given proper effect. The sub-paragraph excluded “any debt which consists of a liability to pay damages… in respect of… personal injury”. The words “consists of” bore a different meaning to the word “includes” which the draftsman of the Regulations could have used instead of or in addition to “consists of”. The natural meaning of the expression was that the liability comprised only a personal injury award, which was not the present case: R (Gate) v Secretary of State for Transport [2013] EWHC 2937 (Admin) and Brown v Commissioner of Police of the Metropolis [2019] EWCA Civ 1724 followed.
Even if it were otherwise possible to conclude that the award of damages included damages for personal injury, the debt would still fall outside the definition of a non-eligible debt because the award giving rise to the debt did not fall entirely within the expression “personal injuries” but merely included an element of that head of damages.
(3) Regulation 7(13) provided that nothing in regulation 7 “affects… (a) a charging order made before the start of the moratorium”. The meaning of that provision, in the context of a regulation which prevented the creditor from taking steps to enforce a judgment debt, was that while the charging order was preserved and remained as security for the underlying debt, the creditor was prevented from enforcing payment of the debt by seeking the remedies which would otherwise be available to an equitable charge. The words “affects… a charging order” were plain and related to the existence or status of the charging order, which would remain unaffected by the existence of a moratorium. There was no justification for stretching those words to mean that the chargee could seek the usual remedies during the moratorium period, in the face of the very specific prohibition in regulation 7(6)(c) preventing a creditor during the period of the moratorium from taking “any enforcement action in respect of a moratorium debt”.
That construction was consistent with the policy underlying the 2020 Regulations which protected the debtor from action during the period of the moratorium but did not deprive the creditor of their rights in respect of the debt, which would become exercisable again when the moratorium ended.
The eviction was enforcement of the judgment debt in breach of the moratorium and the sale was enforcement in breach of the subsequent moratorium on a proper construction of regulation 7.
(4) Regulation 7(12) was unequivocal. The effect of any action taken contrary to regulation 7 “shall be null and void”. Notwithstanding the fact that the sale of the lease had not been completed by registration, the transactional steps taken in the course of the sale (the contract for sale and the transfer), being actions taken to enforce a moratorium debt, were null and void. As between the claimant and the defendants it was as if those actions had never been taken. The claimant was entitled to an order which restored the position to what it was before the eviction and sale took place.
Daniel Clarke (instructed by TV Edwards LLP) appeared for the claimant; Ian Peacock (instructed by Perrin Myddleton, of Harpenden) appeared for the first respondent; The second respondent appeared in person.
Eileen O’Grady, barrister