Debt case law summaries give an overview of important court decisions in breathing space, enforcement, housing debt, and more.
Debt case law summaries
Cases by category
Breathing Space
Breathing space and mental health crisis moratoriums are available under the Debt Respite Scheme Regulations to prevent enforcement of eligible debts.
Axnoller Events Ltd v Brake and another (Costs)
An order for unliquidated costs was a contingent liability and was not a qualifying debt for the purposes of a debt respite mental health crisis moratorium.
Axnoller Events Ltd v Brake (mental health crisis moratorium) (Rev1)
Breathing Space additional debt procedure extended to debts incurred before moratorium but unknown at the time of the moratorium application.
Bluestone Mortgages Ltd v Stoute
Mortgage capital not a qualifying debt in a breathing space moratorium.
Brake and another v Guy and others
The High Court granted a creditor's application for permission to enforce a third party debt order during a mental health crisis moratorium.
The court can refuse to annul a bankruptcy order based on a debt subject to a breathing space moratorium.
The High Court made directions to submit medical evidence for a mental health crisis moratorium following a creditor application to cancel.
IV Fund Limited SAC v Mountain
The High Court cancelled a mental health crisis moratorium on the ground of unfair prejudice due to insufficient medical evidence.
A creditor who paid an outstanding mortgage to comply with a court order was subrogated to the mortgage lender’s right to recover the debt.
Mental health crisis moratorium cancelled as the debtor did not meet the criteria.
The High Court refused to extend an injunction that prevented the debtor applying for a further moratorium under the Debt Respite Scheme Regulations.
Eviction and sale of a debtor's property declared ‘null and void’ under the Debt Respite Scheme.
The County Court granted an injunction to the claimant to prevent joint borrowers of a secured loan from applying for a breathing space moratorium.
The High Court allowed a bankruptcy petition to proceed during a breathing space moratorium.
Consumer credit
The Consumer Credit Act 1974 regulates consumer borrowing like bank loans, credit cards, and hire purchase agreements.
The limitation period in Consumer Credit Act cases started to run after the expiry of the default notice served on the borrower.
Secondary evidence can be sufficient when assessing if a compliant default notice has been created and sent to the debtor.
The judge refused to stay the claimant's claim to allow them to comply with the defendant's request for information under s.78 Consumer Credit Act 1974.
Court procedures
The Civil Procedure Rules and other court rules govern claims, defences, and applications to court.
A claimant can only serve a claim by email with the agreement of the defendant, with no special allowance for litigants in person.
Churchill v Merthyr Tydfil County Borough Council
A court can stay proceedings and order parties to take part in alternative dispute resolution (ADR).
A verbal agreement to transfer land is enforceable in the court through specific performance, and refusal to mediate can impact costs.
Dismissal of a late application to set aside a default judgment under CPR 3.6 after considering the impact of the COVID-19 pandemic.
Courts must apply a three-stage test when dealing with applications under CPR 3.9 for relief from sanctions.
Dusoruth v Orca Finance UK Ltd
Bankruptcy annulment application dismissed despite creditor’s petition based on an unliquidated debt.
FXF v English Karate Federation Ltd & Anor
The three-stage Denton test applies to all applications to set aside a default judgment under CPR 13.3.
The procedure for applying for possession and sale of a bankrupt’s home.
Ince Gordon Dadds LLP v Mellitah Oil and Gas
The High Court refused to exercise its discretion to set aside a default judgment after it held that the Denton principles applied.
A claim form served in a multi occupancy building was not served at the defendant’s usual or last known residence as required by the Civil Procedure Rules.
The creditors’ right to enforce a judgment outweighed the debtor’s offer to pay by instalments when the payments would not clear the debt in a reasonable time.
Madison CF UK (118118 Money) v Various
Failure to give notices of sums in arrears counts as 'exceptional circumstances' to set aside a County Court judgment.
Application to set aside only part of a default judgment resulted in variation of the original order.
Matthew (Appellants) v Sedman (Respondent)
Where a cause of action accrues at, or on the expiry of midnight, the day immediately following should be included in calculating the limitation period.
Notting Hill Finance Ltd v Sheikh
The defendant borrower could still raise new arguments during the appeal against a possession order or in the application to set it aside.
Claimant litigant in person ordered to pay £17,500 costs order on the small claims track for ‘unreasonable behaviour’ following a claim based on dishonesty and fraud.
Stanley v London Borough of Tower Hamlets
Postal service of a claim form on the defendants office during Covid-19 lockdown was a good reason to set aside judgment and grant relief from sanction.
Terry v BCS Corporate Acceptances Ltd and others
The correct approach for dealing with applications to set aside judgments obtained through fraud.
Enforcement
A creditor can enforce a debt by applying for a writ or warrant of control, a charging order, an attachment of earnings, or a third party debt order.
A claimant can pursue a dispute about fees against a High Court Enforcement Officer or its agent.
A creditor can use a third-party debt order to enforce a judgment debt against a debtor's personal pension entitlement.
A judgment creditor can be ordered to pay damages for losses suffered by the debtor as a result of breaches by an enforcement agent when taking control of goods.
Consulting Concepts International Inc v Consumer Protection Association
The cause of action for limitation purposes accrues when the work is done or the services are provided, not when a bill is given.
Just Digital Marketplace v HCEOA
An enforcement agent could make a valid controlled goods agreement with a debtor via video call without physically entering the premises where the goods were located.
A creditor might be able to enforce a judgment debt against a debtor's personal pension, and a court could order payment of the entirety of the pension(s) to be paid to the creditor, not just the tax-free lump sum.
When the court could consider allowing a creditor to enforce a judgment debt against the debtor's pension.
Progressive Property Ventures LLP v Mrozinski
Fees and disbursements of an enforcement agent disallowed as the debtor was vulnerable and should have been given more time to seek advice.
Timson, R (on the application of) v Secretary of State for Work and Pensions
The DWP's 'third party deductions' guidance is unlawful because a decision-maker must give the claimant the opportunity to provide information before a decision is made.
365 Business Finance v Bellagio Hospitality WB
The issue of a first writ of control takes priority over the second writ of control that has been issued.
Housing debt
Mortgage and rent arrears cases, council tax, affordability in local authority homelessness decisions.
Beneficial interest involves financial contributions and common intention, and crystallises when the common intention changes.
DV-W v Cheshire West and Chester Council
A tenant is not liable for council tax for the day their tenancy agreement ends unless they have a material interest in the property.
Tenants with fixed term or contractual periodic tenancies are liable for council tax until the tenancy is formally ended or new occupiers move in.
Royal Borough of Kingston-Upon-Thames v Moss
The landlord council was a water reseller so the tenant was entitled to a refund for overpaid water charges.
Samuels v Birmingham City Council
Reasonable living expenses and the correct approach to assessing affordability in homelessness decisions.
Southern and District Finance v Barnes
The Court of Appeal set out a test to apply when deciding whether to make a time order in response to a mortgage lender's possession claim.
Waller-Edwards v One Savings Bank
A joint mortgage does not automatically put a mortgage lender on notice of undue influence.
Insolvency
Bankruptcy, debt relief orders and individual voluntary arrangements are all forms of personal insolvency.
Addison v London European Securities Ltd
When property is personal to a client made bankrupt and not for the benefit of the bankruptcy estate.
Effects of an income payments agreement on a bankrupt debtor and their estranged wife under the definition of 'family' in the insolvency legislation.
A creditor’s failure to comply with it’s obligations under the Equality Act 2010 be grounds for dismissal of a bankruptcy petition.
A trustee in bankruptcy has no right to compel a bankrupt to draw funds from their pension to pay bankruptcy debts or fees.
An unsatisfied writ for a foreign judgment was not execution under the Insolvency Act 1986 and could not be the basis of a bankruptcy petition.
Khan v Singh-Sall (trustee in bankruptcy of Mohammad Razi Khan) and another
The court has a broad discretion to consider all relevant circumstances when deciding whether to annul a bankruptcy, and time continues to run for limitation purposes for the period between bankruptcy and annulment orders.
The court has jurisdiction to make a bankruptcy order even if a debt is in dispute.
The High Court held a judgment following a Tomlin Order is a contingent debt included in the debtor's bankruptcy.
A bankrupt’s application to annul a bankruptcy order, and the merits of the application.
The three-year limit for a trustee to deal with the family home can be extended if the bankrupt did not disclose their interest.
Bankruptcy includes liabilities that exist before the date of bankruptcy.
Office of the Bankruptcy Adjudicator v Shaw
Accessible pension funds with sufficient value must be taken into account when considering whether a debtor meets the insolvency test.
An order for sale in bankruptcy can be delayed in exceptional circumstances.
A debtor's application to adjourn the bankruptcy petition to get more time to pay the petition debt was unsuccessful.
Landlord’s bankruptcy petition dismissed due to a failure to provide an address for service of notices.
Cases by name
A-Z
A
Addison v London European Securities Ltd
Axnoller Events Ltd v Brake and another (Costs)
Axnoller Events Ltd v Brake (mental health crisis moratorium) (Rev1)
B
Bluestone Mortgages Ltd v Stoute
Brake and another v Guy and others
C
Churchill v Merthyr Tydfil County Borough Council
Consulting Concepts International Inc v Consumer Protection Association
D
Dusoruth v Orca Finance UK Ltd
DV-W v Cheshire West and Chester Council
F
FXF v English Karate Federation Ltd & Anor
G
H
I
Ince Gordon Dadds LLP v Mellitah Oil and Gas
IV Fund Limited SAC v Mountain
J
Just Digital Marketplace v HCEOA
K
Khan v Singh-Sall (trustee in bankruptcy of Mohammad Razi Khan) and another
L
M
Madison CF UK (118118 Money) v Various
Matthew (Appellants) v Sedman (Respondent)
N
Notting Hill Finance Ltd v Sheikh
O
Office of the Bankruptcy Adjudicator v Shaw
P
Progressive Property Ventures LLP v Mrozinski
R
Royal Borough of Kingston-Upon-Thames v Moss
S
Southern and District Finance v Barnes
Stanley v London Borough of Tower Hamlets
T
Terry v BCS Corporate Acceptances Ltd and others
Timson, R (on the application of) v Secretary of State for Work and Pensions
W
Waller-Edwards v One Savings Bank
Y
Numerical