Chippenham and Trowbridge County Court refused to allow a lender to add costs to the security because the lender had rejected an offer to clear the arrears by instalments which was made prior to the issue of proceedings.
The County Court at Manchester also disallowed costs where a lender opposed a borrower’s application to suspend a Warrant. The background was that the borrower had a missed a payment under a suspended possession order but the missed payment was made prior to the hearing. The Judge took the view that the lender ought to have agreed to suspend as soon as the missing payment had been made because there was clear evidence that the borrower could maintain payment in the future.
The message here is that Judges want lenders to be more flexible and back down where arrangements have been made or brought up-to-date. Of course, there is no obligation for lenders to adopt a more lenient approach and the courts often forget (or choose to ignore) that lenders will have been very patient for a very long time before resorting to proceedings.
Mitchell v News Group Newspapers (“Mitchell”)
The Mitchell case (where Andrew Mitchell’s Solicitors were late filing their cost budget, resulting in Mr Mitchell not being able to recover any of his costs) was cited in a recent decision in a mortgage possession case. In Swindon County Court, a District Judge struck out a possession claim because the lender had filed its witness statement some three weeks after the date on which it was ordered to file it following an earlier directions hearing. The Judge referred to the case of Mitchell v News Group Newspapers Limited and ordered that the evidence would not be permitted. The Judge could simply have ordered that no costs should be recovered but there was an additional factor that may have resulted in the strike out and that was the lender’s failure to be represented at the hearing. The Judge determined that, as it was a final hearing, notice that the lender was not going to attend should have been given at least 7 days before the hearing (to comply with the Civil Procedure Rules) which the lender’s legal representative failed to do.
In Doncaster County Court, a District Judge recently adjourned a case and disallowed costs because the witness statement filed some 11 days before the hearing was not on the court file. He refused to accept the advocate’s copy or to consider the copy letter filing the witness statement. He stated that the lender should have checked via PCOL that the witness statement had been received.
This is a reminder that non-compliance, or late compliance, with court directions even in what are considered to be routine cases will not be tolerated by the courts. There is no room for sloppiness by lenders or their legal representatives!
Problems at court when the arrears include ground rent and service charges
Several recent cases have been adjourned to allow for pleadings to be amended where ground rent and service charges paid by the lender to prevent forfeiture have been included within the arrears without any specific reference to them in the Particulars of Claim. In one case, it came to light at the hearing that the arrears were made up entirely of ground rent and service charges paid by the lender.
Where payments of ground rent and service charges are included within the arrears, this must be clearly set out in the Particulars of Claim and evidence should be provided (by reference to the mortgage conditions and demands for payment) to satisfy the court that it was appropriate for the lender to make such payments.
Finally, some procedural changes you should be aware of:
Court fees – how much?
Lenders will no doubt be aware of the recent increase in County Court fees, effective from 22 April. A claim for possession issued via the court’s online system (PCOL) now costs a whopping £250.00, an increase of £150. Fees for claims that cannot be issued via PCOL have increased from £175 to £280.00. Of course, these fees can be added to the mortgage debt, but lenders should be aware of the changes and the consequential increase in fees that will eventually be debited to the mortgage account. Warrant fees remain the same.
What has happened to our County Courts?
The biggest change, coming into force with the latest amendments to the Civil Procedure Rules is the advent of the ‘single’ County Court. As of 22 April 2014, instead of there being local County Courts, i.e. Warwick or Coventry County Court with a locally defined jurisdiction, there is ‘The County Court’ which has a national jurisdiction. All local County Courts have been renamed ‘hearing centres’. In theory this means that possession claims can be issued at any hearing centre. In practice, PCOL will continue to allocate a hearing at the hearing centre closest to the borrower’s home.