Bankster’s Possession Order Struck-Out for Misrepresentation

The following is a transcript of a recent High Court judgment, explaining the reasons for the striking-out of a possession order over a property, which was obtained by Spanish bank Santander’s misrepresentation of whether a purported mortgage they were seeking to enforce had been securitised. To the very best of my knowledge, this is the very first time that a mortgagor has won a mortgage case against a bankster in the High Court since the founding of the Ministry of Justice.

Provided that the judgment is not set aside by either the Court of Appeal of the Supreme Court,this unprecedented case could provide a powerful authority to all those who are alleging misrepresentation against UK mortgage companies in Her Majesty’s Courts.

Neutral Citation No. [2013] NICh 14

Ex tempore Judgment: approved by the Court for handing down
(subject to editorial corrections)*







[1] The court here is dealing with a situation which happily is unusual.
Thomas Anthony Carlin and Maxine Karen Hughes have appealed from an Order
for possession granted by the Master relating to their home because they
are in arrears of payments on an interest only mortgage on the property. As
a number of personal litigants do in recent times they challenged the right
of Santander UK plc to enforce the mortgage because they suspected that
they may have transferred it away.

[2] It is clear law, as has been recently reaffirmed by the Court of Appeal
in England in Paragon Finance v Pender and Another [2005] 1 W. L. R. 3412
that a legal owner of a charge can part with the equitable interest in it
without losing their right to enforce the charge. Therefore, this point in
many cases is likely to prove a short-term gain for any borrower because it
is simply a matter of the right person establishing that they are entitled
to assert what had been agreed between the parties under the mortgage would
happen in default of the payments agreed. Nevertheless, it is essential
that the court is making an order in favour of the correct party who has
the right to enforce a legal charge, as much as any other contract between

[3] A most unhappy situation has developed here. Santander UK plc sought
the Order for possession. They put in an affidavit in support; they chose
to do it in a particular way, that is through their solicitor. Now, Mr
Carlin in one of several documents which he submitted to the court has
sought to rely on a judgment of Mr Justice Peart in the High Court in
Dublin where he objected to hearsay evidence of debts. It seems clear that
there is no equivalent of the Civil Evidence Order in the Republic of
Ireland and explains the judge’s remarks. We do have a Civil Evidence
Order. Parties are entitled to put in an affidavit and to rely on hearsay
evidence with the court assessing its weight. In any event even before the
Civil Evidence Order an affidavit with the deponent saying that they had
been informed of something by a named person and that they believed it was
true, in appropriate cases for the smooth administration of justice was
received. This is often done, particularly in originating summonses cases.
But it is important that it is done carefully and conscientiously. The
system only works if both the lawyer is scrupulous in what the lawyer says
and the client is honest in what they inform the lawyer.

[4] Here we have the situation where, it is now admitted that paragraph 15
of the affidavit of Miss Valerie Gibson, solicitor, for the lender
Santander plc of 6 December 2012 is simply wrong. Mr Carlin would say it is
a lie and at the moment I do not see how that can be clearly gain said; it
is not Ms Gibson’s lie but when somebody told her that the mortgage had not
been assigned they were either being careless or untruthful and at this
precise moment in time I do not know which is the case. And what is more Mr
Carlin asserts and Mr Gibson with his customary and proper candour does not
dispute that the Master was told that there had been no assignment here and
so that these issues did not arise. So the Order of the court below was
obtained improperly by a misrepresentation to the court, misrepresentation
put by the advocate for the lender to the Master and put in a sworn

[5] That would be a serious enough state of affairs but at the review of
this matter before me when listing this case for hearing today, 19
September, the plaintiff was given an opportunity and was directed on that
occasion on 10 June to serve a rejoinder affidavit to Mr Carlin’s affidavit
and that of Miss Hughes within two weeks from that day, that is by 24 June.
They did not do so. They did not serve affidavits, as far as the court was
concerned, until 16 September, only three days before the hearing. Mr
Carlin says he got an unsworn, undated draft two days before that. That is
utterly unsatisfactory. It shows a disregard for the orders of the court
which would be disreputable in a litigant in person and is equally
disreputable on the part of a large commercial enterprise which should know
better. No satisfactory excuse is offered for that.

[6] Furthermore, the matter is worsened by the disregard by Santander of
the decision of Mr Justice Horner in Swift Advances plc v James and Maureen
McCourt [2012] NI Ch. 33. He on that occasion, on behalf of Swift did have
in court an official of Swift giving oral evidence before him because this
or a similar point had been raised there. Of course it failed ultimately
because Mr White, the Risk Manager of the plaintiff, gave sworn testimony
that he had made the checks and the plaintiff had not sold the loan of the
McCourt’s to any third party and it had not legally nor, apparently in that
case, equitably assigned the charge, which the judge accepted and so Swift

[7] The judge, and as I have already previously said in this court, wisely
in my view, commended the course that the solicitor acting for the
financial institution should expressly warn the proposed deponent on behalf
of the financial institution of the serious consequences he or she bears
personally and the consequences for his or her employer if he or she swears
an affidavit that is false in any respect. Next, their solicitor should
confirm to the court that the deponent has been so advised before the
affidavit is sworn. Thirdly, the deponent on behalf of the financial
institution should then swear the affidavit dealing with the plaintiff’s
title to seek an order for possession. It is only if some uncertainty is
left then that one should go on to deal with applications for specific
discovery. So it can be seen here that Santander have further disregarded
the decisions of this court because they have not deigned to swear the
affidavit themselves but have required Miss Gibson to do it. Now the matter
that is set out therein may or may not be right but it seems to me as it
contradicts the earlier information on affidavit as it was given to the
Master that Mr Carlin is entitled to cross-examine this lady as to whether
it is true and perhaps is entitled to further discovery.

[8] His initial application today was to adjourn the matter because he had
not got the skeleton argument in time and he had just been presented with
this change of front at a very late stage and the court was sympathetic to
that application. I heard from Mr Gibson. I gave the opportunity to Mr
Carlin as to whether he had any further application and of course he might
have made several applications at that time but he has chosen, as he put
it, to ask me to strike out the order, and as he put it, I think not
unreasonably in the circumstances, on the basis of untruth. Now the court
of course recognises that everybody makes errors. They should not make them
on affidavits, but at this point I do not know whether this was an honest
error, I do not know whether somebody was playing fast and loose with the
truth. No explanation of the earlier misstatement is given in the new
affidavit. What is certainly the case is that Santander have been in breach
of the directions of the court, they have been in breach of the judgment of
Swift v McCourt and they obtained an order by at least, as I said earlier,
misrepresenting the facts to the Master.

[9] In all those circumstances I conclude therefore that the appeal should
succeed and I reverse the order of the Learned Master, making it clear that
this is no reflection on him, and strike out the order for possession.

© Crown copyright

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