The Importance of Finality

This judgment of Mr Justice Zacaroli in Peter Singh Sangha v Amicus Finance Plc (In Administration) [2020] EWHC 1074 (Ch) is a helpful reminder of the importance of finality and that a party will rarely be allowed to subsequently rely on points which could and should have been relied upon initially.

The matter arose from possession proceedings brought by Amicus Finance Limited (“Amicus”) against Mr Sangha in respect of a property in Edgbaston, Birmingham after he failed to repay a loan of some £550,000 which was secured against the property. The loan had been taken out to fund the refurbishment of other premises for use as a nightclub.

After rejecting Mr Sangh’s arguments that he was attempting to obtain alternative finance and that a possession order would hinder those efforts, the County Court made a possession order requiring him to give possession by 1 March 2017.

When Mr Sangha failed to give up possession, Amicus applied for a warrant for possession, which Mr Sangha applied to suspend. The hearing of that application was adjourned to allow Mr Sangh to provide further evidence and submissions.

Instead, Mr Singh made an application to set aside the possession order under CPR Rule 3.1(7). That rule provides a power to vary or revoke any order made by the court.

Mr Sangha’s evidence was that he had a conference with counsel on 30 November 2017, at which point he became aware that he had a potential defence to the possession proceedings, arising out an alleged fraudulent misrepresentation relating to Amicus’ stance to the grant of a lease of the nightclub to one of Mr Sangha’s companies.

At the hearing on 4 December 2017, District Judge Burns-Beech stayed Mr Sangha’s application to suspend the warrant for possession (pending determination of the application to set aside the possession order) and stayed the possession order, in light of the last-minute application to set it aside.

The application to set aside the possession order came before Deputy District Judge Sharp on 6 April 2018, when it was dismissed.

The judge noted that the thrust of Mr Sangha’s case was that he had only appreciated, upon meeting with counsel on 30 November 2017, that he had a defence to the possession claim.

Was the Possession Order a ‘Final Order’?

The court confirmed that an Order might be final whether it was made on the merits after a trial or in default of compliance with orders or following summary judgment or strike out.

The Court rejected the submission that the possession order was not a final order because Amicus, in order to recover possession, still had to execute the order (unless Mr Sangha voluntarily complied with it). This did not affect the finality of the order any more than the finality of a money judgment is affected by the fact that the judgment creditor might have to execute against assets of the debtor before it recovers the money ordered to be paid.

Similarly, the court did not accept that Mr Sangha’s right to redeem the mortgage by paying the whole of the sum secured by it, and thus retain possession, affects the finality of the order. That does not alter the fact that a final determination (reflected in the possession order) has been reached as to Amicus’s right to obtain possession.

The Test for Setting Aside a Final Order

The judgment provides useful guidance on apply the test to set aside final orders under CPR 3.1(7). Finality is a critical factor.

Zacaroli J held that the most recent authoritative statement of the test to be applied under Rule 3.1(7) is to be found in the judgment of Hamblen LJ, giving the judgment of the Court, in Daniel Terry v BCS Corporate Acceptances Limited [2018] EWCA Civ 2422.

The judge held that it will be a rare instance that a party will be successful in setting aside a final order:

“… First, in relation to a final order, it is not sufficient to show that there was a change in circumstances or that the facts were misstated at the time of the original decision. Second, the importance of finality is a critical consideration in an application to set aside a final order. Third, the circumstances in which it might be appropriate to set aside a final order will be very rare”. [paragraph 35].

Additionally, the judge rejected the notion of ‘ineffectual’ attendance at a hearing. Allowing a party a second bite of the cherry due to a failure to take a point which was subsequently sought to be taken would drive a coach and horses through the required focus on finality. The mere fact that a point was not taken at the original hearing would normally not be enough to set aside an interim order, let alone a final one.