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27th Jan 2023
Philip Judd (instructed by Perrin Myddelton) for the Claimant.
His Hon Judge Dight CBE:
These are the reasons for the decision which I announced yesterday afternoon.
Mr Kaye has an unpaid judgment against Ms Lees for a significant sum of money, exceeding £300,000, (“the Judgment Debt”) arising from decisions made by His Hon Judge Roberts, following trial, in two judgments handed down on 30 July 2018 and 2 January 2019 which dealt with liability and quantum of damages respectively. Those damages resulted from what HHJ Roberts found to be nuisance and harassment caused by Ms Lees to Mr Kaye during the time that she had been his neighbour in adjacent flats in the same building. As a consequence Mr Kaye was granted a final charging order over Ms Lees’ lease (“the Lease”) of the Ground Floor Maisonette, 8 Leysfield Road, London W12 (“the Flat”). An order for sale was made on 6 March 2020, pursuant to which Mr Kaye purported to sell Ms Lees’ leasehold interest to a Ms Dixon in March 2022 for £505,000. Mr Kaye used part of those proceeds of sale (£188,963.90) to discharge Ms Lees’ mortgage over her lease of the Flat in favour of Santander. As a result of the same order Ms Lees was evicted from the Flat and Ms Dixon went into occupation.
However, Ms Lees had been subject to a breathing space moratorium. She had been granted a series of four mental health crisis moratoria made under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the Regulations”) as a result of which I held, in a judgment which I handed down on 13 May 2022 (Lees v Kaye  EWHC 1151 (QB)) (“the May judgment”), that the sale to Ms Dixon and the eviction of Ms Lees from the Flat was null and void. For the detailed background to this litigation I refer to the May judgment. Here I will use the same abbreviations as I used in the May judgment.
Laing LJ subsequently refused permission to appeal to the Court of Appeal against the May judgment.
In a judgment which he handed down on 21 December 2022 ( EWHC 3326 (KB)) (“the December judgment”) Swift J dismissed an application by Mr Kaye to set aside the moratorium which was in place at that time. Swift J also held that the effect of the discharge of the mortgage by Mr Kaye, in light of the May judgment, had been to subrogate Mr Kaye to the rights and liabilities of Santander as creditor of Ms Lees and mortgagee of the Lease. That means, in my view, that the liability of Ms Lees to Mr Kaye, after taking account of various costs orders going both ways, now stands in the order of £500,000, although I do not know the precise figure. Part of that liability is secured by the charging order which was made against the Lease of the Flat, which would remain in place following the May judgment, and part of it is secured by way of subrogation to the Santander charge over the Lease.
In the interim Ms Lees’ solicitors had sent a letter before action dated 31 August 2022 to Mr Kaye’s solicitors indicating that they had instructions to commence proceedings against him without further notice for breach of statutory duty and trespass for which Ms Lees would seek damages, including aggravated and exemplary damages. As I understand it no such claim has yet been brought. There is no suggestion that Ms Lees was not in a position to give instructions to her solicitors to litigate on her behalf and commence fresh proceedings.
The event which gave rise to the current application was that Ms Lees had been granted a further Mental Health Crisis Moratorium which commenced on 8 November 2022 (“the Current Moratorium”).
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