In Kaye v Lees [2023] EWHC 152 (KB) – the latest round in a series of applications under the new Debt Respite Scheme Regulations 2020 – the High Court has provided important guidance on the correct approach to applications to cancel mental health crisis moratoria.
The moratoria prevent enforcement by creditors and, in the case of mental health crisis moratoria, can last indefinitely. The respondent in this instance had entered successive moratoria on the eve of enforcement action. There is nothing in the Regulations preventing a debtor entering a subsequent moratorium even if the Court cancels one on application by a creditor, and in the absence of guidance there is significant uncertainty on how such applications will be treated. The applicant, Mr Kaye, had previously been found to be outside the prescribed time limit to apply to cancel an earlier moratorium, as found by the judgment of Mr Justice Swift in December 2022 (in Kaye v Lees [2022] EWHC 3326 (KB)). That moratorium had, however, ended shortly after the application before Mr Justice Swift, and the respondent had entered her fifth moratorium.
HHJ Dight CBE (Sitting as a High Court Judge) found that the respondent had never met the criteria to receive protection under the Regulations, and that Mr Kaye was unfairly prejudiced by the moratorium. Helpful guidance was provided on how the Court is to assess cancellation applications where it is alleged that the debtor is in crisis treatment, and on when injunctive relief is appropriate to prevent a debtor frustrating enforcement by entering into successive moratoria, the first provided by the High Court under this regime.
The full judgment is available here.
Philip Judd appeared for the successful applicant, Mr Kaye, led by Kerry Bretherton KC and instructed by Simon Braun of Perrin Myddelton.
