Bradford & Bingley Plc v Rashid - [2006] UKHL 37

HOUSE OF LORDS

SESSION 2005–06
[2006] UKHL 37

on appeal from [2005] EWCA Civ 1080

OPINIONS

OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE

Bradford & Bingley plc (Appellants) v. Rashid (FC) (Respondent)

Appellate Committee

Lord Hoffmann

Lord Hope of Craighead
Lord Walker of Gestingthorpe
Lord Brown of Eaton-under-Heywood
Lord Mance

Counsel

Appellants: Respondents:

Justin Fenwick QC Christopher Nugee QC

Nicole Sandells William Hanbury

(Instructed by Addleshaw Goddard) (Instructed by Williscroft & Co)
Hearing date: 24 May 2006

ON
WEDNESDAY 12 JULY 2006

HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE

Bradford & Bingley plc (Appellants) v. Rashid (FC) (Respondent)
[2006] UKHL 37

LORD HOFFMANN
My Lords,
1. The chief question is whether a letter containing an acknowledgement of a debt for the purposes of section 29(5) of the Limitation Act 1980 is inadmissible on the ground that the letter formed part of a negotiation with a view to the creditor giving the debtor time to pay or accepting a lesser amount. In common with all of your Lordships, I consider that the letter was admissible. But there is some difference of opinion over the reasons and I must therefore state my own. There is also a subsidiary question as to whether the letters contained acknowledgements within the meaning of the Act. They are set out in the speech to be delivered by my noble and learned friend Lord Brown of Eaton-under-Heywood and I agree with him and my noble and learned friend Lord Hope of Craighead that references in the letter of 26 September 2001 to an “outstanding balance” and in the letter of 4 October 2001 to an “outstanding amount” are plain acknowledgements of the existence of a debt. It is clear on the authorities that nothing more is needed.
2. The more complex question is why the letters are admissible. There is no doubt that they formed part of a negotiation. They were written in reply to an invitation from the building society to make them an offer. Judge Hawkesworth QC, sitting in the Bradford County Court and hearing an appeal from the Deputy District Judge, who had admitted one of the letters and given judgment for the building society, regarded this as sufficient to exclude the letters on the grounds that they were impliedly written without prejudice. He said:
“What was in issue was enforcement, and it seems to me there is equally a public policy issue in encouraging the parties to reach agreement as to the repayment of a debt as there is in encouraging them to agree as to the existence of a debt.”

3. The Court of Appeal agreed. I doubt whether anyone could object to the general sentiment expressed. Even when the indebtedness cannot be denied, the parties should be encouraged to agree on the method by which it should be discharged, if necessary giving the debtor time to pay. But the question is how this policy can best be given effect…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] UKHL 37
Decision Date: 12 July 2006

CaseChat Overview and Summary

Bradford & Bingley plc, a mortgagee, sought to recover a debt from Mr Rashid, who had fallen into arrears. The parties exchanged correspondence in 2001, in which Mr Rashid acknowledged the debt, although he sought to negotiate a repayment plan. The mortgagee issued proceedings in 2003, which Mr Rashid defended by relying on limitation. The mortgagee argued that Mr Rashid's correspondence amounted to an acknowledgement of the debt, which restarted the limitation period under the Limitation Act 1980. The court below held that the correspondence was protected by the without prejudice rule and therefore inadmissible. The mortgagee appealed. The House of Lords held that Mr Rashid's correspondence amounted to an acknowledgement of the debt, which restarted the limitation period, and that it was not protected by the without prejudice rule. The Lords disagreed on the reasons for this conclusion, but were unanimous that the mortgagee's appeal should be allowed.

Orders