View source for ICLR (2025) WLR(D) 19

<div align="center">
Chancery Division

Seculink Ltd v Forbes

[2024] EWHC 3339 (Ch)

2024 Oct 17, 18; Dec 20

Sir Anthony Mann sitting as a High Court judge
</div>

''Debt— Enforcement— Moratorium— Creditor commencing debt enforcement proceedings— Debtor obtaining mental health crisis moratorium— Creditor challenging status of debt as “moratorium debt”— Court finding no jurisdiction to determine matter where statutory challenge to debt status not made— Court requiring claimant to obtain permission to pursue enforcement application— Whether statutory mechanism exclusive route to challenge status of debt— Whether court’s permission required to pursue enforcement application to judgment— Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (SI 2020/1311), regs 6, 7(2)(b)(7)(a), 10(3), 17, 19''

The claimant advanced a bridging loan to the defendant, secured by way of charges over five of the defendant’s properties. The loan was not repaid, and the claimant commenced possession proceedings in respect of all five properties. Subsequently, the defendant breached the terms of a settlement agreement entered into by the parties and the claimant applied to the county court to enforce its terms. At the first hearing, the defendant claimed that he had the benefit of a mental health crisis moratorium issued by a debt advice provider under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020. The claimant accepted that the time limit for challenge under the 2020 Regulations had passed, but contended that the debt in question was not a moratorium debt within the meaning of regulation 6 of the Regulations. The court held that the issue of whether a debt was a qualifying debt to which a moratorium could be applied was one which under the Regulations had been consigned to a debt advice provider. Where no challenge had been made by the claimant to the provider’s decision pursuant to regulations 17 or 19, the court accordingly lacked jurisdiction to determine the matter. The court further held that the claimant’s pursuit of the action constituted a step to collect a moratorium debt under regulation 7(7)(a) of the 2020 Regulations which, pursuant to regulation 7(2)(b), the claimant was prohibited from doing without the court’s permission. The claimant appealed, submitting that (1) the decision as to jurisdiction removed its fundamental right to access to the courts, and (2) regulation 7(2)(b) was to be read with regulation 10(3), which permitted a pending action or proceeding relating to a moratorium debt to continue until the court or tribunal had made an order or judgment.

On the appeal—

Held, appeal allowed. (1) Regulations 17 and 19 of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 did not contain the only court-based route for challenging the status of an alleged moratorium. The mechanism under the Regulations provided a potentially simpler and quicker route to determining whether something was a qualifying debt or not, but was not compulsory and did not prevent a creditor from applying to court from the outset. If a debt was not a qualifying debt, it remained non-qualifying at all times irrespective of what a debt advice provider considered. If that was right, then it retained that status and a court could determine the question of qualification whenever it arose. Accordingly, the court’s jurisdiction had not been excluded by the Regulations (paras 52, 55, 56, 58, 66, 68, 69, 77, 111).

(2) The 2020 Regulations did not impose a general bar on continuing pending actions without the permission of the court. Continuing a pending action up to judgment, even where it concerned a moratorium debt, was not a prohibited enforcement step within regulation 7(7). Accordingly, the court’s permission was not required to pursue the present action (paras 105–108, 111).

Tom Morris (instructed by JMW Solicitors LLP, Manchester) for the claimant.

Martin Westgate KC and Angharad Monk (instructed by T V Edwards Solicitors LLP) for the defendant.

<p align="right">Victoria Wheen, Solicitor</p>

Referenced Legislation

Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (SI 2020/1311), regs 6, 7(2)(b)(7)(a), 10(3), 17, 19