In the case of Together Commercial Finance Ltd v Fay of London Ltd [2025] EWHC 12 (Ch), the High Court granted a possession order in favour of Together Commercial Finance Ltd (“TCFL”), refusing applications of Fay of London Limited (“FOL”) and Ms Peganova, a beneficiary of the leasehold property, for permission to file an amended Defence and Counterclaim. 

Background

FOL originally obtained a lease of the Flat by purchase in November 2011. FOL is now owned by trustees of a discretionary family settlement of which Ms Peganova is one of several discretionary beneficiaries. She asserted that, either by proprietary estoppel or common intention constructive trust, she owned a beneficial interest in the Original Lease and now the Current Lease to which her interest binds the mortgagee. Ms Peganova was also the occupier of the Flat.

Both FOL and Ms Peganova filed an application to add Ms Peganova as a second Defendant, amend the Defence, and bring a Counterclaim by FOL.

HHJ Davis-White KC considered Ms Peganova’s case and evidence and found that she did not have a real prospect of success and did not think it was prudent to add her as a party to proceedings.

Interestingly, HHJ Davis-White stated, “in [his] judgment CPR r55 does not require every person to be joined who is in occupation of a mortgaged property in relation to which the mortgagee seeks possession”.

Discussion

Procedurally, CPR r55 governs mortgage possession proceedings, and CPR r55.10 sets out who is required to have notice of the hearing;

(1) This rule applies when a mortgagee seeks possession of land that includes residential property.

(2) Within 5 days of receiving notification of the date of the hearing by the Court, the Claimant must send a notice to –

(a) the property addressed to ‘the tenant or the occupier’;

(b) the housing department of the local authority within which the property is located, and

(c) any registered proprietor (other than the Claimant) of a registered charge over the property.

(3) The notice referred to in paragraph (2)(a) must –

(a) state that a possession claim for the property has started;

(b) show the name and address of the Claimant, the DefendantDefendant and the Court which issued the claim form; and

(c) give details of the hearing.

(3A) The notice referred to in paragraph 2(b) must contain the information in paragraph (3) and must state the full address of the property.

(4) The Claimant must produce at the hearing –

(a) a copy of the notices and

(b) evidence that they have been sent.

(4A) An unauthorised tenant of residential property may apply to the Court for the order for possession to be suspended.

The Claimant is only required to send notice of the hearing to those listed within CPR r55.10(2), and it does not suggest that they must be added as a party to proceedings. Interestingly, CPR 55.10(4A) provides some scope for unauthorised tenants to make applications to suspend orders for possession. It is clear that only in limited circumstances can third parties become involved in these proceedings. On the face of CPR r55.10, there is no scope for the Court to add parties to proceedings to oppose a possession order. CPR r55.10 is limited to notice, and there are no further provisions within CPR r55 that enable any party to be added on the basis they were served a CPR r55.10 notice. 

A possession order, in mortgage proceedings, is a remedy to recover debt attached to the property. Therefore, the basic tenets of contract law apply.

An occupier of a property cannot satisfy the principles of the contract as they were not the contracting party with the mortgagee. Therefore, it would not be appropriate to add them to proceedings on the sole basis that they are occupiers.

Possession claims often rely on some breach of the mortgage terms and conditions, for instance, arrears or the expiry of the mortgage or death of a mortgagor. The claim is pleaded on these grounds. Therefore, any defence against the pleaded claim must be directly linked to the cause of action. An individual outside of this contract does not have standing to defend the contractual claim unless their interest in some way overreaches that of the mortgage lender. Nothing prevents this party from issuing their claim against the defendant personally for a breach of trust,but the mortgage possession claim would generally not be regarded as the appropriate forum for this.

This judgement provides confirmation that the addition of parties to proceedings is still subject to the Court’s discretion and does not follow as a matter of course by their occupation of the property alone.