High Court orders readmission of leaseholder evicted in breach of mental health crisis moratorium

The High Court handed down judgment this afternoon in the case of Lees v Kaye & Dixon [2022] EWHC 1151 (QB), only the second time the Court has considered the debt respite scheme introduced last year by the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the Regulations”).

Mr Kaye had previously obtained a court judgment against Ms Lees for damages and subsequently obtained a charging order and order for sale of her leasehold flat in order to enforce the judgment.

Ms Lees was due to be evicted under the order for sale on 13 January 2022 but on 12 January 2022 was granted a Mental Health Crisis Moratorium under the Regulations, preventing enforcement of any eligible debts during the period of the moratorium. Mr Kaye proceeded with the eviction (by High Court enforcement officers) nonetheless and went on to purport to sell the flat to Ms Dixon, on the basis that the debt was not an eligible debt under the Regulations because it fell within an exception for personal injury damages.

Ms Lees issued an application against Mr Kaye and Ms Dixon, seeking a declaration that the sale was null and void as a result of the Regulations and an injunction requiring her to be readmitted to the flat.

HHJ Dight CBE (sitting as a Judge of the High Court) granted the application, holding that:

  1. There was no evidence to suggest that the moratorium had not been properly registered.

  2. Damages awarded to Mr Kaye for distress were not personal injury damages, and in any event also included other types of damages, so did not fall within the exception for personal injury damages (reg. 5(4)(i)).

  3. Reg. 7(13)(a), providing that a moratorium does not affect a charging order, does not allow enforcement of a charging order during the moratorium by way of an order for sale.

  4. Sale of the legal interest created by the order for sale constituted a step to enforce the judgment and so was prohibited during the moratorium (reg. 7(7)(b)).

  5. Therefore, whatever claims might exist between Mr Kaye and Ms Dixon (and the relevant mortgage lenders), the eviction and sale were null and void as against Ms Lees, who was ordered to be readmitted to her flat.

Daniel Clarke was instructed by Katie Brown of TV Edwards LLP for Ms Lees.