The Court of Appeal allowed Emberton Finance Limited’s appeal over its late claim to the proceeds of a property sale, overturning a High Court order that had refused the claim’s admission. The court did not decide the amount Emberton would receive: its claim remains subject to proof before the Examiner, with any payment governed by the mortgage’s registration priority and the funds available.
Emberton’s claim derived from a judgment mortgage registered by Friends First Finance Limited in December 2010 against the defendant’s interest in land recorded in Folio WX39665F. Friends First later assigned its loan assets, including the benefit of judgments, to Emberton.
Halston Street Credit Union obtained a judgment against the defendant in November 2011 and registered it against the same interest the following month. It later secured a well charging order and an order for sale. In August 2013, the Examiner directed Halston to advertise for claims, setting a deadline in September. Friends First was notified but did not lodge a claim by the deadline.
Emberton applied in October 2014 for leave to submit the claim late. Its affidavit offered no definite explanation for the missed deadline, suggesting the newspaper notices may have been overlooked during the summer. Halston opposed the application, disputing Emberton’s proof of succession and arguing that admitting the claim would prejudice it by giving Emberton priority.
The High Court refused the application. On appeal, the Court of Appeal said the High Court had wrongly considered principles used when a defendant seeks to set aside a judgment obtained by surprise. The appeal court reconsidered the application itself.
It held that the Examiner’s deadline was administrative, intended to help organise claims, and was not equivalent to a statutory or court-imposed limit. The court found Emberton’s delay had not delayed the sale or reduced the assets available to creditors; the property remained unsold and the Examiner’s certificate of encumbrances had not been finalised. It rejected the argument that “special leave” required exceptional circumstances and held that the court could not alter statutory priority as a condition of granting leave.
The Court of Appeal granted the relief sought. It did not determine the validity or final amount of Emberton’s claim, and it did not order a distribution. If Emberton proves its claim, it is to be dealt with according to the priority attached to its judgment mortgage by its registration date.