Held, application refused. (1) While the court clearly had power, under section 37(1) of the Senior Courts Act 1981, to grant an injunction for a defined period to restrain the debtor from applying for a breathing space moratorium or a mental health crisis moratorium, the key question was whether it was appropriate for it to exercise that jurisdiction by granting an injunction in such circumstances. It was relevant in that regard that the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, read as a whole statutory scheme, defined the rights of the debtor and the creditor and set out the role of the court. Parliament had given debtors an unfettered right to apply to a debt advisor for either type of moratorium and, even where a moratorium was set aside by the court, had not placed constraints on debtors applying for a new moratorium. On each occasion on which an application was made, the debt advisor undertook a quasi-judicial decision-making process in order to decide, first, whether the statutory criteria were met and, second, whether it was appropriate to grant the requested moratorium. The primary decision-maker under the Regulations was therefore the debt advisor, not the court, and, if a moratorium were granted, the Regulations provided that it would in consequence affect the right of the creditor to take enforcement action. Against that background, and given that Parliament had given those unfettered rights to a debtor and had allocated primary decision-making to the debt advisor, it would not be right to grant an injunction which set up a different decision-making structure. As such, a creditor could not properly ask the court to remove those statutory rights from the debtor for a period of time or to subject the exercise of those rights to judicial supervision when that was not part of the statutory scheme. A creditor did not have a legitimate right to proceed with enforcement of a judgment without having to face the risk that the debtor would seek and might be granted a moratorium, because such an order would seek to constrain the rights of the debtor as given to them by Parliament under the 2020 Regulations, in a way that was not permitted by those Regulations. It followed that the creditor did not have an interest which merited protection, so as to justify the making of an injunction, in so far as the claimed interest was his right to enforce a judgment debt without being subject to the possibility that a debtor would lawfully exercise his or her rights to seek a moratorium (paras 38, 39, 45, 46, 47, 48).

Per curiam. (1) Even if there were an interest which merited protection, it would only be appropriate to grant an injunction to prevent a person from abusing their rights under the Regulations. If, and in so far as, the debtor had been making the applications for an improper proper purpose, namely, to avoid having the debt enforced, rather than for a proper purpose of giving herself an opportunity to seek advice with a view to making a realistic plan to pay the debts, then the debt advisor should have reached the decision that it was not appropriate to grant a moratorium. Arguably, however, there was no abuse by the debtor in the present case as the fault primarily lay with the debt advisors who granted applications when they should have refused them and not with the debtor, who may have thought that she was properly exercising her statutory rights as she saw them (paras 48, 49).

(2) As any decision of a debt advisor to grant a moratorium is a quasi-judicial decision it can, at least in theory, be challenged by the creditor by way of judicial review. If the debtor is granted a new moratorium as a result of failure by a debt advisor to apply the tests under the 2020 Regulations correctly, any application to quash that decision will be made against the decision-maker, namely the debt advisor, and not against the debtor, although the debtor will have to be joined as an interested party. On any such application the debt advisor will need to explain the reasoning for reaching their decision and the court will decide if the debt advisor had acted lawfully or not. In circumstances such as those of the present case, if the debtor has obtained a moratorium from a debt advisor mainly or substantially for the purpose of preventing the sale of their flat, without advancing any other realistic plan to pay the sums that they owe, a judge may be inclined to truncate the judicial review timetable so that a judicial decision can be reached on the lawfulness of the debt advisor’s decision within a very short period, and hopefully soon enough to make a decision before any potential sale is lost (whatever decision is made). The defendant to such an application, and the person thus potentially liable in costs, will be the debt advisor and not the debtor (paras 52, 54).