England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Lewison QC)

		Royal Courts of Justice Strand London WC2 Tuesday, 27th March 2001

1. LADY JUSTICE ARDEN: I wish to deal with a further submission that is made in application 6035. It is this. Mr. Marya says that he has a good ground for appeal against the order of Mr. Kim Lewison QC dated 31st March 2000 as his assets greatly exceed the creditor's claim. He asks that his case be reinstated because:

"my request for the 24 November 2000 hearing was only for the stay to be granted as sufficient documents were not ready at the time to present the appeal against the bankruptcy order of 18 October 1999 so that the Honourable Court be convinced that the said order was utterly invalid. It is my contention that the said order should not have been made:

(i) When a counterclaim was pending.

(ii) My assets greatly exceeded the creditor's claim" (see application notice 62/2000/6416).

2. The application which was heard by Mr. Lewison was not an application for an appeal against the bankruptcy order. It was an appeal against the refusal of District Judge Sturdy in the Kingston County Court to annul a bankruptcy order which was made on 18th October 1999.
3. The judge explained that the court has a statutory power to annul a bankruptcy, to be found in section 282 of the Insolvency Act 1986. Those two grounds are that, on any grounds existing at the time that the order was made, the order ought not to have been made, and, second, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court. The second ground was not in issue before the judge.
4. An application to annul the bankruptcy order was made to the Kingston County Court by Mr. Marya on 12th November 1999. It was adjourned to 26th January pending the outcome of an assessment of damages. On 31st January 1999 Mr. Marya applied for the execution of the bankruptcy order to be stayed but I am not concerned with that application. Mr. Marya has shown me a written submission that he signed and served for use on 26th January, in which he says that he has about £80,000 of assets in India, and apart from that his statement of assets and liabilities is as follows. He lists various assets said to be worth £599,000 and various liabilities said to total £252,500. He also sets out a list of the cases which have been brought "for" or "against". I think he means actions that he has brought or actions which have been brought against him. That statement is not supported by any documentary or other evidence. It was a written submission. District Judge Sturdy refused the annulment.
5. Mr. Marya appealed to the High Court. He asked for an order that the bankruptcy order be annulled. In his Notice of Appeal he set out as his grounds that:

"(1) the District Judge did not take into account the prevailing facts and my total circumstances, and also whether the claimant was eligible to file the bankruptcy petition when applications were pending at the Uxbridge County Court, and the claimant was also refused by the Slough Bankruptcy Court. Despite the fact that his assets exceeds. [sic]

(2) District Judge might not like to interfere in the order of the same level judge or might not be empowered.

(3) District judge should await the outcome of my application dated 24th January 2000 to the Uxbridge County Court for that oral hearing to be conducted and now listed for 4th April 2000."

6. That was the application which came before Mr. Lewison. It will be recalled that Mr. Lewison said that the question of whether the bankruptcy debts and expenses have been paid or secured to the satisfaction of the court did not arise, and he dealt with the matter solely on the basis that Mr. Marya said that he had a cross claim for damages against Southall Properties Ltd. The original cross claim against Southall Properties Ltd was no longer pending at the date of the hearing before Mr. Lewison, it having been dismissed by HHJ Perry. Mr. Marya had launched a further counterclaim which was still pending at the date of the bankruptcy order but which had been struck out by the date of the hearing before Mr. Lewison. Mr. Lewison took the view that the District Judge must have formed the view that the second counterclaim was "extremely speculative". In my judgment, there is no prospect of success on appeal against the judge's conclusion on that point. There is a reference in the judge's judgment to the hearing then due to take place in the Oxbridge County Court on 4th April 2000 (ground (3) in the Notice of Appeal) but I have not been shown any evidence which would lead to the conclusion that it is a matter which would justify the grant of permission to appeal.
7. Had the second ground for annulment set out in section 282 of the Insolvency Act 1986 been in issue before the judge, it would not in my judgment have been sufficient for Mr. Marya to say that he had assets in excess of his liabilities if he had not paid or secured in a way which would satisfy the Court debts then properly to be regarded as due. That was the position as regards (at least) the debt due to the petitioning creditor, Southall Properties Ltd. Accordingly there would have been little prospect of success on this ground before Deputy Judge Lewison. Moreover, there was no proper evidence to support an application on the second ground. Be that as it may, the second ground was not raised before Deputy Judge Lewison, so when the matter came to be considered by this Court, it was not considered by Rix LJ.
8. There has been no change in the position and accordingly in all the circumstances it is not a point on which there is any realistic prospect of success on appeal. Therefore, the position in my judgment is that Mr. Marya has not shown any ground on which the Court could now grant permission to appeal against the order of Mr. Lewison. If Mr. Marya wishes to make an application for annulment on the ground that the debts and expenses had been paid or provided for in a satisfactory manner, it is open to him to make that application in the lower court if he has the appropriate evidence and subject also to his complying with paragraph (2) of the order of Mr. Lewison, which requires him to obtain the prior permission of a Judge of the High Court.
9. These grounds are additional to those set out in my earlier judgment dismissing Mr. Marya's application to reinstate an application for permission to appeal against the order of Mr. Kim Lewison QC dated 31st March 2000.