England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION (NEWCASTLE UPON TYNE DISTRICT REGISTRY)
(HIS HONOUR JUDGE BEHRENS)

		Royal Courts of Justice Strand London WC2A 2LL Thursday 8 November 2001

1. LORD JUSTICE MUMMERY: There are before the court two applications by Miss Rayne, who appears in person. Both applications have been adjourned from earlier hearings.
2. The first is an application for permission to appeal an order made by His Honour Judge Faulks dated 9 March 1999. The second is an application to reinstate an application for permission to appeal against a bankruptcy order made against Miss Rayne of 4 May 2000. That order was upheld by His Honour Judge Behrens in the Newcastle District Registry when Miss Rayne attempted to appeal against it. So it is a second appeal.
3. The hearing of these applications was unfortunately delayed owing to transport problems encountered by Miss Rayne. When she arrived, she was accompanied by a representative, who is a trainee from an organisation called Wings of Justice. Miss Rayne asked the court if that representative could address us on her application to appeal from the county court judgment of 9 March 1999. She made it clear that she wished to address us personally on her bankruptcy appeal.
4. We decided we would hear the bankruptcy application first. We have heard detailed argument from Miss Rayne for a time which well exceeds the normal time allowed on applications for permission or applications to reinstate applications for permission.
5. During the course of her submissions, Miss Rayne helpfully referred us to her main points which have been typed out in her "Appellants Skeleton Argument". Attached to that are a number of documents, including the judgment of Judge Behrens and a chronology. In addition, Miss Rayne referred us to a number of authorities, to sections in the Insolvency Act, to the Insolvency Rules and to a number of authorities, most of which related to the power of the court, in her submission, to go behind a judgment on which a bankruptcy order has been based.
6. The bankruptcy aspect has been dealt with in more detail in an earlier judgment which I gave when this application was adjourned. The matter goes back to the early 1990s when Miss Rayne entered into a contract to purchase a public house, The Hollies in Linton, Morpeth, from AIB, the respondents. She was in occupation. She failed to complete in April 1992. The bank obtained an order for possession and an order for damages to be assessed.
7. Possession was obtained on 30 April 1992 in circumstances which gave rise to her proceedings for a county court judgment, which she obtained in the sum of £10,000 from His Honour Judge Faulks on 9 March 1999. A number of years after the order for possession was obtained, the amount of the damages payable by Miss Rayne were quantified by Master Bragge in his judgment of 4 March 1998 in the sum of £40,000 and interest of £34,815.75.
8. Miss Rayne made an unsuccessful attempt to appeal that judgment. That was followed by a statutory demand served on 30 November 1998. The bankruptcy order was made on 4 May 2000 by District Judge Bullock. We have seen an unusually detailed judgment which he gave.
9. Miss Rayne then sought to appeal that bankruptcy through His Honour Judge Behrens. On 25 January 2001 he dismissed the appeal. Miss Rayne lodged an application for permission to appeal to this court in February 2001. That was struck out by the Master of Civil Appeals on 25 April 2001 on the basis of non-compliance with procedural requirements for bringing applications for permission. It was on 17 July 2001 that Miss Rayne launched her application (No 0324) to reinstate that.
10. Miss Rayne is seeking to question the correctness of the judgment on which the bankruptcy order was made. In her skeleton argument she has gone into a great deal of detail about the origins of her dispute with AIB. She summarises her main grounds of appeal against the bankruptcy order in a number of points all relating to the correctness of the judgment against her on which the bankruptcy order was made. She says that the judgment was obtained by fraud and in total bad faith; that the party to the proceedings was the wrong party and lacked the requisite locus; that certain procedural requirements which were essential had been breached; that damages had been obtained so long after the events which gave rise to the claim that it was statute barred; that the judgment was therefore irregular, null and void and no proper bankruptcy order could be made on it; and that she was, therefore, entitled to question the validity of the bankruptcy order.
11. As I have pointed out to Miss Rayne on a previous occasion, the difficulty she has is explained by a decision of this court in Heath v Tang [1993] 1 WLR 1421, which reaffirmed the general principle that on an adjudication of bankruptcy, the bankrupt is divested of his interest in his property. That means that the bankrupt has no standing to bring an appeal against a judgment, including the judgment on which the bankruptcy order was obtained.
12. I quoted in my previous judgment the essential passages of the judgment given by Hoffmann LJ, which was the judgment of the court. He said at page 1427A that, under the new Insolvency Act, the principle was still the same as it had previously been, namely:

"The principle that the bankrupt is divested of an interest in his property and liability for his debts remains fundamental in the new code. The consequences for the bankrupt's right to litigate do not seem to us inconvenient or productive of injustice. The bankruptcy court acts as a screen which both prevents the bankrupt's substance from being wasted in hopeless appeals and protects creditors from vexatious challenges to their claims."

13. Hoffmann LJ went on to explain how the bankrupt was seeking to appeal against a judgment. The point was taken by the bankrupt that his estate had not yet vested in the trustee because no trustee had been appointed but, as Hoffmann LJ pointed out, the Official Receiver was Receiver of the estate and, in those circumstances, there was no interest in the bankrupt challenging the judgment. The appointment of a trustee was inevitable and it would be pointless to give leave to bring an appeal which would be stayed on the appointment of the trustee. The application was refused. I will not refer to the other passages in that judgment or to other judgments in which the same principles have been applied.
14. The short answer to all Miss Rayne's detailed points is that they are points which she is not entitled to make. She has attempted to make them in the past, unsuccessfully, in seeking to appeal the judgment. Now she has been made bankrupt, if there is anything in these points, they must be taken in the bankruptcy by the trustee if and when he is appointed. They are not points which Miss Rayne is entitled to make. In those circumstances, there is no point in reinstating the application for permission to appeal.
15. For the reasons I have given, these applications would be bound to fail. There is no point in this court entertaining the other application for permission to appeal against the judgment of His Honour Judge Faulks. By reason of the bankruptcy the benefit of that judgment is no longer vested in Miss Rayne and she is not entitled to pursue that appeal.
16. I would refuse to reinstate the application for permission in the bankruptcy proceedings and I would refuse the application for permission in the county court proceedings.
17. LORD JUSTICE BUXTON: I agree. There is nothing I wish to add.
Order: Application to reinstate application for permission in bankruptcy proceedings and application for permission in the county court proceedings refused. (Order does not form part of approved judgment)