England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(MR NIGEL DAVIS, QC, Sitting as a Deputy Judge of the High Court)

		Royal Courts of Justice Strand London WC2 Thursday, 20th December 2001

Thursday, 20th December 2001

1. LORD JUSTICE ALDOUS: This is an application for permission to appeal out of time an order of Mr Nigel Davis QC, sitting as a Deputy Judge of the High Court, dated 24th October 2000. By that order the judge refused the applicant, Mr Ernest Rhodes, application for an extension of time to appeal the order of District Judge Fink, who was sitting in Bankruptcy in the Croydon County Court. His order was dated 10th February 2000. It dismissed the applicant's application for the annulment of two bankruptcy orders to which I will have to come.
2. The applicant's notice was filed on 29th November 2000 so is out of time; but it is only a few days out of time, and I therefore would not rest the decision that I am going to come to upon that ground. I come, therefore, to the background facts. They go back to 1979. I can take them from the judgment of Peter Gibson LJ of 14th May 1996.
3. The applicant was an insurance broker carrying on business in offices in the Greater London area. In November 1979 he ceased business because of lack of funds. His belief is that that was due to deficits in the accounts due to the fraud of his employees, Mr and Mrs Cleeve, and their son.
4. In 1981 he started proceedings against Mr and Mrs Cleeve and their son alleging fraudulent misappropriation of funds. That action was dismissed for failure to serve the statement of claim.
5. On 21st December 1984 fresh proceedings were started, again alleging fraudulent misappropriation. That action proceeded slowly and was struck out on 24th January 1994. That decision to strike it out was upheld in the Court of Appeal on 14th May 1996. The result was that an order for costs was made against the applicant. Those costs have not been paid. One of the defendants then petitioned seeking a bankruptcy order against the applicant because of that non-payment. There was a contested hearing which resulted in a bankruptcy order dated 24th November 1997. The applicant appealed that bankruptcy order. His appeal was dismissed by Lightman J on 23rd April 1998.
6. The next step was an application of 6th December 1999 by which the applicant sought to set aside two bankruptcy orders. I should have mentioned the first. It was an order dated 1st December 1980. This was made on the applicant's own petition because at that time he admitted that he was insolvent.
7. The application to annul the 1987 bankruptcy order came before District Judge Fink who, on 10th February 2000 dismissed the application. The applicant appealed out of time. His application to extend the time for the appeal came before Mr Nigel Davis QC on 24th October, who refused to extend the time. He held that the time limit would not have been such as to make him refuse the order, but he then went on to look at the merits of the case and concluded that there was no point in extending the time as the appeal was certain to fail. The applicant now wishes permission to appeal to this court against that judgment of the judge.
8. As I have said Mr Nigel Davis accepted the applicant's explanation for his delay in applying for permission to appeal the order of District Judge Fink. He then went on to consider the merits of the appeal. He said it would be pointless to grant the extension of time if the appeal itself had no prospect of success. He concluded that first, the application to annul the bankruptcy order could not succeed. He said this:

"So far as the bankruptcy order made on 1st December 1980 is concerned, that is a very long time ago. The bankruptcy order was made on, I would stress, Mr Rhode's own petition. He frankly told me that at that time he was indeed insolvent. He further told me that he actually wanted to be made bankrupt so that, as he understood it, an independent trustee in bankruptcy could investigate the entirety of the affairs in which he was then involved. In those circumstances, it is very hard indeed to see any basis for seeking now to annul that particular bankruptcy order."

9. The judge then went on to consider the second bankruptcy order. He held that there was no basis for attacking it. He set out the circumstances that had led to the order, which I have already recited, resulting in an order for costs which was final. The judge then said this:

"In the circumstances, District Judge Freeborough had before him a petition based on a judgment amount of costs which had been duly taxed and which amount Mr Rhodes candidly and fairly admitted he was unable to pay. District Judge Freeborough made a bankruptcy order accordingly.

Mr Rhodes appealed from that order of District Judge Freeborough and the matter came before Mr Justice Lightman on the 23rd April 1998. The appeal was dismissed and, although I have no note of the judgment in the papers before me, it is clear that Lightman J must have been satisfied that there was no valid ground for impeaching District Judge Freeborough's order."

10. So far as I am concerned, here was a final order for costs. There was no appeal against it, nor was one possible. The money was owed and in those circumstances it was inevitable that the bankruptcy order should be made. In those circumstances there were no facts before the judge in which he could come to a conclusion that either of the bankruptcy orders could be annulled.
11. In the appellant's notice Mr Rhodes says that the judge was wrong to go into the merits of the decision as all he had before him was an application to extend time for appealing. That cannot be right. As the judge pointed out there would be no point in extending time if the appeal was bound to fail.
12. Next, Mr Rhodes submitted that the judge's conclusion was flawed as he did not have before him the full facts. He submitted that his debts arose from fraud and corruption, that his position had arisen because of conspiracy and complicity of those who advised him, including corruption of a number of court officers and a firm of accountants. I suspect he believes that it should be remitted back so that the whole matter could be properly investigated. His belief is that because the debts arose way back in 1979 by reason of fraud, and since then he has been the subject of complicity, conspiracy and corruption, that taints the whole proceedings, with the result that the order for costs, and the subsequent bankruptcy orders cannot stand. He is wrong. There is an order for costs against him. It is a final order for costs. There has been no appeal against it. It has not been set aside and he has not applied to set it aside. In those circumstances there is little doubt that the bankruptcy order was properly made upon the facts as they stand.
13. Further, the allegations that have been made were made before the district judge when he made the 1997 order and before Lightman J on the appeal. The orders they made were based on rejection of those submissions. It would now be senseless if they could form the basis of an application for annulment.
14. In my view Mr Rhodes is misguided. When there is a final order for the payment of a sum of money, it means just that. It needs to be paid. If it is not paid then a bankruptcy order is likely to follow. In my view an appeal would not stand any real chance of success.
15. I therefore refuse the application.
(Application refused; no order for costs).