England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION )
ON APPEAL FROM BRADFORD COUNTY COURT
(HIS HONOUR JUDGE SHAUN SPENCER QC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		3rd March 2010

Lord Justice Moore-Bick:

1. This is an appeal from the order of HHJ Shaun Spencer QC given on 23 April 2009 by which he allowed an appeal against the order of District Judge Lawton in the Bradford County Court and dismissed the appellant's claim. The circumstances giving rise to the proceedings are rather unusual, as is the course of the proceedings themselves.
2. The appellant, Mrs Asma Saddique, lived with her husband, Mr Sajid Saddique, in Bradford. Some time ago Mr Sadiq disappeared and has not been heard of since. There are fears that he may have been murdered, and the police are conducting an investigation into his whereabouts and his disappearance.
3. Mrs Saddique believes that some time before her husband's disappearance he transferred substantial sums of money to the first defendant, Ms Saliha Sadiq, for no consideration and that he was therefore entitled to recover the money from her. Mr. Saddique himself was unable to bring the claim so Mrs Saddique applied to the Bradford County Court for an order that she be appointed receiver of his property. On 31 July 2007 District Judge Edwards made an order appointing her "to be a receiver in respect of assets owned by her husband" pursuant to Rule 69.2.
4. On 22  April 2008 Mrs Saddique started proceedings in the Bradford County Court claiming to recover the money paid to the first defendant by her husband. She also made a claim against her husband's business partner, Mr Iqbal, seeking to compel him to account to her for her husband's interest in their partnership. That action was brought by Mrs Saddique in her own name, but in paragraph 2 of her particulars of claim she averred that she had been appointed receiver over her husband's affairs and his property and that any rights of action that he had were vested in her.
5. In June 2008 the first defendant applied to strike out the claim, or in the alternative to enter summary judgment against Mrs Saddique, on the grounds that the claim failed to disclose a cause of action and had no real prospect of success or was an abuse of process because it was "based upon a bold assertion and supposition rather than fact". The real gist of the complaint, as it appears from the supporting witness statements, seems at that stage to have been that the particulars of claim did not contain full details of the appellant's case.
6. The matter eventually came before District Judge Lawton on 7 October 2008. He dismissed the application, allocated the case to the multi-track and gave directions for the service of the defence and other preparations for trial. The first defendant filed a notice of appeal, the main grounds being that the claim was not supported by the evidence and was bad on the facts.
7. On 19 January 2009 the matter came before HHJ Spencer QC. He granted permission to appeal on three grounds, one of which had been raised for the first time at, or perhaps a little before, the hearing before him, namely, that the appointment of the claimant as receiver did not give her authority to bring a claim in her own name. He gave directions which included the service of skeleton argument and ordered that the appeal be listed for hearing on 17 April. There was no attempt to challenge that order.
8. The judge heard the substantive appeal and gave judgment on 23 April. He held that the appointment of Mrs Saddique as receiver did not entitle her to bring an action in her own name to recover the money alleged to be owed to her husband and on that basis he dismissed the claim on the grounds that she had no cause of action. She now appeals against his decision by permission of this court.
9. The grounds of appeal are somewhat diffuse and more in the nature of a skeleton argument. However, in substance they allege, first, that the appellant was entitled as receiver to bring a claim in the name of her husband and did so; second, that in her defence the respondent had admitted that the appellant was entitled to bring the claim; third, that the judge was wrong to give permission to appeal on that ground, or perhaps to hear an appeal on that ground, since the matter had not been argued before the District Judge; and fourth, that instead of dismissing the claim the judge ought to have considered whether some other step could have been taken to save it, in particular whether the appellant could be appointed as representative of her husband under Rule 19.7 and thus allow the proceedings to continue.
10. Mr Pennock on behalf of the appellant has submitted that proceedings were in fact brought by the appellant on behalf of her husband, as the particulars of claim made clear, but in my view that is not correct. The person who brings the proceedings is the person whose name appears on the claim form as claimant. If he or she sues in some special capacity, for example as a personal representative or litigation friend, that should normally be stated as well, but it does not alter the position that the claimant is the person who is the party to the proceedings. That cannot be altered by what is said in the statements of case.
11. In this case the appellant and no-one else is named in the claim form as the claimant; she was therefore the person by whom the proceedings were brought and the person who was seeking to recover from the defendants in her own name. She could not succeed unless she had a legal right to do so.
12. The court has jurisdiction under section 37 of the Senior Courts Act 1981 to appoint a receiver over property where it is just and convenient to do so. A person may be appointed receiver of property for two principal reasons: to safeguard the property pending the outcome of proceedings, or as an aid to execution. The latter does not arise in this case because the appellant had not obtained a judgment. However, it is subject to one point: it is well established that the appointment of a person as receiver does not carry with it the right to sue to obtain possession of the property in question either in the name of the receiver or in the name of the person to whom the property is said to belong. The position is succinctly summarised in paragraph 419 of Halsbury's Laws of England as follows:

"Although a receiver may not generally maintain an action in his own name, since no property is vested in him, yet if he has an independent cause of action, the fact that he is a receiver does not disqualify him for suing."

13. The authority for the first half of that proposition is the case of Re Sartoris's Estate [1892] 1 Ch 11, in particular at page 14. Mr Pennock seeks to rely on the fact that no conditions were attached to the order appointing the appellant as receiver, but, subject to one point to which I shall come in a moment, that does not advance matters if by virtue of her appointment she obtained no title capable of supporting the action.
14. It is quite true that the order made by District Judge Edwards did not attach any conditions to her appointment. Mr Pennock submitted that it is to be read in the context of the supporting evidence which made it clear that the appellant was intending to use the order in order to commence proceedings and therefore as giving her power to do that. In my view, however, one cannot read the order in that way. It is nothing more than an unconditional order appointing the appellant receiver of her husband's assets. If that order carries with it a general authority to commence and conduct proceedings in the name of her husband, it would be equally true of any order appointing a person receiver without qualification. In my judgment one cannot read the order as giving authority to the appellant to sue on behalf of her husband to recover any property to which he may be entitled.
15. On the face of it, therefore, the appellant had no cause of action for the reasons indicated earlier. However Mr Pennock has drawn our attention to the case of McGuin and Fretts (1887) 13 O.R. 699, in which the only reasoned judgment was delivered by Boyd C. In that case an ex parte order had been made in an action against a defendant, by which the receiver was authorised to commence and prosecute an action in his own name. That order was challenged on the grounds that the receiver does not normally obtain title to the assets in respect of which he is appointed.
16. In giving his judgment the Chancellor said this:

"The receiver is the proper person to collect and get in the outstanding debts. Payment to him is the proper discharge of the debt, and where there is no dispute he alone should act in the premises: Wood v Hutchins 2 Beav. 294; Wickens v Townsend 1 R&M 361. But if litigation is needed to recover the alleged debt, it must be prosecuted in the name of the person having title to recover at law. The receiver is no more than officer of the Court who becomes custodian of the assets when received, and has no right to sue in his own for a debt. How can that right be conferred upon him, by an order such as the present, authorizing him to sue in his own name? The usual practice is, in proper cases, to direct the action to be brought in the name of the creditors: see Dacie v John McLel 75. If there is no person in whose name the action can be brought, it may be that there will be jurisdiction to direct the action to be in the name of the receiver, as was suggested by Jessel M.R. in Hills and Reeves 31 W.R. 209 and as appears to be also indicated by the Irish Master of the Rolls in Acheson and Hodges 3 Ir. Eq. R. 522. But apart from special circumstances I find no authority for giving permission to the receiver to sue in his own name in respect of a right of action which is vested in another. In Hills v Reeves sup. the controversy arose between receivers – one of them having done wrong by the removal of important documents, the Court allowed the other receivers to sue the wrongdoer therefor. In ex parte Harris, 2 Ch D 423 the sum claimed was due to the receiver in his capacity of receiver, arising out of his dealings with assets in his hands which he had sold to the debtor, against who he was proceeding. There was direct privity of contract between them."

17. It has been necessary to refer at some length in that passage in order to understand the nature of Mr Pennock's submissions. He relied on the dictum of Sir George Jessel that, if there is no person in whose name the action can be brought, it may be that there will be jurisdiction to direct the action to be brought in the name of the receiver, and submitted that the present case falls within that principle. He urged us to hold that in a case such as the present, where the appellant's husband cannot act on his own behalf, the court has jurisdiction to authorise her as receiver to bring proceedings in his name.
18. This principle, if it exists, is clearly of potentially wide application and, speaking for myself, I would have wished to see the report of Hills v Reeves, which unfortunately has not been made available, in order to understand clearly what Sir George Jessel said and in what context he envisaged that the course to which he refers might be possible. The case has not entirely disappeared from legal notice in the intervening century or so since it was decided, since it is referred to in The Law relating to Receivers, Managers and Administrators, 4^th ed. by Mr Hugh Picarda, but certainly it does not appear to have been considered in any subsequent case and as far as I am aware there is no subsequent authority recognising and giving effect to any such principle.
19. It is interesting to note that in Hills v Reeves itself the proceedings were brought by one receiver against another for an alleged wrong done by that other receiver and so do not appear to fall within the scope of any such principle. Equally, in the other case referred to, ex parte Harris, the receiver clearly had a right of action to recover the debt which was owed to him in his capacity as receiver. We have not had an opportunity to consider the case of Acheson v Hodges, which is the third case to which Chancellor Boyd referred.
20. As I have said, this principle, if it exists, is one of some potential importance and for my own part I would prefer not to express any concluded opinion on the point without hearing much fuller argument. The point does not really arise in this case, however, because no application has been made of the kind to which Chancellor Boyd adverted. No such order has been sought and in those circumstances it is not necessary for us to consider what the outcome might be if such an application were to be made.
21. In all these circumstances the judge was right in my view to hold that the appellant had no right to sue for the disputed debt in her own name and that the claim as constituted was bound to fail. This is not a case in which in my view it would be appropriate at this stage in the proceedings to provide the appellant with a further opportunity to consider whether an order of the kind to which I have referred might properly be applied for.
22. As to the complaint that the judge should not have granted permission to appeal on this point, or should not have allowed this point to be raised, the short answer is the one that he himself gave when objection was taken on the hearing of the appeal, namely, that he had already given permission for it to be raised some three months earlier and no one had sought to challenge that order. Quite apart from that, however, this is a point that did not turn on the evidence before the District Judge and it is very difficult to see how the appellant's position could have been prejudiced by the fact that it was not raised before him.
23. The judge's decision to give permission to allow this point to be raised on appeal was one which in my view was well within the scope of his discretion and cannot properly be challenged at this stage. The appellant and those acting for her had plenty of time to prepare to meet it and cannot have been prejudiced by the order he made.
24. The fact that the respondent had admitted in her defence the allegation contained in paragraph 2 of the particulars of claim is not determinative of the issue, since that allegation was no more than an ill-founded assertion of law. The statement of case is designed primarily to set out the facts which are said to have the legal consequences relied on. If the facts are admitted, there is no issue to which evidence will be relevant and the parties will become bound by the averment and the admission, but an incorrect assertion of law does not bind the parties, much less the court, in the same way.
25. The appellant's final argument is that with a view to securing the overriding objective the judge ought to have allowed the appellant to correct the position in some way, probably by applying for an order that she be appointed representative of her husband in accordance with Rule 19.7.
26. The relevant part of Rule 19.7 provides as follows:

"(1) This rule applies to claims about –

(a) the estate of a deceased person;

(b) property subject to a trust; or

(c) the meaning of a document, including a statute."

27. Clearly neither (a) nor (c) applies to this case. It is said, however, that the respondent holds money on trust for the appellant's husband and to that extent this is a case which concerns property subject to a trust. However, that is in dispute and the fact is that there was no evidence before the court which would enable it to conclude that there is any substance in that argument. In any event, the rule is really designed to deal with a quite different case. Where property is subject to a trust and some of the beneficiaries cannot be ascertained or found, a person can be appointed to represent their interests where they may be affected by the court's decision. That, of course, is not this case, as the judge recognised.
28. In substance the appellant wishes to be given the authority to represent her husband in proceedings to enforce his rights. However, since she has no rights of her own, he would still have to be party to the suit and the action would have to be brought in his name. In effect, what the appellant is seeking is a grant of authority from the court to bring proceedings on behalf of her husband; in practical terms a limited power of attorney, which would enable her to pursue proceedings which he might or might not wish to pursue himself. In my view Rule 19.7 does not give the court power to do that. It simply gives the court power to ensure that persons whose interests are potentially affected by proceedings in relation to trust property are properly represented.
29. For all those reasons I do not think that the action can be saved otherwise than by joining the appellant's husband, which could only be done with his consent. I recognise that the appellant finds herself in a somewhat difficult position and to that extent I have some sympathy for her, but I do not think that any of the methods proposed by Mr Pennock provides a means by which she can succeed in this case, nor do I think the court has the power to provide authority to those who have the interests of others at heart to take proceedings on their behalf without some formal grant of authority.
30. For those reasons I would dismiss the appeal.

Sir Richard Buxton:

31. Like my Lord I would wish to reserve the position in respect of the principle that Mr Pennock sought to extract from the 1887 first instance case in Ontario, McGuin v Fretts. If there is such a principle and I very much doubt that matter, but if there is such a principle it is entirely that it can only operate if a very specific application is made to the court, which would amongst other things have to explain the nature of the action, be limited to a particular set of proceedings and to make it very clear why the relief was required. No such application has been made in this case. Mr Pennock sought to extract from the proceedings leading up to the making of the receivership order a argument that his client had indeed made claim to the court that she wished that relief in order to be able to bring proceedings in respect of her husband's assets. It is quite true that both she and her solicitor, more particularly her solicitor, said something like that, but that of course fell far short of any application of the nature that would be required to meet Mr Pennock's more broad principle and the fact that on the basis of that material the District Judge, no doubt in the middle of a very busy list, made the order does not lead to any of the conclusions as to the construction of that order or to the powers that it gave that Mr Pennock had sought to draw. That is merely a footnote to what my Lord has said and on all the other matters I entirely agree with respect with everything that has fallen from him. I also would dismiss this appeal.

Lord Justice Thorpe:

32. I also agree that this appeal fails for the reasons given by my Lords.

Order: Application refused