England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL
		11/07/2017

Birss J:

1. This is an application by the Defendants to strike out these proceedings pursuant to CPR 3.4. The claim is also said to be totally without merit.
2. The Claimant, Mr Frosdick, is a former bankrupt. He was made bankrupt at the petition of his former solicitors Cobbetts on 25th May 2011 on the order of District Judge Sanghera in the Coventry County Court. The First Defendant Mr Fox was appointed as the trustee in bankruptcy on 20^th September 2011. Before that time the Official Receiver was the trustee. The Second Defendant was the employer of the First Defendant.
3. The Defendants' case is that this action is yet another attempt by Mr Frosdick to re-litigate issues which have already been the subject of claims that he has brought before which have all been struck out or stayed.
4. It is clear that Mr Frosdick has brought a number of claims and applications before various courts over the years since his bankruptcy began and, as I shall explain, it is also clear that the issues to which this claim relates were the subject of some of these earlier claims. However a practical difficulty arises before me in that although various of Mr Frosdick's claims and applications have failed, no record of the reasons why the judges have done what they have done is available. No doubt that is because the judges gave their reasons orally at the time and no one subsequently has sought a transcript of those reasons. Moreover some of the orders which were made may have contained reasons but those orders have not been found and are not available. For this reason among others the Defendants ask that the court gives a reasoned written judgment of this application in order to set out in writing the reasons why Mr Frosdick's claim should be struck out.
5. A very similar claim to the one now brought by Mr Frosdick against the Defendants was brought by Mr Frosdick against the Official Receiver in action HC-2016-001660. In that action the Particulars of Claim were dated 24^th June 2016. Mr Hochhauser QC sitting as a Deputy Judge at the High Court heard an application by the Defendants in that action (that is the Official Receiver and the Secretary of State for Business Energy and Industrial Strategy) to strike it out. In a judgment dated 23^rd November 2016 ([2016] EWHC 3008) Mr Hochhauser QC struck out that action against those Defendants on the basis that there were no reasonable grounds for bringing the claim.
6. At the start of the hearing before me there was an application by Mr Frosdick to join the Official Receiver as a Co-Defendant in this action. The effect of Mr Hochhauser QC's judgment in rejecting what was essentially the same claim brought against the Official Receiver that is now brought against Mr Fox and Baker Tilly, was that the Official Receiver was going to argue that on the Henderson v Henderson basis it would be an abuse of process, regardless of the merits of the claim against Mr Fox and Baker Tilly, for the Official Receiver to be joined into these proceedings. That submission would not require any detailed examination of the merits of the claim against Mr Fox and Baker Tilly, it would simply require a comparison between the allegations made in this action and the claim dismissed by Mr Hochhauser QC. In any event that matter does not arise because over the lunchtime adjournment discussions took place and Mr Frosdick agreed to withdraw his application against the Official Receiver. So the representatives of the Official Receiver left the court and took no further part in the proceedings.
7. I turn to consider the claim against Mr Fox and Baker Tilly. For this I can borrow some of the history which was set out by Mr Hochhauser QC.
8. On 28^th August 2007 the Claimant was involved in a car accident and sustained personal injuries. On 13^th August 2008 he instructed the solicitors Cobbetts on the basis of a Conditional Fee Agreement (CFA) to pursue his personal injury claim.
9. Before Mr Hochhauser QC it appeared that there was a further claim which the Claimant also wished Cobbetts to pursue. That appeared to be so because in later documents the Claimant claims that Cobbetts had behaved negligently relating to a claim for €782,000 losses evidenced by back to back contracts between himself and ZEST Gaming SPA and himself and Stanley Casinos Ltd. In the way the matter has been explained before me, as opposed to before Mr Hochhauser QC, Mr Frosdick states that the claim for €782,000 is not to be seen as a separate claim he wished Cobbetts to pursue but rather as part of his personal injury claim. Mr Frosdick says the contract or contracts referred to related to poker software for which he would have earned that sum in profits but those contracts were breached by being cancelled as a result of his injuries in the car accident. So Mr Frosdick's position is that this is part of the personal injury claim in the sense that the €782,000 sum of money represents damages which could be claimed as a result of the personal injury. The damages also included a further sum estimated by Mr Frosdick to reach €18million. That much larger sum would have been future losses arising out of the failure of the poker software business and is put by Mr Frosdick on the basis of a loss of a chance.
10. In any event at some time prior to 4^th June 2009 Cobbetts indicated that they would no longer handle his claim and, as Mr Hochhauser QC notes in paragraph 6 of his judgment, on 4^th June 2009 Mr Frosdick wrote to Cobbetts in response to the notice terminating the CFA. Mr Frosdick alleged professional negligence against Cobbetts. One of the critical elements of the professional negligence alleged was Cobbetts' alleged failure relating to the €782,000 losses and the €18m losses. That letter does refer to failing to file a protective claim and so it is clear that another way of looking at that protective claim is that it would have been separate proceedings.
11. Before me the significance of whether the larger losses claimed were part of separate proceedings or were part of the claim for damages is not of great importance. But the point is being laboured because in the past there arose a question of whether it was obvious for the face of the CFA that the €782,000 claim could not possibly be covered by the CFA because it was a separate claim from the personal injury claim or whether it was part of the personal injury claim. I do not have to decide that issue in this judgment.
12. The next relevant event was some years later, on 18^th April 2011. At this point Cobbetts presented a bankruptcy petition against Mr Frosdick, as I have mentioned. A bankruptcy order was made on 5^th May 2011. Pursuant to section 306(1) of the Insolvency Act 1986 the Claimant's estate immediately vests in the trustee on his appointment taking effect or in the Official Receiver when the Official Receiver becomes trustee.
13. On 18^th August 2011 the Claimant wrote to the Official Receiver, who had stated 14^th July 2011 he was Trustee, asking him to litigate or to assign back to the Claimant the alleged causes of action against Cobbetts for breach of contract arising from their professional negligence. The first paragraph of that letter is as follows:-

"This letter is to ensure you protect, you litigate, or you assign back to me under 31.9.116 the right of action and to sue Cobbetts LLP under breach of contract for between €782,000 and €17,782,000 being sums due to myself when trading as Parallel during the time I was victim of personal injury 27 August 2007 when liability was admitted and Stanley Casinos Ltd the party in breach of contract admitted their breach causing €782,000 loss was in direct consequence of the personal injury."

14. The letter is four pages long. Although much of it is not easy to follow, included within the letter is a suggestion that there are third party funds available which are expressly being offered to the Official Receiver to purchase from the Official Receiver the ability to sue Cobbetts. The price offered is £75,000.
15. On 25^th August 2011 the Claimant issued a claim against Cobbetts in the County Court. In the bundles there is a Claim Form issued in the Leicester County Court action no. 1IR69849 and Particulars of Claim in that action as well. As I understand it, based on the skeleton argument from the Official Receiver, that action ended on 21^st December 2011 when Coventry County Court dismissed the claim against Cobbetts. It is not possible to identify in the bundles whether I have a copy of the order making that happen and I am certainly unaware what the reasons are. Nevertherless one can imagine that since Mr Frosdick had by then been declared bankrupt the action could not proceed in that manner.
16. In the meantime on 15^th September 2011, following a nomination by a majority of creditors, the Official Receiver appointed the First Defendant Nigel Fox as the Claimant's trustee with effect from 20^th September 2011 and on 11^th October 2011 the Official Receiver wrote to the Claimant to inform him of that appointment.
17. On 9^th January 2012 the Claimant wrote to the new trustee, that is Mr Fox, seeking to acquire in exchange for "substantial third-party funds" the cause of action against Cobbetts. On 18^th May 2012 Mr Fox disclaimed any rights of action and claims against Cobbetts for defamation or any other matter. The reason for the reference to defamation is that Mr Frosdick had included defamation as one of the causes of action he wished to bring against Cobbetts. Mr Curl suggested, I think correctly, that the reason defamation had been mentioned was because it might be regarded as a personal claim to be held by Mr Frosdick rather than a claim which would form part of the estate (see Ord v Upton [2012] 1 WLR 1495 at paragraph 363, referred to by Nugee J in Hayes v Butters [2015] BPIR 287 at paragraph 23).
18. On 25^th May 2012 Mr Frosdick was automatically discharged from bankruptcy. After that he made a number of applications to Coventry County Court to set aside the bankruptcy order. They were all dismissed. A key complaint by Mr Frosdick related to the disclaimer of his potential cause of action against Cobbetts. The point was that Mr Frosdick claims and claimed that the cause of action was worth a very substantial sum of money. It was a claim against the petitioning creditor who put the bankruptcy proceedings in train in the first place. He submits that the trustee, whether it was at the time of the Official Receiver (assuming the OR was formally a trustee at the time) or in any event later Mr Fox, were given proper notice by him Mr Frosdick that he was interested in the property disclaimed.
19. I should also note that Mr Frodick's position is that the Official Receiver did not respond to his letter in August 2011 and that Mr Fox did not respond to the January 2012 letter to him either. There is no suggestion before me that Mr Frosdick is wrong on those two points.
20. Mr Frosdick contends that the effect of section 316(1) of the Insolvency Act 1986 is that the trustee had a period of 28 days beginning on the day when the notice was given to elect whether to disclaim or not and since no disclaimer took place in that period then the property is treated as having been affirmed. It does not matter, argues Mr Frosdick, whether the 28 day period is counted from the first notice to the Official Receiver or the second one to Mr Fox. Since the disclaimer by Mr Fox came more than 28 days after either letter, Mr Frosdick submits it is not effective.
21. Section 316(1) is as follows:-

"Notice of disclaimer shall not be given if

(a) a person interested in the property has applied in writing to the trustee or one of his predecessors as trustee requiring the trustee or that predecessor to decide whether he will disclaim or not, and

(b) the period of 28 days beginning with the day on which that application was made has expired without a notice of disclaimer having been given under section 315 in respect of that property."

22. Mr Hochhauser QC's judgment at paragraph 12 refers to reasons given by His Honour Judge Barker QC in dismissing one of the Claimant's applications on 29^th October 2012. I do not have a copy of those reasons but what Mr Hochhauser QC states is that HHJ Barker QC stated:-

"1. The Appellant's evidence explains that, if about anything, the Appellant's complaint is about the disclaimer of a potential cause of action against the Respondent by the Appellant's Trustee in Bankruptcy"

23. This demonstrates at least that the disclaimer point was in issue before HHJ Barker QC. The Appellant referred to by HHJ Barker QC is Mr Frosdick. The trustee in bankruptcy will be Mr Fox and the Respondent referred to there is Cobbetts.
24. Since that time further applications and claims have been brought by Mr Frosdick without any success. In July and August 2015 the Claimant issued further applications in the Coventry County Court at least two of which were made against the trustee. HHJ Gregory dismissed two applications dated 10^th and 21^st August as totally without merit and noted that on 29^th July an application made by the Claimant was dismissed as totally without merit.
25. On the same day HHJ Gregory made an Extended Civil Restraint Order against Mr Frosdick the effect of which was to restrain him from issuing claims or making applications in any County Court concerning any matter involving or relating to or touching upon or leading to the proceedings in which the Extended CRO was made without first obtaining permission.
26. That Extended CRO remains in effect until 26^th August 2017, as Mr Hochhauser QC explains. Notwithstanding the Extended CRO, on 21^st September 2015 the Claimant sought to issue proceedings against the trustee in the Coventry County Court. It appears HHJ Gregory refused permission to bring that claim twice.
27. In March 2016 the Claimant sent a letter before claim to the Official Receiver and there was further correspondence between the Claimant and the Official Receiver. The Claimant seems to have made a further attempt to issue proceedings in Coventry County Court which HHJ Gregory refused on 31st March 2016, although it is not clear who the intended Defendant in those proceedings was.
28. Mr Hochhauser QC explains that on 13^th April 2016 the Official Receiver responded to the Claimant's correspondence explaining: that the Official Receiver could not consider the complaints made about the trustee Mr Fox; that the Official Receiver did not accept there was a valid claim to be made against Cobbetts; and that the Official Receiver did not consider that there had been any inappropriate deviation from the Insolvency Service's Technical Manual in the case; but in any event such deviation would not give rise to a legal claim.
29. Although it is not clear I will assume, as Mr Frosdick tells me, that the point about the Technical Manual arose as follows. There is no question that the letters sent by Mr Frosdick to the Official Receiver or the trustee in which Mr Frosdick explains his interest in the claim against Cobbetts and asks to have the claim assigned back to him (in the case of the Official Receiver for £75,000 and in the case of the trustee for a "substantial sum") were not in the proper form prescribed by the Insolvency Rules for a notice under s316 of the Insolvency Act 1986. The relevant rules are the Insolvency Rules 1986, which in fact are no longer the current rules but that does not matter. Under the 1986 rules, Rule 12A.30 provides that forms can be prescribed in schedule 4 and Form 6.62 is prescribed there. The argument was that pursuant to the Technical Manual if the Insolvency Service received a letter which was not in the proper form they should respond to the person sending it in and tell them that the proper form is required.
30. In May 2016 the Claimant issued another claim relating to the disclaimer. This action was brought against the Official Receiver in the High Court and is the one which was dealt with by Mr Hochhauser QC and struck out. In his judgment Mr Hochhauser QC did not have to deal with the disclaimer itself because that was not something done by the Official Receiver, it was done by Mr Fox. However Mr Hochhauser QC did need to explain the point about section 315 and 316 of the Insolvency Act 1986 and how they fitted into this case. When doing so the judge said as follows:-

"33. At paragraphs 38 and 39 of the Particulars of Claim reliance is also placed on ss. 315 and 316 of the Act, which dealt with disclaiming onerous property. I cannot see how those sections assist the Claimant. Onerous property is defined in section 315(2) as "(a) any unprofitable contract, and (b) any other property comprised in the bankrupt's estate which is unsaleable and or not readily saleable, or is such that it may give rise to a liability to pay money or perform any other onerous act." An obvious example is a lease which forms part of the bankrupt's estate."

31. The judge then noted that under s315 a trustee may, by giving prescribed notice, disclaim any onerous property and that once notice was given the disclaimer discharges the trustee from personal liability in respect of that property. The judge then set out s316(1) and at paragraph 35 he said as follows:

"35. I cannot see how the potential claim against Cobbetts can constitute, "onerous property", but in any event in my judgment there is no complaint that can be made about the conduct of the OR. Insofar as it may be alleged that Mr Fox was not entitled to issue the notice of disclaimer on 18th May 2012 by reason of the Claimant's letter to the OR dated 18^th August 2011, that is not a claim that can be brought against the OR and must fail. In this respect I would refer to the reasons given by HHJ Barker in his Order dated 29 October 2012, set out in paragraph 12 above."

(my emphasis).

32. I have mentioned already that the only copy of HHJ Barker QC's reasons that I have is what is said in Mr Hochhauser QC's judgment. The significant point for present purposes is that the judge decided that since it was Mr Fox who had disclaimed the cause of action against Cobbetts that was not something that could be held against the Official Receiver. That makes sense. However Mr Frosdick has taken on board what the judge said in paragraphs 33 and 35 that I have quoted above, that he, the judge, could not see that the potential claim against Cobbetts could be "onerous property" which could be disclaimed.
33. Mr Frosdick has therefore brought these proceedings not against the Official Receiver but against Mr Fox, who is after all the trustee who did issue the notice of disclaimer. However Mr Curl who appears for Mr Fox and Baker Tilly explains that regrettably and no doubt because Mr Hochhauser QC did not need to be assisted on this matter, the judge is wrong in his judgment in expressing any doubt that the claim against Cobbetts could be "onerous property" under section 315. Mr Curl submits that there is clear authority that a cause of action can fall within section 315 if it is part of the bankrupt's estate and can be disclaimed.
34. For that Mr Curl relies on the judgment of Pumfrey LJ in Khan-Ghauri v Dunbar Bank [2001] BPIR 618 and in particular the passage at page 621-622 of the report in which the judge considered whether causes of action could be disclaimed and therefore if they could whether they could be the subject of an application to re-vest disclaimed property under section 320 of the Insolvency Act. Pumfrey LJ held that the causes of action in that case were part of the bankrupt person's estate and therefore vested in the trustee on the trustee's appointment. They could have been disclaimed and if they had been an order under s320 was possible. But on the facts the causes of action had not been disclaimed and remained vested in the trustee. Therefore no re-vesting order under s320 could be made.
35. Mr Curl also referred to the decision of Mann J in Young v The Official Receiver [2010] BPIR 1477 and in particular at paragraph 32. There the judge clearly took the view that a cause of action could be disclaimed although he did not have to decide the question given the way the matter was argued in front of him.
36. It is fair to say that neither the decision of Pumfrey LJ nor of Mann J involved a case in which a trustee had in fact disclaimed a cause of action nevertheless Mr Curl submits that these are clear authorities which show that a cause of action which is part of the estate which vests in the trustee is capable of falling within s315 as "onerous property". Therefore a cause of action can be disclaimed by the trustee in appropriate circumstances. In my judgment that is right and I will add only a few further words of my own to the cases already cited.
37. Section 283 of the Insolvency Act defines a bankrupt's estate in wide terms (as Pumfrey LJ pointed out at page 621) and section 306 vests the estate in the trustee on his being appointed. The definition of the estate in section 283 is given using the expression "property". The cause of action in issue here is a claim for professional negligence against Mr Frosdick's former solicitors. I am sure that such a cause of action is capable of being "property" within section 283 and I am sure it vests in the trustee at the appropriate moment. There is no reason why a cause of action should not also be "onerous property" under section 315 unless the terms of that section exclude it from that definition.
38. Section 315(2) defines "onerous property" as any unprofitable contract in sub-section (a) or, in sub-section (b), as "any other property comprised in the bankrupt's estate". That latter definition in sub-section (b) is qualified in that the property either has to be unsaleable or not readily saleable or it has to be "such that it may give rise to a liability to pay money or perform any other onerous act". A cause of action seems to me to be a good example of something which may give rise to a liability to pay money, since a claimant who brings a claim may incur their own legal costs in doing so and risks being ordered to pay their opponent's costs if the claim fails.
39. Accordingly in my judgment paragraph 35 of the judgment of Mr Hochhauser QC was in error in suggesting that Mr Frosdick's potential claim against Cobbetts might not constitute onerous property. As I have mentioned already, it appears the relevant principles and cases were not cited to the judge at the time because it was not necessary to do so in order to address the issues before him. That does not mean that anything else about Mr Hochhauser QC's judgment is undermined. The point makes no difference to the conclusion the judge reached.

Reasonable grounds for bringing this claim

40. The question I have to address is whether this action which is brought against Mr Fox and Baker Tilly discloses reasonable grounds for bringing the claim. Mr Curl says it does not for essentially three reasons. The first is that it is the same as actions which have already been struck out or dismissed by previous judges. Second is that the letters sent by Mr Frosdick to the Official Receiver and to Mr Fox which are said to constitute notice under section 316 are not capable of being operative notices under that section given the vague way in which they are drafted and because they are not in proper form. Mr Curl tells me, although he accepts that he cannot point to a document to back this up, that from his recollection District Judge Sanghera struck out one of Mr Frosdick's applications on the basis that the letters were not in the proper form of notices under section 316.
41. Third Mr Curl submits that in any case regardless of the form, as a matter of substance under s316 Mr Frosdick is not a person interested in the property and so he cannot serve a notice of the relevant kind. That is because by that time the property has vested in the trustee. Mr Curl submits the section of the Insolvency Act is quite explicit that the person who must give such a notice is a person interested, in other words a person with an actual interest at the time. It is not satisfied by a person with a mere claim to be interested, particularly when that claim is without foundation because the property has vested in the trustee. The language "claims an interest" is notable in that it is used in section 320(2)(a) in relation to one of the kinds of person who can apply for a re-vesting of disclaimed property but is not used in s316. Mr Curl submits that this difference in language makes sense and reinforces the correct construction of s316. He submits that the difference in drafting is to allow a wider class of persons to apply to the court for a re-vesting order under s320(2)(a) than those entitled to give an effective notice to the trustee under s316.
42. As examples Mr Curl suggests that a landlord for a bankrupt would be someone who had an interest in property which might be part of the bankrupt's estate. Another possible example might be the spouse of a bankrupt who may have an interest in a shared residence. In any case, submits Mr Curl, the one person who is and should be definitely excluded by s316 is the bankrupt himself or herself. There is no good reason why a bankrupt should be entitled to serve a s316 notice since they can have no interest in the property.
43. Mr Curl also submits that even if the notices were or should be regarded as having been effective under s316 the fact remains that the cause of action was disclaimed by the trustee under s315 and that pursuant to rule 7.55 of the Insolvency Rules 1986, even if the disclaimer was formally flawed, that does not mean it was ineffective and the disclaimer has taken place. Mr Frosdick's remedy should be to bring a re-vesting application under section 320 but he has not done that.
44. Mr Curl referred to the decision of Treacy J in Young v Hamilton in the High Court in Northern Ireland [2010] BPIR 1468 at paragraph 33, as follows:-

"Where a trustee in bankruptcy disclaims an asset (including a cause of action) there is no provision whereby that asset automatically re-vests in the bankrupt. As explained by Mr Lunn under s320 the first plaintiff could have applied to the court having conduct of the bankruptcy for the disclaimed property to be re-vested in him. Under s6.186 of the Insolvency Rules 1986 any application for a vesting order must be made within 3 months of the applicant becoming aware of the disclaimer. Mr Young did not make any such application. Any disclaimed asset which is not subsequently the subject of a vesting order becomes bona vacantia and is liable to be dealt with accordingly. Mr Lunn was correct to observe that in the absence of such application the first plaintiff was not entitled to pursue this litigation."

I should say that the first plaintiff was Mr Young who was the bankrupt and Mr Lunn was the Official Receiver and trustee ex-officio of the estate.

45. Mr Frosdick explains that he had not made an application to re-vest because the claim against Cobbetts was time barred because it arose from events in 2009. Mr Frosdick thought the time limitation period would be three years and therefore he said the reason why he did not make a re-vesting application in 2012 after the claim had been disclaimed. Mr Curl submitted that the relevant limitation period was actually six years but that this made no difference as the claim would now be time barred either way.
46. Mr Curl also submits that the claim against Cobbetts itself has no merit in any event and for that reason the action should be struck out. The potential claim is not well explained in the letters and contains elements which seem highly unlikely to be well founded but I agree with Mr Frosdick that I do not have the material before me to analyse whether it is right or wrong to say that the claim against Cobbetts is so bad that Mr Frosdick cannot have lost anything if he has lost the ability to bring that claim. I am not in a position to decide this strike out application by making a proper determination of the merits of the claim against Cobbetts.
47. Another matter that Mr Curl raises is that the disclaimer would have been an exercise of the trustee's discretion and the court does not lightly give permission under section 304(2) of the Insolvency Act to allow for a claim for compensation to be brought against a trustee under section 304. So Mr Curl submits a further reason why this action should be struck out is because Mr Frosdick will never get permission under section 304 to bring it in the first place.
48. Mr Curl refers to Brown v Beat [2002] BPIR 421, Hart J, and also to the decision of Chief Registrar Baister in Re Borodzicz [2016] BPIR 24 which analysed the decision of Hart J as well as a number of other cases. The point made by Hart J in Brown v Beat was that applications by bankrupts against their trustees may well have a tendency to be vexatious and that it is appropriate therefore for there to be a filter, which is the reason for the requirement for permission under section 304(2).
49. I was also referred to another passage in Re Borodzicz (at paragraph 35) in which the Chief Registrar sets out a passage from the judgment of the Court of Appeal in Maguire v Rose [2013] EWCA Civ 429 which identified from the judgment of Hart J that (i) whether or not a reasonably meritorious cause of action has been shown and (ii) whether giving permission for its prosecution is reasonably likely to result in a benefit to the estate, are two central factors in the analysis under s304(2). The Court of Appeal in Maguire explain that those two factors may well be sufficient in many cases to demonstrate that a proposed cause of action is worthwhile but they are not the only factors to be taken in to account.
50. Mr Curl also referred me to paragraph 36 of Re Borodzicz and the longstanding principle, which I accept, that the court should be slow to interfere with decisions of a trustee about the administration of a bankruptcy (there citing Re A Debtor, ex parte the Debtor v Dodwell (the trustee) [1949] Ch 236).
51. Finally on this topic Mr Curl referred me to paragraphs 56-58 of Chief Registrar Baister's judgment in Re Borodzicz which distinguished between an issue which involved analysing the exercise of a discretion by the trustee for which there will be a strong presumption against permission and an issue of the authority of a trustee to act, in which different questions might arise.
52. Mr Frosdick's case is essentially that his letters in August 2011 or January 2012 should be regarded as notices under s316 and therefore, in relation to the first letter, the 28 day period started to run and the Official Receiver did not disclaim that property at that time. If that is right then the second trustee Mr Fox should not have done so. Or, if the second letter is to be regarded as the important one, it also should be regarded as a notice under s316 and the 28 day period counted from that had still expired before the disclaimer by Mr Fox took place. Therefore Mr Fox's disclaimer was contrary to the section.
53. Mr Frosdick points out that the disclaimer was of a cause of action to sue Cobbetts who were the petitioning creditors in the first place and that it occurred only a few days before the bankrupt himself was discharged.
54. When I asked Mr Frosdick what his view was as to why his attempts to bring this matter to the court before had failed so often, he said that this was due to his inexperience and his inability to explain matters to the judges.
55. As regards the point of law raised by Mr Curl about the effect of s316 Mr Frosdick says that he is a person who claims to be interested in the property and that is enough to satisfy s316. He says that the offer of £75,000 was never communicated to the creditors and it should have been accepted. He says the disclaimer was in effect a fraud on his creditors because it was a valuable asset in his estate which was not realised and his creditors were never told about it.
56. A copy of the final report to the creditors which was produced by Mr Fox was not in evidence. At the hearing I was told by counsel that it was highly probable that the report referred to the disclaimer, however on checking after the hearing Mr Curl informed me that the disclaimer was not mentioned in the report. In any event there was no suggestion on the trustee's behalf that the report referred to the supposedly offered sum of £75,000 for the cause of action in the first place, because that offer was made in a letter to the Official Receiver and not to the trustee nor was it suggested that the final report referred to the "substantial third party funds" which were said to be available in return for assigning the right of action to sue Cobbetts in the letter to Mr Fox.
57. Mr Frosdick refers to Mulkerrins v PriceWaterhouseCoopers [2003] UKHL 41. In this case there was a dispute about whether a cause of action vested in a trustee in bankruptcy or in the Claimant, a bankrupt. Mr Frosdick referred to the judgment of Lord Millett at paragraph 3 which records that Ms Mulkerrins had been shamefully ill served by her former advisors by the law of insolvency and by the civil justice system and to paragraph 14 in which Lord Millett pointed out that it was now well established that a trustee may properly discharge his duty to obtain the best price for the assets of a bankrupt's estate by assigning a bankrupt's claim against a third party. Mr Frosdick also referred to Sebry v Companies House [2016] 1 WLR 2499 and the judgment of Edis J which related to the responsibility of someone acting pursuant to a contractual duty or a statutory function. In my judgment neither Sebry nor Mulkerrins have a direct significance to the issues I have to decide.

After the hearing

58. After the hearing Mr Frosdick wrote to me a letter dated 23^rd June 2017. In the letter Mr Frosdick repeated his fundamental complaint that the trustee ought not to have disclaimed his cause of action against Cobbetts and submitted that the argument made in the strike out application, that Mr Frosdick was not a "person interested" under s316, was not aligned with this allegation. He submitted that bearing in mind the overriding objective, his claim should be allowed to proceed and that since no defence has been filed the defendants are in default of defence.

The merits of Mr Frosdick's claim

59. With that lengthy introduction I can now address the merits of Mr Frosdick's claim. It is true, as Mr Curl submits, that Mr Frosdick's letters of 11^th August 2011 and 10^th January 2012 to the Official Receiver and Mr Fox are not clearly written. They include statements about what may happen in the future. In particular the letter of January 2012 is written as if Mr Fox is not yet the trustee in bankruptcy whereas in fact he was.
60. Nevertheless it seems to me that it would be clear to a reasonable reader of those letters that at least one thing Mr Frosdick was seeking to do was to give notice under s316 in order to seek to trigger the 28 day period which applied under the Insolvency Act 1986. Section 316 is expressly referred to in the 11^th August 2011 letter at page 2 and the 28 day period is referred to in the 10^th January 2012 letter on page 1. While recognising that a form is prescribed under the Insolvency Act and the Insolvency Rules 1986 and these letters are not in proper form, I am reluctant to decide this case merely based on the forms.
61. However in my judgment Mr Curl is right that the correct interpretation of s316 of the Insolvency Act 1986 is that the bankrupt himself cannot make a valid application under the section in relation to property which is within the bankrupt's estate and has vested in the trustee. This is for the following reasons.
62. The "interest" referred to cannot be mere intellectual curiosity, it must be some sort of interest recognised in law. (This is not a case in which any distinction between legal as opposed to equitable or beneficial interests makes any difference.) The effect of the automatic provisions in section 306 of the Act is to vest any interest that the bankrupt had in the property in the trustee.
63. I do not need to explore Mr Curl's submission about the difference in wording between s316 and s320(2)(a) any further than the following. No doubt the language of s320(2)(a) permits a person with a bona fide claim to an interest in the disclaimed property to apply to the court and engage the court's jurisdiction. That makes sense. I also note that in the passage cited above from Young v Hamilton Treacy J considered that the bankrupt could make an application under s320 although the judge there did not have to examine which limb of s320(2) the bankrupt would fall into. That may indicate that "claims an interest" under s320(2)(a) also covers a person who does not at the time have an interest in the property but wishes to obtain such an interest. However whatever the scope of s320(2)(a), it is obvious that s316 uses narrower language. Only "a person interested in the property" can apply.
64. In my judgment a person who actually has an interest known to the law in the putative onerous property can make a s316 application and trigger the 28 day period. What kind of relationship the person needs to have with that interest which would be sufficient to allow them to make an effective application to the trustee under the section is not a question I have to decide beyond the following. In my judgment, the one person who cannot be "a person interested" in the property is the bankrupt himself or herself. The bankrupt is not a person interested in the property at all as a result of the automatic vesting. Section 316 is not there to protect bankrupts, it is there to protect other persons who have, or (perhaps) may have, an interest in property which is subject of the insolvency.
65. On that basis therefore neither letter sent by Mr Frosdick was effective to start a 28 day period running. It follows that the disclaimer by the trustee on 18^th May 2012 was something that was within the trustee's powers to do and there is no question mark over the trustee's authority to act. The only tenable way in which Mr Frosdick could bring an action against the trustee would be to challenge the exercise of his discretion. I am quite satisfied that no proper grounds have been provided which would justify giving permission to bring such a claim, bearing in mind the high hurdle which Mr Frosdick would have to get over to get permission to do so under section 304(2) of the Insolvency Act.
66. Accordingly this action has no reasonable prospect of success and I will strike it out under CPR 3.4. The action will be dismissed.
67. It is not possible to say whether any of the previous attempts by Mr Frosdick to sue his trustee, Mr Fox, or Baker Tilly have failed for the same reason. Indeed I have the impression from Mr Curl that the ground on which I am rejecting Mr Frosdick's claim is not the ground on which previous attempts have foundered. Although it is clear that these proceedings are an attempt to re-litigate matters which have been struck out before, since I do not have a clear statement of what the reasons why these previous actions were struck out were, I should not strike this action out on a separate ground that it is an attempt to re-litigate points.
68. I am asked to strike this out the basis that it is totally without merit and to make a further CRO against Mr Frosdick covering the High Court. I do not believe it would be appropriate to characterise this application as totally without merit for the following reasons. First although it is true that had this claim had been brought in the county court, it would have been a breach of the Extended CRO, the claim was triggered by the statement in the decision of Mr Hochhauser QC which I have found to be in error. It is difficult to criticise Mr Frosdick for bringing a claim on the basis that that statement was right even though I have found it was wrong. Second, as far the researches of counsel have been able to show the point on which I have decided this case has not been decided before. Third, the proceedings against the Official Receiver struck out by Mr Hochhauser were not characterised as totally without merit. Fourth, it has not been possible or practical to provide me with the reasons for the previous decisions in the county court, albeit it is clear they related to the same general issue.
69. Nevertheless it is clear that Mr Frosdick has made multiple unsuccessful applications to the courts relating to the same issues in the past. He should not start doing that again after this judgment, otherwise a further Civil Restraint Order is likely to be appropriate.