HHJ Paul Matthews :
Introduction
1. This is my judgment on an application by Mr Christopher Reynard (“the applicant”) for permission to bring a claim under section 304 of the Insolvency Act 1986. It is the latest in a series of legal proceedings in which he seeks to make claims against Mr Nigel Fox (“the respondent”). In light of the previous proceedings, I have dealt with the application on paper under CPR rule 23.8, in order to save time and cost. I have had the benefit of written submissions from the applicant, both in a skeleton argument dated 4 January 2018 and also in an email dated 11 July 2018, from Mr Siward Atkins, counsel for the respondent, dated 19 July 2018, and also submissions in reply from the applicant, dated 23 July 2018.
2. The short history of the matter is as follows. I can begin with a paragraph from my own judgment of 8 March 2018 (in which the present applicant is referred to as the claimant, and the present respondent as the defendant):
“2. The claimant is a former ski tour operator, who had the misfortune to be adjudicated bankrupt on 1 October 2012. The defendant, an insolvency practitioner and a partner in accountants Baker Tilly, was appointed trustee in bankruptcy on 24 July 2013. A large house in a large estate, known as Idehill Lodge, Farway, Cornwall (“the property”), was sold on 14 April 2016 by NRAM as mortgagee for £1,020,000. The claimant says that this price was a significant undervalue. The claimant says that he had significant claims against two accountants who were former advisers, Thomas Westcott and Stephen Marlow. He sought the assignment to himself from his trustee in bankruptcy of those claims for a nominal amount. The defendant trustee in bankruptcy refused.”
The s 303 claim
3. In April 2015, the applicant applied to the court under section 303 of the Insolvency Act 1986, for an order that the respondent should nevertheless make the assignment sought. That application was dismissed in November 2015, and an application to set aside the dismissal was likewise dismissed in March 2016, as was an application for disclosure. Those orders were similarly the subject of an application to set aside, but this was dismissed. In November 2016, applications for permission to appeal against both dismissals were refused by HHJ McCahill QC, in a detailed judgment running to 189 paragraphs. That judgment is crucial to what follows.
The common law claim
4. In April 2017, the claimant issued a further claim against the respondent for damages for breach of contract and negligence in relation to the conduct of the defendant as his former trustee in bankruptcy. The claim was the subject of some procedural confusion, being transferred from the CCMCC (where it was issued) to the County Court at Bristol (where the applicant sought to have it transferred back, and directions were made for the resolution of that application), but was also struck out by a Deputy District Judge on the application of the respondent (unaware of the directions already made).
5. Eventually, the matter came before me. The question whether the claim should be allowed to continue or struck out was argued at two hearings in December 2017 and January 2018. I gave a reserved judgment striking out the claim in March 2018: see [2018] EWHC 443 (Ch). I struck out that part of the claim which sought to recover losses for the bankrupt estate on the basis that such losses could only be the subject of a claim under section 304 of the Insolvency Act 1986. I struck out the part of the claim which sought to recover losses personal to the applicant on a mixture of grounds, including that the claims could not succeed and also abuse of process in seeking to relitigate matters which had already been decided against him in the earlier litigation, and in particular in the judgment of HHJ McCahill QC. The applicant subsequently sought permission to appeal my judgment, which on consideration I refused: see [2018] EWHC 710 (Ch). So far as I am aware, no application for permission to appeal has been made to the Court of Appeal.
6. In submissions on consequential matters, the respondent invited the court to make an extended civil restraint order against the applicant. In my judgment on those consequential matters ([2018] EWHC 710 (Ch), [20]-[22]), I did not immediately deal with that invitation, but sought written submissions on this question. I received and considered those submissions, and decided to make an extended civil restraint order for two years from 19 April 2018: see [2018] EWHC 878 (Ch). I subsequently refused permission to the applicant to appeal against the imposition of this order. (However, I also later decided that the present application was not caught by the order, having been filed in January 2018, some three months before the order was made.)
The present application
7. Before I struck out the claim, however, the applicant also made the present application for permission to make a claim under section 304 of the 1986 Act. The significance of the timing of the application will become apparent later. In the aftermath of my judgment in March 2018, the court overlooked the existence of this application, and the copy I have seen on the court file is not sealed to show it has been issued. I am not sure when I was first made aware of it. It may have been the applicant’s own letter to the court of 5 April 2018 which alerted me to it. The respondent was however completely ignorant of the existence of this application, presumably because it had never been served on the respondent. On 6 July 2018 the court sent an email to the parties concerning this application, and in particular inviting written submissions. As stated above, I received those submissions, and I now proceed to determine the application for permission.
8. The application notice in form IAA, sent to the court dated 17 January 2018, and received on 18 January, is expressed to be made “under section 303 and/or 304 of the Insolvency Act 1986 AND/OR under rule 1.35 of the Insolvency (England and Wales) Rules 2016”. In this application the claimant seeks “the court’s permission to issue proceedings against my previous trustee in bankruptcy Nigel Fox for his negligence in the administration of my bankrupt estate”. He relies on his “witness statement” dated 4 January 2018 “and in particular paragraph 4”. I was unable to find a witness statement from the claimant dated 4 January 2018. However, the claimant confirmed subsequently that he meant to refer to a document of that date called “skeleton argument”, which I do have, and a few paragraphs of which deal with the claim under s 304. There is in fact no evidence (in the normal sense of the word) filed in support of the application. I will return to the question of evidence later.
The law
9. Section 304 of the 1986 Act provides as follows:
“(1) Where on an application under this section the court is satisfied –
(a) that the trustee of a bankrupt’s estate has misapplied or retained, or become accountable for, any money or other property comprised in the bankrupt’s estate, or
(b) a bankrupt estate has suffered any loss in consequence of any misfeasance or breach of fiduciary or other duty by a trustee of the estate in the carrying out of his functions,
the court may order the trustee, for the benefit of the estate, to repay, restore or account for money or other property (together with interest at such rate as the court thinks just) or, as the case may require, to pay such sum by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just. This is without prejudice to any liability arising apart from this section
(2) An application under this section may be made by the official receiver, the Secretary of State, a creditor of the bankrupt or (whether or not there is, or is likely to be, as surplus for the purposes of section 330 (5) (final distribution)) the bankrupt himself. But the leave of the court is required for the making of an application if it is to be made by the bankrupt or if it is to be made after the trustee has had his release under section 299.
[ … ]”
10. The Insolvency (England and Wales) Rules 2016, rule 12.191 provides:
“The provisions of the CPR … apply for the purposes of proceedings under Parts 1 to 11 of the Act with any necessary modifications, except so far as disapplied by or inconsistent with these Rules.”
11. CPR rule 23.7 provides, so far as relevant:
“(2) If a copy of the application notice is to be served by the court, the applicant must, when he files the application notice, file a copy of any written evidence in support.
(3) When a copy of an application notice is served it must be accompanied by –
(a) a copy of any written evidence in support; and
(b) a copy of any draft order which the applicant has attached to his application.”
12. Rule 32.6 provides:
(1) “(1) Subject to paragraph (2), the general rule is that evidence at hearings other than the trial is to be by witness statement unless the court, a practice direction or any other enactment requires otherwise. IL PROCEDURE RULES
(2) At hearings other than the trial, a party may, rely on the matters set out in –
(a) his statement of case; or
(b) his application notice, if the statement of case or application notice is verified by a statement of truth.”
13. The test for the application of section 304 has been the subject of discussion in the cases. In McGuire v Rose [2013] EWCA Civ 429, Laws LJ, giving the judgment of the court, said:
“21. The proper test which Miss Start said should be applied to applications for permission under section 304 is that set out by Hart J in Brown v Beat [[2002] BPIR 421], and cited by Lewison J at paragraph 18 of his judgment:
‘The factors which the court must bear in mind in deciding whether or not to grant permission are, first, whether or not a reasonably meritorious cause of action has been shown and, secondly, whether giving permission for its prosecution is reasonably likely to result in a benefit to the estate.’
22. Miss Start says that that was the test, and the judge should have applied nothing else. In fact he wrongly brought in additional factors, and particularly in his paragraph 49 when, having referred to the absence of a surplus, he added his reference to Mr McGuire's inability to conduct litigation properly (see above). That, she said, went outside the proper test and was an error of principle.
23. We do not agree. Hart J cannot be taken as having laid down any particular test. It would not be appropriate for the court to lay down exclusive criteria by reference to which an application by the bankrupt under section 304(2) had, in all cases, to be judged. He was doing no more than identifying two central factors which have to be taken into account (and obviously so). That is quite apparent from the context of his judgment. In the immediately preceding paragraph to that in which the words cited appear he referred to the policy behind the leave requirement in section 304(2), namely to apply a filter because of the risk of vexatious applications. The risk of vexation in the proceedings is therefore obviously another matter which can, and in our view should, be taken into account, though a favourable answer to Hart J's two questions may well be sufficient in many cases to demonstrate that the particular course of action proposed by the bankrupt is worthwhile and not driven by vexation. Furthermore, at page 427 Hart J returned to the point and described a different test, or perhaps an umbrella test under which his two more specific questions should be asked. At page 427B he said:
‘An application for leave under a Grepe v Loam order or under section 304(2) stands on a somewhat different footing from the normal case of a final decision on a trial inter partes. It is not final in the sense that nothing in practice can prevent an application being renewed. It is also different in that the criteria being applied by the court in deciding whether or not to grant leave are those that I have mentioned, namely is there material produced on the application such as would justify a reasonable litigant pursuing the particular litigations proposed?’
As a sort of umbrella test that must be unobjectionable. It coincides with the description of the test proposed by Blackburn J in Re Hellyer (a Bankrupt) [1998] BPIR 695 at 696C in considering whether or not to allow an application which would otherwise have been barred by a Grepe v Loam order (the precursor of civil restraint orders). We cannot see anything wrong with that as a requirement. Hart J himself referred to the Hellyer test at page 424, and added:
‘That criterion of reasonableness has, of course, to be stretched to include the factors which I have mentioned, that is to say, the likelihood of success, and the risks as to costs of the estate in the event of failure.’
All this points to a test which is wider than the two criteria relied on by Miss Start.
24. Furthermore, in Parkinson Engineering Services PLC v Swan & another [2010] BPIR 437 Lloyd LJ expressly said that the two requirements were not exhaustive, albeit in the context of section 212 of the Insolvency Act:
‘The judge started by considering whether or not it would be appropriate to allow proceedings under section 212. It seems to me that this was the correct starting point. He had seen (as we did) the decision of Hart J in Brown v Beat [2002] BPIR 421, where the judge, considering the corresponding provision as regards bankruptcy, identified two criteria: whether or not a reasonably meritorious cause of action has been shown, and whether giving permission for its prosecution is reasonably likely to result in a benefit to the estate. Those are not exhaustive but they are certainly relevant and likely to be among the most important factors. They are relevant here, together with the question of delay.’
25. All this shows that Lewison J was right to take into account Hart J's two criteria, together with such further other factors as seemed to be relevant. ”
14. In Borodzizc v Horton [2016] BPIR 24, Chief Registrar Baister cited that passage from McGuire v Rose , and, after referring to counsel’s submissions, said:
“I think it is thus also common ground that I have to consider first whether the applicant has a reasonably meritorious cause of action, second whether prosecuting the proposed application is reasonably likely to benefit the estate and then consider any other relevant factors.”
He also went on to say:
“36. Although every bankruptcy is under the control of the court (section 363 Insolvency Act 1986) there is a long-standing principle that the court should be slow to interfere with decisions of a trustee about the administration of the bankruptcy with which he is charged.”
15. The Chief Registrar then referred to the decision of Harman J in Re a Debtor, ex parte the Debtor v Dodwell (the Trustee) [1949] Ch 236. That judge held that the fact that the court had power to interfere to control the actions of the trustee in bankruptcy would not
“entitle the bankrupt to question the exercise by the trustee in good faith of his discretion, nor to hold him accountable for an error of judgment. Administration in bankruptcy would be impossible if the trustee must answer at every step to the bankrupt for the exercise of his powers and discretions in the management and realisation of the property.”
16. The Chief Registrar also referred to the effect of section 299 (5) of the 1986 Act, dealing with the effect of a release of the trustee in bankruptcy under that section. That subsection provides:
“Where the official receiver or the trustee has his release under this section, he shall, with effect from the time specified in the preceding provisions of this section, be discharged from all liability both in respect of acts or omissions of his in the administration of the estate and otherwise in relation to his conduct as trustee. But nothing in this section prevents the exercise, in relation to a person who has had his release under this section, of the court’s powers under section 304.”
17. The Chief Registrar continued:
“43. The consequences of release spelled out in subsection (5) are far-reaching. That point is emphasised by the judgment of Walton J in In re Munro and another ex parte Singer v Trustee in Bankruptcy [1981] 1 WLR 1358 at 1362G (in relation to section 93 (3) of the Bankruptcy Act 1914):
‘What is in my judgment crystal clear is that upon a true construction of section 93 (3), which interestingly does not ever appear to have been previously construed, … it appears to me that the intention of that subsection, and it is a very right, proper and wholesome intention, is to wipe the slate completely clean so far as the trustee is concerned, so that he may thereafter pay no thought to the previous course of his actions as to the trustee in bankruptcy’.
(Section 93(3 ) of the 1914 Act differs from section 299 (5) in wording, but its thrust and effect are the same.)”
18. Later on in his judgment, the Chief Registrar returned to this point, in saying this:
“55. … I also take into account, as I think I must, [counsel’s] submission as to the effect of and policy underpinning the respondent’s release. Whilst Walton J was concerned with the different section of a different act That, his judgment is nonetheless a clear expression of the purpose of release that must be as good today and in the present context as it was when he made it in the context of the Bankruptcy Act. The proviso contained in the last sentence of section 299 (5) militates against the absolute terms in which Walton J spoke, but, as is apparent from what I have said so far, my view is that nothing put forward with which I have so far dealt would justify a departure from the effect of his dictum.”
19. There is also the decision in Katz v Oldham [2016] BPIR 83, [5]-[11], where the question was whether leave should be given to bring a claim against administrators of a company under para 75(6) of Sch B1 to the Insolvency Act 1986. Registrar Derrett said:
“[5] It is common ground that there is no authority as to the applicable test to be applied under para 75(6). In such circumstances I accept that the applicable test should be the same as that under s 212(4) IA 86 which requires the leave of the court to be obtained in order to bring a misfeasance claim against a Liquidator who has been released and s 304(2) IA 86 which relates to claims against trustees in bankruptcy.
[6] Applications of this nature are addressed relying upon principles set out in Brown v Beat [2002] BPIR 421, which was approved and applied by the Court of Appeal in Parkinson Engineering Services plc (In Liquidation) v Swan and Another [2010) BCLC 163. I have also drawn counsel's attention to the case of Maguire v Rose [2013] EWCA Civ 429, [2014] BPIR 650.
[7] In summary, there are two principal criteria: first, whether or not a reasonably meritorious cause of action has been shown; and secondly, whether giving permission for its prosecution is reasonably likely to result in benefit to the estate. These criteria are not exhaustive, but they are the central and most important factors. See the Parkinson decision at para 34.
[8] The parties submitted that the test for permission, whether or not a reasonably meritorious cause of action has been shown, is a lower threshold, that is the cause of action ought to be treated as a lower threshold than that which is required for summary judgment, where it is necessary to show that there is a real prospect of success.
[9] My initial view is that it ought to be the same and that it is necessary to demonstrate that there is a real prospect of success. However, in the circumstances of this case where I accept I only dealing only with the question of permission, and, if granted, as such, it would not preclude the respondent from applying for summary judgment or to strike out the Application. I can see that where an application for permission is faced with a cross-application for summary judgment or strike-out, then the test to be applied would require there to be a reasonable prospect of success. For present purposes, I accept that the test, as such, can be treated as a lower threshold, although counsel for the applicants has submitted that, in any event, the test of reasonable prospect of success has been met.
[10] The policy reasons for the requirement of leave in relation to claims against an office holder of an insolvent estate are set out in Brown v Beat [2002] BPIR 421 at 424. [ … ]”
20. So the test for permission in this area of the law initially involves consideration of two principal criteria. One is whether or not there is a reasonably meritorious cause of action; this is a lower threshold than the real prospect of success required for permission to appeal. The other is whether giving permission is reasonably likely to result in benefit to the estate. But they are not exhaustive, and other factors must be taken into account where appropriate, such as any relevant delay, the likelihood of success, and the risks as to costs of the estate in the event of failure . It is also relevant whether the trustee has obtained his release under section 299. (As I understand matters, that is the case here.)
21. The applicant is of course a litigant in person and a layman rather than a lawyer. So a question also arises as to how far indulgence may be given to him which would not be given to a lawyer. In my judgment of 8 March 2018, I said this:
“44. … At the hearing there was no discussion of how far the status of a party to litigation as litigant in person could affect the proceeding. But, in fact, a month after the conclusion of the hearing in January 2018, the Supreme Court gave judgment in Barton v Wright Hassall LLP [2018] UKSC 12, where this very issue was raised. In summary, although the court was split on the particular procedural point arising in the case (whether service by email was to be validated retrospectively), on the general position of litigants in person the judges were unanimous. They held that the fact that a litigant was acting in person was not in itself a reason to disapply procedural rules or orders or directions, or excuse non-compliance with them. The exception was that a special indulgence to a litigant in person might be justified where a rule was hard to find, difficult to understand, or it was ambiguous.
45. In my judgment s 304 does not fall into any of those categories. In any event, from the way in which the claimant has written in his letters and pleadings about this case, and the way in which he addressed me at the hearings, it is clear that he is an intelligent and articulate litigant, who has learned a great deal about insolvency law in particular and civil law and procedure in general since he has had the misfortune to be adjudicated bankrupt. I see no injustice arising here merely from the fact that the claimant is a litigant in person.”
22. In a letter to the court after the judgment was handed down, dated 5 April 2018, the applicant politely denied that he had learned much about insolvency and general law and procedure:
“What I have learned from the little I’ve learnt is that insolvency law is incredibly complex, such that many firms are set up just to deal with insolvency.
There is all the difference in the world between being intelligent, and being knowledgeable. Also there are different forms of intelligence, or put another way one can be intelligent in one area but not in another.
I’m sure it might be said that I could have asked an insolvency specialist, but that takes money, and I don’t have money. Even with the intelligence I acknowledge I have, I have obviously failed.”
23. I accept that the applicant is not a lawyer, and certainly not an insolvency specialist, but I do not accept that he is unintelligent or unable to explain himself or his case to the court, and I see no reason why special indulgence needs to be given to him if he chooses to act in person. Accordingly, in principle I apply the same rules to him as would apply to a represented party, such as the respondent.
The submissions in summary
24. The application notice seeking permission to bring the s 304 claim referred to the “witness statement” (meaning skeleton argument) of the applicant dated 4 January 2018, “and in particular paragraph 4”. The applicant’s submissions in that document are mostly in support of his claim at common law which was eventually struck out. But some paragraphs bear on the s 304 claim. I can summarise these as follows. The applicant had not brought his claim under s 304 because he had never heard of it, and it would be most unjust if the (common law) claim were stuck out because he as a litigant in person did not know the detailed insolvency law. He struggled to understand why he would not receive the balance of the estate in a s 304 claim once creditors and costs were paid. Here he argued that the debts compared to the likely recovery were just a small percentage.
25. The respondent argued that the proposed application raised issues which in substance have already been decided against the applicant in his original application under section 303 of the 1986 Act. So there was either an issue estoppel against the applicant, or it would be an abuse of the process for him to be able to raise these issues in the proposed new claim. Alternatively, the new claim could and should have been brought at the same time as the original application under section 303, so that the court and the respondent could deal with all of the applicant’s complaints at the same time. It would therefore be an abuse of process or the applicant to pursue it now. The respondent further argued that in any event the allegations made were vague, unsupported by any evidence and disclosed no loss to the estate. Moreover, given the way in which the applicant had conducted the two previous sets of proceedings, he said that it was highly unlikely that he would pursue the claim under section 304 reasonably and proportionately.
26. The applicant replied to the respondent’s submissions in a letter to the court of 20 July 2018, in closely spaced typescript extending over about 10 A4 pages. I cannot hope to do justice to the breadth of the various points made in that document. Nevertheless, in that letter he referred me to a report by Bishop James Jones into deaths which occurred at Gosport Hospital. The applicant said that the report stated “that it is commonplace that where establishment figures are criticised the establishment’s response is to simply close ranks, and characterise the person bringing the abuse to general attention, as a troublemaker”. The applicant suggested that the respondent in this case represented the “establishment” and that the judges were “closing ranks” with him. He emphasised that he had a lot of evidence, but that no one wanted to look at it. He went into a number of documents from the file, saying that they represented clear examples of support for his case. He also argued out a number of points, as if he was arguing the case at trial.
Discussion
27. One of the problems in considering this application is that the applicant has not provided any document in which he sets out clearly what exactly are the claims he wishes to make against the respondent under s 304. The application notice simply refers to “proceedings against my previous trustee in bankruptcy Nigel Fox for his negligence in the administration of my bankrupt estate.” However, given that the application was filed at court during the currency of the respondent’s application to strike out the claim against him at common law, in part on the ground that it should have been brought under s 304, it is reasonably clear that the applicant was seeking a fall-back position in case his claim was indeed struck out. Accordingly, the starting point for the scope of the s 304 claim must be the common law claim so far as it related to estate losses.
Claim in contract
28. There was both a claim in contract and one in negligence. The claim in contract was in substance a personal claim, and so outside the scope of s 304. It is not clear from the application notice whether the applicant intends to make a claim in conatrct as well as tort. But, if and to the extent that it was somehow within the scope of the s 304 claim now proposed, it suffers from the same defects as it did in the previous proceedings. These are that it is inherently unlikely that there was such a contract, there are no particulars of any such contract and there is no evidence before the court on this application in support of the contract claim: see paragraph [35] of my judgment of 8 March 2018. It is not therefore “a reasonably meritorious cause of action”; indeed, on this material it has no chance of success. Irrespective of any other arguments, I cannot therefore give permission for it to be brought.
Claim in negligence
29. As to the claim in negligence, I am concerned only with the heads of claim relating to estate losses. In the earlier proceedings, the applicant accepted that, of the heads of claim set out in paragraph 60 of the particulars, head (a) fell away. In addition, I held that head (i) made no sense, and should be discounted, but that heads (b)-(h), (j)-(p) and (r)-(x) did indeed concern estate losses: see paragraph [41] of my judgment of 8 March 2018. Of these, heads (b)-(h) and (j)-(p) relate to the question whether the respondent should have pursued claims against the mortgagee NRAM and the two advisers Messrs Marlow and Wescott.
30. The problem for the applicant is that this question was also raised in the original proceedings under s 303, and failed both before the district judge and on appeal: see my judgment of 8 March 2018, at paragraphs [53]-[54], [58]-[60], discussing the judgment of HHJ McCahill QC in the section 303 appeal. I had to consider the effect of this on the common law claim. I said this:
“62. In my judgment, it is clear that, if the claimant is permitted to continue with the common law claims in the heads set out above, he will in substance be re-litigating issues which arose and were decided in the application under s 303 of the Insolvency Act 1986. Even if they had not been exactly the same issues as would have arisen in that application, they would still have been in substance the same, and thus would attract the operation of the abuse of process rule referred to in Halsbury’s Laws (above) at [1624]. More, even if they were not so sufficiently close as to be covered by that rule, they all obviously arose out of the same circumstances, and hence should have been litigated at the same time, in accordance with the rule in Henderson v Henderson .”
31. The position is not different because the applicant is seeking to bring the same claim again in the context of a claim under s 304. The same problems of issue estoppel and abuse of process arise. In my judgment, the claim under these heads must accordingly fail, and there is no point in giving permission under s 304.
32. In these circumstances, I do not consider that it is necessary to go into the question raised by the respondent, namely whether the allegations in this part of the case lack particularity and are unsupported by any evidence on this application. I will only observe, in deference to the applicant’s repeated comment that he has lots of evidence but no-one wants to look at it, that it is for the applicant in (and as part of) his application to put forward the particular evidence he wishes the court to consider. It is not for the court to go searching for it in the boxes of documents it has now amassed in the court files for the previous proceedings. This application is not part of any previous proceedings. It is an application to bring a new claim, under a new claim number.
33. As already noted, the applicant has filed no evidence at all in support of his application. Instead, he refers to documents already sent to the court in the earlier sets of proceedings. For example, in the letter of 20 July replying to the respondent’s submissions, he says:
“Returning now to the question of the evidence: I am concerned that what has been several times ignored was my request to the Court to say whether it considered that (as an example) Mr Barker's statement that there was 'virtually no information' (page 331), was truthful. I would therefore invite Your Honour to consider this in the light of my letter to Mr. Barker dated 31st of December 2013(page 59), and his response of 7th of January 2014 (page 61), notwithstanding the fact that Humphreys also sent him two leave-arch files. Would Your Honour also like to consider Mr. Barker's extraordinary letter to NRAM's solicitors dated 3rd March 2015 (page 161). I have addressed both these points at length in my skeleton argument dated 4th January 2018 at paragraphs 20 to 32. I could have chosen numerous examples, but the two above are simple and easy for the Court to research without having to go through the whole file.”
34. The first example given is an allegation that Mr Matthew Barker (the respondent’s solicitor) has made an untruthful statement. Obviously, I cannot determine on this application whether there is any truth in the allegation, but, even supposing there were, that would not mean that there was any, or any greater, substance in the applicant’s proposed case under s 304. A lie by a person here does not mean a lie elsewhere, much less that other, more serious allegations are more likely to be true. The applicant also refers back to paras 20-32 of his skeleton argument of 4 January 2018. Those paragraphs refer to a number of different matters.
35. One of them is the allegation that the trustee should have brought the case against Thomas Westcott, but “as an absolute minimum he should have proposed a meeting with Westcott’s insurers to see if a settlement could be negotiated”. This smacks of an attempt at micromanagement of the trustee’s conduct, inconsistent with the approach of Harman J in Re a Debtor, ex parte the Debtor v Dodwell (the Trustee) [1949] Ch 236, already referred to. But in any event it is no more than an allegation. Another is the complaint that Mr Barker wrote a letter to be used in support of the mortgagee’s attempt to evict the applicant from his property, which letter is alleged to contain many untruths.
36. There are other allegations too. But I am afraid that they are just forensic points, asking rhetorical questions about this or that letter. None of them (even if true) demonstrates that the trustee may have caused the estate loss, such that the court can be satisfied that there is a reasonably meritorious cause of action, reasonably likely to result in benefit to the estate. Indeed, some lean clearly in the opposite direction, such as the refusal of the trustee to sell the rights to a cause of action to the applicant for a nominal sum: see eg the judgment of HHJ McCahill QC of 4 November 2016, at [111]-[116] And, without being so satisfied, I could not give permission under s 304 for this claim to be made.
37. That leaves heads (r)-(x) from paragraph 60 of the particulars of claim. These are as follows:
“(r) Writing to the Exeter Court with many untruthful statements, in order to assist NRAM in evicting the Claimant, the consequence of which was a 30% loss of value of the property.
(s) Misleading the Yeovil Court about the same issue.
(t) Misleading the Bristol Court in stating that the Westcott claim had ‘virtually no information’, when a vast number of documents had been sent to the Defendant.
(u) Refusing to have a meeting with the Claimant, saying that it could not be afforded, and then subsequently engaging in correspondence numbering more than 200 letters.
(v) Refusing 22 requests for a meeting.
(w) Refusing to engage in ADR.
(x) Refusing to respond to the 8 occasions when the Claimant asked what the Defendant was proposing to do which would benefit the Creditors.”
38. As to (r) and (s), they lack all particularity (particularly important with such a serious allegation as misleading the court with untruthful statements). The alleged loss of value is unexplained and counter-intuitive, and there is no evidence in the application to support it. There is no reasonably meritorious cause of action, and no evidence of likely benefit to the estate. I cannot give permission for these heads to go forward.
39. As to (t), it too lacks particularity, but also clarity as to just how the statement is untrue. It also lacks any statement of loss allegedly caused. If it were the loss of a chance to bring the Westcott claim, that would not be sufficient, as that claim has already been decided to be without merit. Once again, there is no reasonably meritorious cause of action, or evidence of likely benefit to the estate. So here too I cannot give permission for this head to go forward.
40. As to (u), (v) and (w), they also lack particularity. In addition, without further explanation it is difficult to see how this could have caused loss to the estate. If they relate to failure to prosecute the NRAM, Westcott or Marlow claims, that is not sufficient, since those claims have been decided to be without merit. In the same way as before, there is no reasonably meritorious cause of action, or evidence of likely benefit to the estate. Once more, I cannot give permission for this head to go forward.
41. As to (x), this allegation cries out for proper particulars, and does not allege that any loss has been caused to the estate. It is hopeless. There is no reasonably meritorious cause of action, or evidence of likely benefit to the estate, and I cannot give permission for this head to go forward either.
Conclusion
42. I could have spent longer on dealing with the many detailed points arising in this matter. But I cannot justify spending, on a matter which has already taken up three sets of proceedings, so much time which could be more usefully be spent on the disputes of other litigants. It is not fair to them. It is not fair to society, which has to pay for the whole system. It not fair to the respondent, who has to live with these allegations hanging over him. And, although he may not appreciate it at this stage, it is also not fair to the applicant to keep alive false hopes which cannot ripen into success for him. In my judgment the matter is clear. My conclusion overall is that I cannot give permission to the applicant to prosecute any part of his proposed claim under s 304 of the 1986 Act. The application is accordingly dismissed.
