England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		29th November 2007

Mr Justice Tugendhat :

1. The Claimant and the Defendant were formerly partners, together with Mr Brownlow, in a firm of consulting engineers. On 3 November 2006 judgment in default of defence was entered in favour of the Claimant against the Defendant, and directions were made for the assessment of damages. The Claimant had issued the Claim Form on 27 June 2006. On 8 October 2007 the Defendant issued three Application Notices. The first was for an order that the default judgment be set aside. The second was for an order prohibiting the use by the Claimant in any proceedings against the Defendant of documents which the Defendant had given to the Greater Manchester Police ("GMP"). The third was in response to an Application Notice issued on 23 July 2007 by the Claimant asking for permission to amend his claim and final judgment. The Defendant's application was for an order that the Claimant's application be adjourned until after the hearing of the Defendant's first two applications.
2. In addition, the Defendant makes a fourth application, namely to set aside an order made by DJ Jones on 12 December 2006 that the Claimant's "Trustee in Bankruptcy (Mr Mackellar of Kroll) shall pay into the Court Funds Office by 31^st January 2007 to abide the event such monies as are payable to the Defendant in these proceedings (including his costs of instituting for Bankruptcy and the obtaining of a Bankruptcy Order)". I shall refer to Mr Mackellar as "the Trustee". This order records that the Claimant had been adjudicated bankrupt in 2003 and discharged in April 2005. No Application Notice has been issued asking for this order, but the Claimant does not object to my dealing with it. Pursuant to this order the Trustee did pay into court on 23 January 2007 the sum which represented the dividend due to the Defendant as a creditor of the Claimant (he was the petitioning creditor).
3. Finally, and fifthly, the Defendant drafted on 21 September 2007 an Application Notice asking for an order that all proceedings be struck out. This Notice was not issued. The Claimant does not object to my hearing it, on the basis that the substance of the application was in any event covered by the first application of 8 October, which was issued.

The Claim

4. The brief details of the claim as drafted by the Claimant (who acts in person) and entered on the Claim Form are:

"I claim basic damages, aggravated damages, exemplary damages, general damages and special damages arising out of the actions of the Defendant on 1^st June 1992 or thereabouts and thereafter… The causes of action are: trespass to property, trespass to good and breach of duty of confidentiality. The proceedings are brought under the provisions of section 32(1) and (2) of the Limitation Act 1980".

5. In the Particulars of Claim dated 19 June 2006 the claim is set out as follows. The trespass to property is alleged to have occurred on various occasions between 1^st June 1992 and 19^th November 1996 when "the Defendant entered the Claimant's private office located within 173 Chorley New Road, Bolton without the Claimant's invitation or permission". The trespass to (or interference with) goods is alleged to have been that the Defendant accessed the Claimant's personal and private business documents which were held in confidence by the Claimant's secretary, removed them for perusal, and made notes and/or copies of them which he then took away". The breach of confidentiality alleged is the disclosure of "confidential information, both verbal and documentary, related to the Claimant's private, tax, banking and business affairs generally". It is alleged that the Defendant "obtained the information both directly from the Inland Revenue … and the Royal Bank of Scotland who held confidential information in its role as the Claimant's bankers, and indirectly through the Defendant's own acts of trespass".
6. In the Particulars of Claim damages are pleaded under ten sub-paragraphs (all set out on one page) with a figure given in respect of each, the total being of the order of £9 million, including interest. The largest figure is £1.75m, plus nearly £1m interest, in respect of "loss of business and anticipated future earnings". There are claims of £1 million each for "Loss of professional reputation", "Loss of commercial standing" and "Distress and social isolation" and £820,830, plus about £1/2 million interest, for "Loss of principal home". These figures are, of course, from the world of fantasy, as is the figure in the proposed amendment, namely "In the alternative I claim the fixed sum of £1,000,000". Subject to immaterial exceptions, claims for losses of reputation or standing are recoverable only by an action for defamation, and general damages for defamation cannot exceed figures which are a very small fraction of the sums pleaded by the Claimant. The Claimant has not given particulars of special damages.

The Claimant's documents and information

7. Although the Particulars of Claim contain no particulars identifying the documents alleged to have been interfered with, nor of the allegedly confidential information disclosed, the Claimant did take me to some of the pages of a document disclosed to him by Greater Manchester Police ("GMP") listing documents and information provided to GMP by the Defendant. He had exhibited these to a witness statement dated 23 November 2006 made in support of his claim for damages, presumably for use in the assessment of damages.
8. GMP had disclosed the documents referred to in the second Application Notice to the Claimant in the course of proceedings brought by the Claimant against GMP for wrongful arrest, false imprisonment, trespass to goods and property, conversion and/or unlawful retention of goods and property.
9. The Claimant has entitled the documents exhibited to his witness statement "Sample pages taken from the transcript of the Defendant's Diary Record" ("the Diary Record"). He has highlighted entries of which he complains. Some are not easy to follow, since they are in note form. But some examples are:

"2^nd March: PGB issuing cheque for £193 for repairs to fencing at his property at Lym Regis.

25 July 1993: Mortgage on Littlefield Lyme + 3137 to Leek Cobbetts [the Claimant's solicitors]

Wednesday/Thursday 8^th/9^th Dec: Letter from K. Loughlin Burnley HA to PGB complaining about McEnzie Education Centre

Sunday 13^th March: Got accountants letters from file".

10. The Claimant claims that the Diary Record came into his possession in April/May 2004.
11. I invited the Claimant to identify any particular disclosure which he alleges was most damaging to him. He said he was unable to do this.

Other relevant proceedings

12. In 1997 the Defendant brought proceedings against the Claimant claiming a share of the partnership profits (Case No 97D011). Following the dissolution of the partnership in that year, the Defendant did not pursue this action and in August 2001 it was struck out on the application of the Claimant.
13. In 2001 the Claimant sued the Defendant in the Bolton County Court (Claim No BL 016300) claiming 25% of alleged losses of the partnership. The Claimant's action was struck out on 17 July 2002 and he was ordered to pay the Defendant's costs which the Defendant states amounted to £28,082.08, plus interest, and which remain unpaid. It was on this debt that the Defendant petitioned for the Claimant's bankruptcy.
14. The Claimant then sued GMP in Claim No MA291498, as already noted. On 31 October 2003 Mackay J struck out part of that claim. On 27 April 2005 Cooke J gave judgment on a preliminary issue of liability ([2005] EWHC 748 QB). He described the claims of the Claimant as being "for the most part speculative". He dismissed the claims for wrongful arrest and false imprisonment, but directed a further hearing be held to determine whether some part of his claims in respect of interference with goods (that is his documents) might succeed.
15. In 2005 the Claimant sought to bring defamation proceedings against the Defendant out of time (Claim No 5MA 90697). On 14 March 2006 Royce J dismissed the application and ordered the Claimant to pay to the Defendant and his wife Janet Brown (whom the Claimant also sought to join) costs which he assessed at £8,000. I am told that Royce J delivered a short ex tempore judgment, but I have seen no transcript. The Defendant made a witness statement dated 5 December 2005 in those proceedings. He states that the publications complained of were the letter by the Defendant to GMP dated 19 August 1996 (with attachments), the Diary Record, and a letter to the Royal Bank of Scotland which was one of the enclosures sent to GMP. In other words, the defamation action was to complain of the same disclosures which are the subject of the present action for breach of confidence and interference with goods (namely the same documents as the Defendant had disclosed to GMP).
16. There are a number of passages from the judgment of Cooke J in that action which are material to the present action. The Claimant was arrested on 19 November 1996 and the police searched a number of premises including the partnership premises at 173 Chorley New Road, Bolton. They seized very many bags of files and other documents pursuant to a search warrant. The arresting officer who was also in charge of the operation was DS Hartley. The Claimant's claim in trespass to goods was based partly on the claim, which succeeded in part only, that the police had seized some documents that they were not entitled to seize and held some documents longer than was reasonably necessary.
17. The events that led to the Claimant's arrest started with the letter of 19 August 1996 written by the Defendant to the Commercial Fraud Unit of GMP. Attached to the letter was a series of enclosures running to something over 100 pages. The essence of the Defendant's complaint appeared in letters which he had written to the Institute of Chartered Accountants and the Royal Bank of Scotland. He complained that money had been diverted in a number of ways from the partnership to the Claimant. The Defendant enclosed invoices which he said were issued by a company owned by the Claimant to the partnership for work done by the partnership, although no work had been done by that company. He also enclosed invoices issued to partnership clients by Bell Energy Ltd ("BE") and Smith Willoughby ("SW") for work done by the partnership, or for work that had not been done at all. He also enclosed what he said was evidence of payments by the partnership to contractors for work done on commercial properties owned by the Claimant and Mr Brownlow.
18. A detective met with the Defendant and the Defendant explained to him these documents on 22 August 1996. A Mr Rowe of the Inland Revenue informed GMP that the Defendant's allegations were substantiated by documentary evidence. The detective recommended that the matter be investigated further, and the Claimant accepted before Cooke J that that recommendation was appropriate. The file was allocated to DS Hartley. She invited the Defendant to call in to see her, which he did on 5 November. He brought to her additional documents of a further 220 pages consisting of further invoices and the Defendant's personal notes in the form of a diary, which is the document extracts of which the Claimant exhibited to his witness statement of November 2006, and which is one of the documents forming the basis of his Particulars of Claim. The Defendant also included some 10 photocopied pages from ledgers. He explained that neither SW nor BE had any employees, and that the company controlled by the Claimant, Dimple Properties Ltd ("Dimple"), owned commercial properties bought with the diverted money. DS Hartley said, and Cooke J accepted, that she suspected that criminal offences had been committed and was satisfied that there was a strong prima facie case of theft of monies from the partnership by the Claimant and Mr Brownlow.
19. The Claimant was interviewed by DS Hartley and another officer following his arrest. The interview was in the presence of his solicitor to whom a pile of documents had previously been disclosed so that he could discuss them with the Claimant. The Claimant said to the officers that he was not really surprised by his arrest because he and Mr Brownlow had been subject to vindictive attacks by the Defendant over four years and the Defendant had tried to involve a number of organisations to get at them. Cooke J found that the Claimant knew that DS Hartley had arrested him in connection with complaints by the Defendant of diversion of partnership money. He said to the officers that the papers the police had were exactly the same as the Defendant had been toting about to everyone else in town, with his allegations of diversion of money (para 47). DS Hartley summarised the Defendant's allegations, but when she sought comments on particular documents the Claimant declined. The Claimant accepted that the documents which DS Hartley had seen and the absence of supporting documents for any work actually done by BE or SW might have made her suspicious. He accepted in evidence before Cooke J that the Defendant was unlikely to have known that some of the work coming through the partnership was being fed to BE and SW, and justified that saying that the Defendant was concerned only with the work he himself did.
20. Cooke J concluded that there were clearly reasonable grounds for DS Hartley's suspicion, as explained to her by the Defendant, and that these suspicions were only confirmed by the Claimant when he gave evidence to Cooke J. Cooke J set out examples in paras 68-75 of his judgment. He said that nearly all of these examples appear from the first tranche of material enclosed with the Defendant's letter of 19 August. He found that the second tranche of documents, provided in November, provide further examples of the same practices and detailed figures showing some £487,000 worth of fee income earned between 1986 and 1992 being diverted to BE and SW (para 75). At para 76 Cooke J found that the notes in the Defendant's Diary Record of meetings with the Claimant in December 1992 show that the Claimant accepted that monies had been transferred to BE, and that invoices in the second tranche showed payments to the Claimant's family members for what the Defendant said were no good reason. Cooke J found (at para 77) that whether or not there were good reasons at the end of the day, once again there were reasonable grounds to suspect that improper payments were being made from partnership income.
21. At para 79 Cooke J records that the Claimant suggested to DS Hartley that some of the material that the Defendant produced could only have been obtained by dubious or unlawful means. Cooke J observed that DS Hartley pointed out that that did not weaken the strength of the case on the documents. So he concluded that he could not see how it could be said that DS Hartley's suspicions were not formed on reasonable grounds. He regarded the Claimant's stance over these documents (that nothing dishonest had been done) as reflecting a distorted view of business morality by the Claimant.
22. Cooke J rejected the Claimant's case on trespass to land and accepted his case on trespass to goods to a limited extent. He found that the police had seized some documents which appeared to have no connection with the relevant enquiry. But there is no finding by him that any of the documents provided by the Defendant to the police came within this category (paras 113-118). He observed: "Whether or not damage can be shown to flow from this unlawful interference is another matter since Mr Bell frankly said that, on return of many of these documents, they were thrown away because they were 'no use to man or beast'". He directed an enquiry as to damages. Delays had occurred in the criminal proceedings. The charges eventually brought against the Claimant on 8 April 1999 were withdrawn, and the Claimant was informed on 15 February 2000 that no further action would be taken by the police against him (para 122).

The chronology of these proceedings

23. On 9 June 2006 the Claim Form was issued. The address for service is given includes Meadowcroft, Chorley.
24. On 19 October 2006 the Claimant certified that service had been effected on 17 October by first class post addressed to the Defendant at his usual or last known address (which the Claimant did not identify). The Claimant states in his written argument that he received no response from the Defendant and the documents were not returned.
25. On 3 November judgment was entered in default.
26. The Claimant states in his written argument that "On 23 November 2006 the court advised that the judgment of 3 November 2006 served on the Defendant at his Meadowcroft address had been returned by the Post Office; the Defendant was said to have gone away".
27. On 12 December 2006 DJ Jones made the order discussed below relating to the payment into court. He did so upon the Claimant's application made by Notice dated 6 November 2006. DJ Jones requested a written response from the Trustee. The Trustee responded by a letter dated 15 November 2006, which is summarised below.
28. On 5 January 2007 and 12 March orders were made by District Judges adjourning the matter. The latter directed the Claimant to file and serve a Certificate of Service of the default judgment.
29. On 4 May 2007 the Claimant wrote to the Court informing it that the Defendant's address for service was now at Denham Wood Close, Chorley, and enclosed a Certificate of Service of the default judgment. In his written argument he states that he obtained this information from a private detective agency. He states that documents served at that address (as certified by himself on 2 July) were not returned.
30. On 20 July 2007 DJ Jones made an order adjourning the matter, and recording that the Claimant estimated his claim for damages to be £6m, and that the Trustee had paid into Court the sums of £31,210.01 and £7,058.88.
31. On 23 July 2007 the Claimant issued the Notice of Application for permission to amend his claim, as already noted. A further amendment for which permission was sought was to substitute as the Defendant's address the address in Denham Wood Close.
32. On 16 August 2007 the Claimant signed a certificate that he had personally left at the Denham Wood House address on that day a copy of the Court's order of 20 July together with copies of the Application dated 23 July and Amended Claim Form.
33. On 24 August 2007 the DDJ JP Smith made an order that the sum of £5,890.26 be paid out of court to the Claimant. The Trustee had applied for that order on the ground that there was an error in the calculation of the amount paid into court.
34. On 30 August 2007 the Defendant made a witness statement saying that he had formerly resided at Meadowcroft, but that he not resided in the UK since February 2006, and had never seen the Claim No 6MA 90715, nor received any Particulars of Claim.
35. On 31 August 2007 the Defendant's son wrote to the Court. He gave his address as Denhamwood Close, and returned to the court documents which he said had been left in his post box in error, in an envelope without any stamp or post mark and without the sender's identity. He listed these as including the Application Notice of 23 July, the Amended Claim Form (but not the Particulars of Claim stated to be attached) and an Order of 20 July. He said that the Defendant had never lived at that address, and that he had no authority to accept service. He repeated the information given by the Defendant in the statement dated the day before. He added that he had returned unopened envelopes received from the Court by post at the end of July or early in August. He wrote "I believe the Court needs to be aware Mr Bell has a prior history over many years of conducting numerous rounds of litigation against my father. All of which are on matters arising out of the same events. All the previous actions failed…".
36. On 2 October 2007 the Court wrote to the Defendant acknowledging receipt of his Application Notice dated 21 September 2007 (already referred to, and which he had issued in person) and informing him that, since judgment had been entered what he needed to do was to apply to set the judgment aside. It was in response to this letter that the Defendant issued the Application Notices dated 8 October, in which solicitors Pannone LLP appear on the record.

The Trustee's letter of 15 November 2006

37. In response to the Court's enquiry initiated by DJ Jones, the Trustee wrote a closely typed and carefully considered letter covering three pages. It was headed with the number of the present action. He confirmed that he was the trustee in bankruptcy of the Claimant, that the Defendant was the petitioning creditor, that he had accepted the Defendant's proof of debt and considered the Defendant entitled to the monies, which related to a costs order in previous proceedings between the parties. He enclosed documents in support of what he was saying. He wrote that the Defendant had informed him of Royce J's costs order, a copy of which he enclosed, and that he had advised the Defendant that since that order was post bankruptcy he was not obliged to pay it without a court order.
38. The Trustee went on to make important observations on the claim in the present proceedings. First he raised the obvious question of a limitation defence. Second he suggested that the Claimant had not been entitled to bring the claim at all, because it appeared to comprise part of his estate under the Insolvency Act 1986 s.283. He was concerned that the Claimant had not informed him of the claim as required by s.333 of that Act. Third, he noted that the claims appeared familiar, and raised the concern that they had already been litigated and disposed of in previous claims made by the Claimant against Mr Brownlow, Cobbetts and GMP. He noted that the realisation made in the bankruptcy derived from the judgment obtained against Mr Brownlow (in which the claim had also included, as does the present claim, damages for the loss of the Claimant's home). He wrote that the cause of action against GMP had been formally assigned back to the Claimant. He repeated his concern that that was not the case with the present claim and that C might have no right to bring the claim.
39. All of these points are very serious ones. I have not seen or heard anything to suggest that the Claimant gave to DJ Jones any answer to any of them.

The application to set aside judgment

40. Amongst the grounds for this application the Defendant submits that he ought to be allowed to defend this claim, that it is a vexatious and scurrilous claim and that the use of the documents disclosed by himself to GMP, and by GMP to the Claimant, is an abuse of process.
41. He relies on CPR Part 13.3 which provides:

"(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if –

(a) the defendant has a real prospect of successfully defending the claim; or

(b) it appears to the court that there is some other good reason why –

(i) the judgment should be set aside or varied; or

(ii) the defendant should be allowed to defend the claim.

(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly."

42. The Defendant had at one point relied upon CPR Part 13.2 on the ground that service had been effected while he was out of the jurisdiction. That point was not pursued in the light of Kamali v City & Country Properties Ltd [2006] EWCA Civ 1879.
43. The Defendant seeks to advance a defence of limitation (CPR 13.3(1)(a)), and relies upon the following matters as good reasons why the judgment should be set aside (CPR 13.3(1)(b)): that the cause of action vested in the Trustee so that the Claimant had no right to bring the claim at all, that the claim in trespass to land is unarguable, that the claims in interference with goods and breach of confidence are weak and lacking in particulars, and could not in any event give rise to an award of substantial damages, to the extent that they should be struck out frivolous and vexatious.
44. In support of all his applications the Defendant made a single witness statement dated 8 October. In it he states that he only received the Claim and Particulars on 3 October, and refers to his son's letter dated 31 August 2007. He states that the first he heard of the default judgment was 18 September, and that he heard about it from a solicitor whom he had instructed to make enquiries but who was not on the record. He complains that GMP acted in breach of his rights in disclosing to the Claimant the documents he had disclosed to GMP for the purpose of criminal proceedings, and which the Claimant was relying on to found this claim. He complains that the Claimant's use of these documents is an abuse of process and refers to the 1996 Act and CPR 31.22. He claims witness immunity in respect of the information he gave to GMP. He states that the Claimant had threatened to join him as a party to the proceedings against GMP. He states that the awards of costs made in his favour against the Claimant in two previous actions remain unsatisfied. He refers to the judgment of Cooke J, which he exhibits. As to the merits of the claim, he refers to Cooke J's finding that GMP had been entitled to take the action that they did. He does not admit trespass, explaining that the Claimant's office was on partnership premises, and that he stole nothing and concealed nothing. He states his case that BE, SW and Dimple ceased to be the Claimant's private and confidential businesses when the Claimant diverted partnership assets to them. He denies breach of confidence on the footing that he was entitled to the information in question as an equity partner of the Claimant. He refers to the earlier litigation between himself and the Claimant.

Setting aside – promptness

45. The Claimant submits that the Defendant has not made this application promptly. He submits that the proceedings and default judgment must have come to the attention of the Defendant when, or soon after, service was effected in the manner described. In addition, the Claimant explored this point with the Trustee in correspondence. He asked to what address the Trustee had been communicating with the Defendant. By letter dated 24 August 2007 the Trustee confirmed that he had advised solicitors ("the Defendant's former solicitors") who had at one time acted for the Defendant that the Defendant's dividend had been paid into court, and, by letter dated 10 October 2007, that he had notified the Defendant care of his former solicitors. He wrote that that was the latest mailing address that he had for the Defendant. He confirmed that he had not had any response to his correspondence sent to the Defendant at that address.
46. The Defendant's evidence is set out in his witness statement summarised above. I heard no oral evidence.
47. The Claimant submits that the Defendant did know about the proceedings and the dividend due to be paid to him, but has been evading the proceedings, and so not acted promptly.
48. There is no doubt that the Defendant has been seeking to avoid what he characterises as harassment by the Claimant, and that he did not, and does not, want the Claimant to know his present address.
49. I can see no reason why the Defendant should not have responded if he received the Trustee's communication about the dividend payment he was to receive. There is no evidence as to what his former solicitors did with the correspondence addressed to him care of themselves. I would readily assume, as the Claimant would wish me to, that they attempted to contact the Defendant. I cannot assume that they succeeded.
50. On the evidence before me I accept the Defendant's account of when he came to learn of the proceedings. On that account he acted promptly in applying to the court.

Setting aside - Limitation

51. As appears from the Claim Form, the Claimant relies on s.32(1) and (2) of the Limitation Act 1980. These provide as follows:

"32. Postponement of limitation period in case of fraud, concealment or mistake.— (1) … where in the case of any action for which a period of limitation is prescribed by this Act, either—

(a) the action is based upon the fraud of the defendant; or

(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; …;

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or … (as the case may be) or could with reasonable diligence have discovered it….

(2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty."

52. The Claimant submits in his written argument that the Defendant has committed fraud and has deliberately attempted to conceal the facts. He contends that he did not become aware of the facts he now relies on until the disclosure made by GMP in 2004.
53. Ms Dunn for the Defendant submits that the causes of action in trespass, interference with goods and breach of confidence are not based on fraud within s.32(1)(a). This is clearly correct: fraud is not a necessary allegation in order to constitute any of these causes of action. See Beaman v ARTS Ltd [1949] 550, 558, 567.
54. Ms Dunn next submits that the Claimant has nowhere pleaded or set out his case on deliberate concealment, and that, to the contrary, his case is that the Defendant reported what he had done to the police and to others.
55. It is true that in these proceedings the Defendant complains of the fact that GMP disclosed that material to the Claimant in those civil proceedings without giving the Defendant an opportunity to object. But the whole purpose of the Defendant's initial disclosure to the police, and the second tranche of disclosure, as described by Cooke J, was in order that the police should do what they did, namely arrest the Claimant and charge him. It was highly likely that the police would attempt to ask the Claimant questions in interview, as Cooke J describes that they did, and that in the course of that the Claimant would come to learn of what the Defendant had done. So it cannot be said that it was unlikely that the Claimant would discover the facts upon which he now relies. His refusal to comment on specific documents in interview may mean that he did not in fact become aware during 1996 and 1997 of all the details of which he became aware in 2004. But that is immaterial.
56. For present purposes I do not have to decide whether or not what the Defendant did was in fact unlawful. I note that the Claimant knew enough about it at the time of his interviews to describe it to the police as being unlawful: see paras 19 and 21 above. I should not be taken as expressing any view on that. But assuming it were unlawful, there has been no concealment within the meaning of the section. There is no evidence that what the Defendant did in communicating to the police and others was done other than in an honest attempt to vindicate his own rights in the partnership. I find that the Defendant has a real prospect of succeeding on a defence of limitation.
57. I go further. I find that (applying the test in CPR Part 24) the Claimant has no real prospect of succeeding in his attempt to defeat the limitation defence.

Setting aside - Title to sue

58. At the hearing Ms Dunn for the Defendant submitted that for the reasons given by the Trustee, any claim the Claimant might have for interference with his papers or disclosure of information contained in them vested in the Trustee, and so that this action should never have been brought, and should have been stayed. She cited Ord v Upton [2000] Ch 352. In so far as the damages claimed are alleged to be damages to reputation, they could only be claimed in defamation proceedings, which Royce J had refused to permit the Claimant to bring.
59. At the hearing before me the Claimant submitted that the cause of action in this case had reverted in him. He did not have any document in court to support that submission. I invited him to send to the court any document that he might have to support that submission and he said he would do that the next day.
60. After the hearing the Claimant submitted to the court the Order of DJ Shaw made on 18 July 2007 annulling his bankruptcy pursuant to the Insolvency Act s. 282. The discharge of his bankruptcy did not affect the Trustee's title to the cause of action, but the Claimant submits that the annulment did have the effect that the cause of action reverted to him. The defendant has made no submissions on this new material. It is clear that the claimant had no title to sue until the order of 18 July 2007. What the effect of the annulment may be, or what would be the proper order to make if that had been the only point taken by the Defendant, are not questions that, in the event, I have to decide, given the conclusion I have reached on the limitation point.

Setting aside – other points

61. In the light of my conclusion on the limitation point, the other points raised by Ms Dunn do not need to be decided. Nevertheless I shall express my views on them shortly.
62. The claim in trespass to land appears to face difficulties. The statement of case does not identify with sufficient particularity the location of the land in question, or the Claimant's alleged title to sue (such as it may have been, and subject to the rights of the Trustee). The evidence before me, which is not in dispute, is that the property was owned by Dimple, not by the Claimant, and it (or part of it) was occupied by the partnership. The Claimant stated to me that his office was in a separate part of the building. The Claimant informed me that he and Mr Brownlow were the only shareholders and directors of Dimple, and that it was dissolved four years ago. The Defendant's actions were done at a time when he was a partner. On the material before me I would not find at this stage that the claim is unarguable, but it is a weak claim. Further, the damages which the Claimant could expect to recover if he were to succeed would be likely to be very modest at best. The damages actually claimed are not capable of resulting from a trespass to land such as is alleged.
63. The position in relation to the claim for interference with documents is similar. Notwithstanding the disclosure given by GMP, the Claimant's statement of case does not identify with any particularity the documents he refers to. He simply attached to a witness statement the document disclosed by the Defendant to GMP, and by GMP to himself. This would not be sufficient if the matter were to go forward. Even assuming that the case could be repleaded to make good this defect, the position in relation to damages is the same as the position on the claim for trespass to land.
64. The position in relation to the claim for breach of confidence is no stronger than the case on trespass to goods, and for all the same reasons. It suffers from the further weakness that in confidence there is a public interest defence. A claim for breach of confidence based on disclosure to the police of information which the defendant reasonably claims to provide evidence of an offence has no real prospect of success: Taylor v Serious Fraud Office [1999] 2 AC 177. The reasonableness of the suspicions of the police was explored, and indeed admitted by the Claimant, in the GMP action. While the position of the Defendant is not the same as that of the police (as a partner, he might have had information the police did not have), in reality the prospect of a successful claim for breach of confidence in the circumstances of this case is unreal.

Setting aside – conclusion

65. The conclusions I have reached on limitation lead me to the conclusion that the judgment should be set aside. Had it been necessary to do so, and having regard to the overriding objective, I would have reached the same conclusion on the basis of the other points raised in relation to trespass and breach of confidence.
66. While the application to strike out the Claim was not at first formally before me (the Notice not being issued), the Claimant accepted at the hearing that the issues would be fully covered by the arguments on the Application Notice that have been issued, and so that I should I state my conclusions. The alternative would be for the Defendant to have to make a fresh application before another judge on another occasion, which would be a waste.
67. On the basis of the limitation point, I have concluded that the claim has no real prospect of success and should be struck out. I also take the view that it is frivolous and vexatious. The damages claimed are fanciful, and duplicate those claimed in the proceedings for defamation which were also brought out of time. There has already been far too much litigation between these parties, and this should be an end of it.

The application to prohibit the use of documents

68. The application for the prohibition order was initially advanced by reference to the Criminal Proceedings and Investigations Act 1996 ("the 1996 Act") and the CPR Part 31.22, but the case advanced before me was solely under CPR Part 31.22(2). The Defendant accepted that the 1996 Act did not apply. He also accepted that CPR Part 31.22(1) did not apply, because the documents were referred to in Cooke J's judgment and the hearing before him.
69. CPR Part 31.22(2) provides:

"The court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public".

70. In the light of the conclusions I have already reached, it is not necessary for me to consider this point. Ms Dunn referred to the authorities mentioned in the notes to the White Book on Part 31.22. The Claimant's submissions were mainly directed to 31.22(1), a point which was conceded by Ms Dunn. One of the cases referred to in the White Book is Taylor v Serious Fraud Office [1999] 2 AC 177. The CPR were not then in force. But Lord Hoffman considered the principles at pp208-212, and concluded by saying:

"I do not propose to express a view on the further points which arose in Mahon v. Rahn [1998] QB 424, namely whether the undertaking applies also to used materials and whether it survives the publication of the statement in open court. I do not do so because these questions may well have been overtaken by the express provisions of the Criminal Procedures and Investigations Act 1996. But I would draw attention to the comments of Brooke J. in Mahon v. Rahn on the question of whether the provisions of Ord. 24, r. 14A (which was introduced in response to a decision of the European Court of Human Rights holding that the previous law unduly limited freedom of expression) and, by parity of reasoning, section 17(3)(b ) of the Act of 1996, are not too widely drawn. There seems to me much force in his view that the court should nevertheless retain control over certain collateral uses of the documents, including the bringing of libel proceedings."

71. In the light of that observation, I would, if it were necessary to do so to protect the Defendant, make the order that he seeks. But it is apparent from Lord Hoffman's words that the law is not clear, and in the light of the order that I propose to make, it does not seem to me that an order under CPR 31.22(2) is necessary.

The order for payment of money into court

72. This order dated 12 December 2006 was made on the Claimant's application. The terms of the order are set out at para 2 above. This order would in any event be discharged in consequence of my striking out the claim. The money in court and interest thereon must be paid out to the Defendant. But if I were not to strike out the claim, I would discharge the order for the reasons set out below. These reasons are relevant to the question of whether I should make a civil restraint order.
73. As noted above, the Claimant's Application Notice was issued on 6 November 2006. The grounds stated are:

"the financial sum claimed in this claim is substantial. The Claimant is concerned that should payment of monies that are rightly owed by the Claimant to the Defendant be made before damages are assessed in this claim then the Defendant could look to place such monies beyond the reach of the Court".

74. It is quite plain that the District Judge had no jurisdiction to make this order, and that such an order could not have been made by any judge who did have jurisdiction, and certainly not in this form. When a freezing order is made, it is made in the form set out in the Practice Direction which includes safeguards for the defendant. Safeguards include, in particular, a cross undertaking in damages, and express provisions enabling the defendant to use the money for proper purposes. Neither of these was not included in the order the District Judge did make.
75. CPR Part 25.1(1) sets out the interim orders which the Court may make. It includes:

"The court may grant the following interim remedies –...

(f) an order (referred to as a 'freezing injunction') – …

(ii) restraining a party from dealing with any assets whether located within the jurisdiction or not; ...

(l) an order for a specified fund to be paid into court or otherwise secured, where there is a dispute over a party's right to the fund; ..."

76. The Practice Direction to Part 25 provides:

"Jurisdiction

1.1 High Court Judges and any other Judge duly authorised may grant … 'freezing injunctions' (rule 25.1(1)(f)).

1.2 In a case in the High Court, Masters and district judges have the power to grant injunctions:

(1) by consent,

(2) in connection with charging orders and appointments of receivers,

(3) in aid of execution of judgments.

1.3 In any other case any judge who has jurisdiction to conduct the trial of the action has the power to grant an injunction in that action.

1.4 A Master or district judge has the power to vary or discharge an injunction granted by any Judge with the consent of all the parties."

77. The order made by the District Judge can only be described as a freezing order because it restrains the Defendant from dealing with the money ordered to be paid into court. The grounds upon which the Claimant applied for it include the grounds on which freezing orders are commonly granted, provided, which was not the case here, that there is other evidence, in particular to support the alleged threat of dissipation. This could not be described as a case relating to a specific fund, since the Claimant did not claim, and could not have claimed, a right to the monies: the monies were the dividend of his own bankruptcy and was due to be paid to the petitioning creditor. His claim was for preservation of what he accepted was money due to the Defendant in order to meet the judgment that he claimed to be entitled to obtain against the Defendant. In addition to the other weaknesses in the claim (which the Trustee mentioned in his letter), the Claimant had no title to sue in respect of it, because that was vested in the Trustee.
78. Para 1.4 of the Practice Direction sets out the jurisdiction of a district judge, and plainly had no application in this case, since there was no suggestion that the Defendant consented.
79. In answer to a question from me at the hearing, the Claimant accepted that DJ Jones had no jurisdiction to make the order, and could not offer any explanation of the jurisdiction he had invited the District Judge to exercise. He had just asked for the order, perhaps naively, as he put it to me.
80. The reason why the jurisdiction to grant such orders is reserved to High Court judges (and others authorised to make them) is because freezing injunctions are highly intrusive orders, and may have serious consequences for a defendant. For example, if not properly drafted, they may make it difficult for him to fund his defence to the proceedings. As the standard form of order makes clear, a defendant is normally entitled to deal with his assets in the ordinary course of business as he thinks fit unless and until a judgment is entered against him, which he is unwilling to meet. A freezing order should not prevent a defendant from dealing with his assets in the ordinary course of business, but only from dissipating them to avoid execution of any judgment. So it is unusual for a freezing order to require a payment into court (although the standard form does contemplate payments in court in certain circumstances).
81. The application was supported by a witness statement of the Claimant of the same date, 6 November 2006. In that witness statement he sets out that there had been a partnership between the Claimant and the Defendant until 1997, and that it had given rise to disputes commencing in 1992, that in late 1994 or early 1995 the Defendant had taken his complaints to the Inland Revenue and to the police, and that this action had caused the Claimant to lose all his assets. The statement goes on to say that in 2001 the Claimant had sought to recover certain monies from the Defendant in respect of the partnership, but that his action had been struck out and he had been ordered to pay the Defendant's costs. It continues saying that in default of payment the Claimant had been adjudicated bankrupt on 16 July 2003, that the Claimant expected a dividend to be paid to the Defendant shortly, and that "in the interim, since my claim against the Defendant is large, I am anxious that no monies should be paid to him in respect of the earlier proceedings lest he seeks to place them beyond the reach of the court".
82. As noted in para 39 above, I have seen no response by the Claimant to the points made by the Trustee.

Civil Restraint Order

83. I consider that the claimant's statement of case is totally without merit, given my view on the limitation point. The Claimant's application for the freezing order was also totally without merit. I am therefore required by CPR Part 3.4(6) to consider whether it is appropriate to make a civil restraint order, as Ms Dunn invites me to do.
84. By the Practice Direction, an extended civil restraint order may be made by this court where a party has persistently issued claims or made applications which are totally without merit.
85. Although Royce J does not say so in terms, I infer that the application for permission to bring the defamation proceedings was also totally without merit. I am able to reach this view from my knowledge of the circumstances of the case as set out above.
86. In my judgment it is appropriate to make an extended civil restraint order in this case and I shall do so.
87. Following the circulation of this judgment in draft, on 26^th November 2007 Mr Bell sent five pages of written submissions. I have read these, and the response to them dated 28 November, and taken them into consideration in deciding to hand down the judgment in the form in which it was circulated, subject only to editorial corrections.