Christine Harper v London Borough of Camden Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Snowden |
| Judgment Date | 27 April 2020 |
| Neutral Citation | [2020] EWHC 1001 (Ch) |
| Date | 27 April 2020 |
| Docket Number | Case Nos: CR-2020-002025 and CR-2020-002029 |
| Court | Chancery Division |
[2020] EWHC 1001 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Royal Courts of Justice
Rolls Building, Fetter Lane
London, EC4A 1NL
Mr Justice Snowden
Case Nos: CR-2020-002025 and CR-2020-002029
In the Matter of Saint Benedict's Land Trust Limited
And in the Matter of the Insolvency Act 1986
In the Matter of Shorts Gardens LLP
And in the Matter of the Insolvency Act 1986
Andrew Clark (instructed by Harrison Carter) for the Applicants
Tom Gosling (instructed by Greenhalgh Kerr Solicitors Limited) for the Respondents
Hearing dates: 7 and 24 April 2020
APPROVED JUDGMENT
INTRODUCTION
These are two applications to restrain presentation of two separate winding-up petitions against Saint Benedict's Land Trust Limited (“SBLT”) and Shorts Gardens LLP (“Shorts Gardens”) by the Respondent councils (“Camden” and “Preston”). The petitions relate to unpaid liability orders in respect of National Non-Domestic Rates (“NNDR”) and certain unpaid costs orders arising out of earlier litigation involving the parties.
I heard the application on 7 April 2020 in a busy applications court and reserved judgment due to the lateness of the hour. I circulated a draft judgment to the parties on 23 April 2020 in the usual way, but was then confronted with further evidence from the applicants about half an hour before the time fixed for the hand-down on 24 April 2020.
Having heard further submissions, I dismissed both applications and indicated that I would give my revised reasons in writing, which I now do.
The SBLT Petition
The SBLT petition is in the sum of £51,985.57 comprised of;
i) a costs order made by me on 20 December 2019 in the sum of £20,040.00;
ii) liability orders made by DJ(MC) Allison on 4 February 2020 in favour of Camden in respect of unpaid NDDR in respect of a property in Hatton Garden, London for 2018–2019 and 2019–2020 in the sum of £29,863.07 (including costs); and
iii) a costs order made by Mostyn J on 27 February 2020 in the sum of £2,082.50.
SBLT has been involved in long-running litigation with both Camden and Preston in which it has contended that it is not liable for NNDR because it occupies properties for charitable purposes connected with the storage of property for homeless individuals. It is not, however, a charity registered under the Charities Act 2011, but a company incorporated under the Co-operative and Community Benefit Societies Act 2014.
On 20 December 2019, in addition to making the costs order upon which the SBLT Petition is partially based, I also made a general civil restraint order (the “GCRO”) against SBLT for the reasons which I set out in a reserved judgment handed down on the same day: see [2019] EWHC 3576 (Ch). In short, SBLT had engaged in an extraordinary series of meritless and abusive applications in its attempts to avoid the payment of NNDR. The GCRO provided that for two years SBLT would be restrained from issuing any claim or making any application in the High Court or the County Court without first obtaining the permission of (i) Supperstone J, or (ii) if unavailable, any other High Court Judge who is designated by him or who is authorised to sit in the Administrative Court.
The GCRO has not been appealed. SBLT did ask that I should review it on the basis that it had been made in its absence. That request was wholly inappropriate given that, as I explained in paragraphs [30]–[39] of my judgment, SBLT was clearly on notice of the hearing on 18 December 2019 to consider whether to make a civil restraint order and in fact sent counsel to the hearing to apply for an adjournment. When I refused the adjournment, counsel (who said he had limited instructions) withdrew and the hearing proceeded. At the conclusion of the hearing I then reserved my judgment which I handed down on 20 December 2019 and sent to the parties together with the GCRO.
The application to restrain the SBLT Petition is not made by SBLT itself, but is made in the name of Christine Harper. The application and statements in support, which are electronically signed, describe Ms. Harper as a director/trustee of SBLT. Ms. Harper is represented by Harrison Carter, which is not a firm of solicitors but claims to be a company entitled to provide legal services under one of the exemptions in section 23 of the Legal Services Act 2007. Harrison Carter shares the same office address as SBLT.
The petition in relation to SBLT was in fact presented to the Business and Property Courts in Manchester on 25 March 2020 but was rejected by the court office, apparently on the basis that there had been an application made in London to restrain its presentation. Nothing now turns on that because I have been informed by Mr. Clark, who appeared for Ms. Harper, that it is accepted (correctly in my view) that if the petition is allowed to proceed it should be treated as having been duly presented on 25 March 2020.
The Shorts Gardens Petition
The Shorts Gardens Petition has not yet been presented, but Camden contends that Shorts Gardens is indebted to it in the sum of £30,648.36 comprised of;
i) a liability order dated 15 March 2019 made by DJ(MC) Rimmer in respect of unpaid NNDR for a property in Shorts Gardens, London WC2 for the period 28 August 2018 – 31 March 2019 in the sum of £25,948.36 (inclusive of costs); and
ii) a costs order of DJ(MC) Newton dated 10 February 2020 in the sum of £4,700 in respect of a failed application to set aside the liability order.
The application in relation to Shorts Gardens purports to have been made by the LLP itself. The application and statements in support are electronically signed in the name of Johan Van Huyssteen who describes himself as a director of Harrison Carter.
In addition to representation by Harrison Carter, the link between the two applications is that Shorts Gardens contends that the property in respect of which it has been made subject to the liability order was in fact occupied at the relevant time by SBLT pursuant to a licence.
Each application seeks injunctive relief on the basis that the debts in question are genuinely disputed on substantial grounds or are subject to cross-claims. They also contend that it is inappropriate for a winding up petition to be proceeded with, “until 14 days after COVID-19 has been controlled through vaccination and/or the Government make an announcement that it is safe for the United Kingdom to come out of the lockdown”.
ANALYSIS
The SBLT Petition
Ms. Harper's standing to apply
There is a preliminary issue as to whether an application can be made by Ms. Harper to restrain presentation of a petition against SBLT at all, or in any event in circumstances in which there is the GCRO against the company.
Ms. Harper's application expressly states that it is made under r.7.24(1) Insolvency (England and Wales) Rules 2016. That provides,
“An application by a company for an injunction restraining a creditor from presenting a petition for the winding up of the company must be made to a court having jurisdiction to wind up the company.”
(emphasis added)
Rule 7.24(1) does not envisage an application for an injunction being made by any person other than the company. That is not surprising. In general, an injunction will only be granted where there is a threat to do an act which constitutes an invasion of a legal or equitable right of the applicant: see e.g. Fourie v Le Roux [2007] 1 WLR 320 at [25]–[30].
In the context of winding up proceedings, an injunction is granted to restrain the presentation of a winding up petition where the debt is genuinely disputed on substantial grounds. The reason for that is that under the Insolvency Act 1986, a creditor's winding up petition can only be presented by a creditor; that until a person has established that they are a creditor they are not entitled to invoke the statutory process; and the winding up procedure is not for the purpose of deciding a disputed debt: see Stonegate Securities v Gregory [1980] Ch 576 at pages 579–580 referring to Mann v Goldstein [1968] 1 WLR 1091 at pages 1098–1099. The legal right being invaded in such a case is the right of a company not to be subjected to the statutory winding up process other than at the instigation of an undisputed creditor. But that is the company's right, not the right of any director or shareholder.
What Ms. Harper contends in her statement – and Mr. Clark reiterated in submissions – was that as a director and shareholder Ms. Harper would be affected by a petition to wind-up the company and that she should therefore be regarded as having a sufficient interest in the subject-matter of the case so as to justify the grant of an injunction. When pushed on the nature of that interest, however, Mr. Clark could not point to any additional factors that went beyond the mere holding of office as a director or the holding of shares.
I do not consider that the mere holding of office as a director or the holding of shares in a company gives an individual a sufficient personal interest to apply for an injunction to prevent winding up proceedings being commenced against the company.
A director is an office-holder with powers and duties owed to the company under the company's constitution and the general law, and who may be given authority to act as agent on the...
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