Duncan Kenric Swift (as trustee of the estates in bankruptcy of Nihal Brake and Andrew Brake) v Nihal Mohammed Kamal Brake
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 08 September 2020 |
| Neutral Citation | [2020] EWHC 2416 (Ch) |
| Court | Chancery Division |
| Date | 08 September 2020 |
| Docket Number | Case No: 166 and 167 of 2015 |
[2020] EWHC 2416 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
INSOLVENCY AND COMPANIES LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: 166 and 167 of 2015
George Spalton (instructed by Kennedys LLP) for the Applicant
Daisy Brown (instructed by Seddons LLP) for the First and Second Respondents
The Third and Fourth Respondents did not appear and were not represented
Hearing date: 7 September 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is my judgment, following a hearing conducted remotely on the MS Teams videoconferencing platform, concerning the costs of the so-called “Cottage Application”. That application was commenced by an originating insolvency application issued on 22 January 2019, initially against the first three respondents only. The fourth respondent was joined by an order made by deputy judge Mr John Jarvis QC by consent on 10 April 2019. The Cottage Application is only a small part of the litigation involving these parties. Summaries of the background are to be found in earlier judgments, for example in Brake and others v Swift and another [2020] EWHC 1810 (Ch), [2] ff.
The Cottage Application was made in the context of the bankruptcies of the first and second respondents, of whose estates the applicant was the trustee, and sought relief under six heads. In summary these were (1) a declaration that the applicant was the sole beneficial owner of a property known as West Axnoller Cottage (“the cottage”), (2) an order that the applicant or a third party might be appointed to transfer the cottage to the fourth respondent, (3) an injunction to restrain the first two respondents from trespassing on or at the cottage, (4) a declaration that a purported declaration of trust made by the first and second respondents and dated 28 January 2015 was void or should be set aside as unlawful or a transaction to defraud creditors, (5) an order that the first two respondents pay the costs of the application, and (6) such other relief as the court might see fit.
The applicant was removed from office as trustee in bankruptcy of the estates of the first two respondents by an order also made by Mr John Jarvis QC by consent, on 6 June 2019. Substitute trustees in bankruptcy were thereafter appointed (again by consent) but they were never joined to the Cottage Application. They later indicated that they did not intend to seek to be joined to that application, and no application to that effect was ever made.
On 4 February 2020 the first and second respondents by application notice sought an order striking out the Cottage Application or alternatively awarding reverse summary judgment upon it (“the strike out application”). However, it was expressly made clear in the application notice that the first and second respondents did not seek to strike out the relief sought in paragraph 4 of that application, that is, alleging that the purported declaration of trust made by the first and second respondents and dated 28 January 2015 was void or should be set aside as unlawful or a transaction to defraud creditors. That part of the Cottage Application remained unaffected by the strike out application.
Other originating insolvency proceedings, known as the Bankruptcy Application and the Liquidation Application, were commenced by the first and second respondents against others including the applicant and the fourth respondent. The fourth respondent issued applications by notice to strike out parts of the Bankruptcy Application and all of the Liquidation Application, and these were listed to be heard together with strike out application in the Cottage Application. They were heard by me, together with certain other matters, during a two-day hearing on 2 and 3 March 2020. I gave extempore judgments in relation to these matters. For the reasons then given, I struck out the whole of the Liquidation Application, and the Cottage Application, except the relief sought in paragraph 4 (see [2020] EWHC 538 (Ch)), and most of the Bankruptcy Application (see [2020] EWHC 537 (Ch)).
The applicant was not present or represented at this hearing. But the fourth respondent resisted the strike out application for reasons of its own. In my ruling on the application to strike out the Cottage Application, I said:
“4. So the position is that Mr Swift is not here to defend his own application. He has indicated he does not want to, or he accepts that he has no power to continue with it. He certainly has no interest in the subject matter anymore, having been removed from office as trustee in bankruptcy, and his successors as trustees in bankruptcy have not unreasonably taken the view that they are not prepared to carry on the application at this stage. They perhaps seek time in order to consider their position. But the fact is that this application has been made and I must deal with it on the basis of the matters or the facts as they are today. I consider that enough is enough. We cannot have applications being dragged out to the crack of doom simply in order to put off the day when the court has to grapple with it.
5. It appears the concern of Chedington has been the fear that there would be some kind of res judicata caused by the application being struck out. Mr Davies QC, on behalf of the Brakes, has made a number of comments which I think have gone some way towards assuaging those fears. For my part, I am doubtful that the successor trustees (not being parties) would be bound in the same way as Mr Swift would be bound by an order of the court putting an end to these proceedings. I think that the right course for the court to take in these circumstances, therefore, is to say that, since the applicant does not want to go on with them, has not appeared to defend them and his successors in title have not indicated that they wish to do so, I should therefore treat this as a case of want of prosecution. As Mr Davies QC reminded me towards the end of his submissions, where want of prosecution is made out, the appropriate course normally is to strike out such a claim. So I am striking it out, not deciding it on its merits.”
The first and second respondents sought an order in respect of their costs of the strike out application against the fourth respondent (who had resisted it). I ordered that the fourth respondent should pay 60% of those costs. They also sought an order in respect of their costs of the underlying Cottage Application against the applicant (who was not present or represented). As to that, in my ruling on costs, I said:
“1. Mr Davies QC applies for his costs of the Cottage Application against Mr Duncan Swift, who is not here. He says that this is a case where there has been a serious breach of duty by the trustee in bankruptcy. Accordingly, I should not only order Mr Swift to pay the Brakes' costs of the cottage application, but I should order them to be paid on the indemnity basis.
2. I have to say that, if the evidence which I have been taken to is true, as I have said in my main judgment, that would disclose a rather alarming state of affairs. I think it right, however, to give Mr Swift an opportunity to say why I should not make such an order against him. I will therefore order that I will consider any written representation that he makes which is lodged with the court within the next three weeks, so 21 days from today at 4.00 pm. That will be Tuesday, the 24th. I will consider any such written representations. Alternatively, he can seek a hearing at which he can be represented or attend in person, and Mr Davies QC or his junior Ms Brown can appear, and I will deal with the question of costs then.”
The order which was made following my rulings read so far as material as follows:
“6. The Cottage Application be struck out save for paragraph 4 of the application notice dated 22 January 2019 which is adjourned generally, with liberty to restore.
[ .. ]
13. Chedington shall pay 60% of the Brakes' costs of and occasioned by their application for the relief ordered at paragraph 6 above.
14. By 4 pm on 24 March 2020, Mr Swift shall:
a. File and serve written submissions setting out why he should not pay the Brakes' remaining costs of the Cottage Application and, in that event, the Brakes may file and serve any submissions in response by 4 pm on 31 March 2020, whereupon the court shall determine the matter on paper;
b. Apply for an oral hearing to determine the question of the remaining costs of the Cottage Application.”
In fact the matter was never dealt with in the way which I envisaged. Eventually, however, the present hearing was arranged, and George Spalton of counsel appeared for Mr Swift, to argue why he should not be liable for the remaining costs of the strike out application on the whole of the costs of the underlying Cottage Application. Daisy Brown of counsel appeared for the first and second respondents to put her clients' case that the applicant should be so liable. I am very grateful to both of them for their succinct and pertinent arguments.
So far as concerns the outstanding issue in the Cottage Application, it appears that there is ongoing correspondence between the relevant parties as to the resolution...
To continue reading
Request your trial
-
Gloyd Robinson v The Bermuda Civil Aviation Authority
...not ordinarily be reflected in an order for indemnity costs. Of course, there can be exceptions in extreme cases (see Swift v Brake [2020] EWHC 2416 (Ch), per HHJ Paul Matthews at [19]). Ordinarily something more is required than findings by the court that the losing party's legal analysis......