Jenny Yang v The Official Receiver and Others
| Jurisdiction | England & Wales |
| Judge | Lady Justice Gloster,Sir Patrick Elias |
| Judgment Date | 10 October 2017 |
| Neutral Citation | [2017] EWCA Civ 1465 |
| Docket Number | Case No: A2/2014/0426 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 October 2017 |
[2017] EWCA Civ 1465
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
MANCHESTER DISTRICT REGISTRY
(His Honour Judge Hodge QC)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Gloster
Vice President of the Court of Appeal, Civil Division
and
Sir Patrick Elias
Case No: A2/2014/0426
The Appellant did not appear and was not represented
Ms Carly Sandbach (instructed by Pannone) for the Second Respondent
Ms Karen Troy (instructed by Quality Solicitors Jackson Canter) for the Third Respondent
Hearing date: 23 March 2017
Further submissions filed: 29 March 2017, 10 April 2017, 21 April 2017 and 11 May 2017
Introduction
This is an appeal by Ms Yang ("the appellant") against the order of HHJ Hodge QC ("the judge") of 18 November 2013, which dismissed an appeal by the appellant against the order of DJ Khan of 12 November 2012.
At the hearing on 23 March 2017 we dismissed applications made by the appellant in correspondence with the Civil Appeals Office, which had sought an adjournment of the hearing, for reasons given in an ex tempore judgment. In essence those reasons were that:
i) The medical evidence was extremely unsatisfactory: the initial medical note from a private medical practice provided no explanation as to why the appellant's condition prevented her from attending; the NHS report merely recorded the appellant's complaint, without expressing any clinical view; and I was not satisfied that I could rely on the short note from a Chinese medical practitioner again recording the appellant's complaint. In any event, the symptoms of which the appellant complains would inevitably reoccur upon any adjourned hearing.
ii) This case has already been subject to inordinate delays. This set of applications appeared to be the fifth incidence of the appellant seeking a last-minute adjournment on one basis or another.
iii) The court has had the benefit of written submissions prepared by counsel on behalf of the appellant.
As a consequence of dismissing these applications to adjourn, and because the appellant had not attended the hearing and was no longer represented, we did not receive oral argument on behalf of the appellant at the hearing. However, until very shortly before the hearing the appellant had been represented by counsel (Ms Cheryl Jones) on a direct access basis. Indeed, on 8 March 2017 the court had received an updated skeleton argument from Ms Jones on behalf of the appellant. We therefore proceeded on the basis of those submissions.
Whilst the appellant had written to the Civil Appeals Office on 13 March 2017 to say that she did not accept the skeleton argument, and had by then dis-instructed Ms Jones, she did not identify any specific points with which she disagreed. Further, it is unlikely that the appellant would have been in a position to add to the written submissions, which accorded with the appellant's position in the hearings below, on issues which are entirely legal in nature. Certainly, there could be no dispute about the documents before the court, which had been filed by the appellant herself (as evidenced by the appellant's email to the court on 7 February 2017).
The court apologises for the delay in the production of this judgment due to pressure of other work.
Factual Background
The appellant owned four rental properties in Manchester. In 2006–2007 Manchester City Council ("the second respondent") designated one of these properties as being a House in Multiple Occupation and raised Council Tax bills accordingly, totalling £1102.54. Following non-payment the second respondent obtained liability orders in that sum, dated 5 October and 23 November 2006 ("the liability orders"). These liability orders – and not the unpaid council tax bills – were the debts upon which the creditor's petition for bankruptcy and the bankruptcy order was subsequently founded.
On 12 May 2009 the second respondent served a statutory demand ("the SD") in relation to the liability orders at 15 Banff Road by way of substituted service. The evidence of the process server was that:
i) On 27 April he attempted to effect personal service at 13 Banff Road, which was the appellant's last known residential address, but was informed by a neighbour that the appellant lived at 15 Banff Road, albeit that the appellant was away until the end of the week. (The appellant did not have any business address.)
ii) On 29 April he sent a letter to 15 Banff Road which explained that he would attempt to effect personal service at 15 Banff Road on 12 May.
iii) On 12 May he attended 15 Banff Road. A different neighbour confirmed that the appellant lived at 15 Banff Road. He therefore inserted the SD through the letterbox before 5pm on this date.
On 2 September 2009 the second respondent issued a creditor's petition. This was served at 15 Banff Road by way of substituted service. No issues arise in relation to the service of the petition: it is not disputed that it was validly served.
On 30 November 2009 a bankruptcy order was made against the appellant ("the BO").
On 15 November 2010, the automatic discharge from bankruptcy was suspended on the application of the Official Receiver (the first respondent, who takes no part in the appeal), following the appellant's non-cooperation. On 16 August 2011 Ms Wright ("the third respondent") was appointed as trustee in bankruptcy.
The appellant's evidence was that:
i) Until 1 January 2009 she had resided at 15 Banff Road, but thereafter she resided at various addresses in Oxford.
ii) In January 2009 she had provided the second respondent with what she described as a "correspondence address". This was the address of a friend, and there was no suggestion that the appellant herself ever resided there. The appellant suggested that this correspondence address was used by the second respondent, albeit in an unrelated context.
iii) On 30 July 2009 she had informed the second respondent that she no longer resided at 15 Banff Road.
iv) She became aware of the SD and creditor's petition only in November 2011.
The appellant has made three applications to annul the BO:
i) An application of 17 November 2011, which was dismissed on 8 February 2012. DJ Smith considered that even if the appellant could set aside the liability orders, this did not afford grounds to annul the BO.
ii) An application of 23 May 2012, which was dismissed on 25 May 2012. HHJ Waksman QC refused this application because he held that there was no arguable ground on which to annul the BO and because the application was an abuse of process.
iii) An application of 28 May 2012 that sought annulment or, alternatively, rescission. This application gives rise to the present appeal.
Before the third application was heard, on 6 August 2012 the Valuation Tribunal found that the second respondent should never have designated the appellant's rental property as a House in Multiple Occupation. Thus it was ordered that the second respondent should remove the appellant from liability from 16 March 2006 to 16 May 2007. Since the appellant had by this time paid the liability orders, the second respondent gave her credit for that sum.
I interpose that, strictly, the liability orders do not appear to have been set aside as they had by then been discharged by the appellant. However, the effect was the same and it was not suggested that the position would have been any different if the liability orders had remained outstanding and had been set aside. It is therefore convenient to refer to the liability orders as having been "set aside", in the sense that subsequently to the BO it was decided that the liability orders should not have been made in the first place.
The third application was heard by DJ Khan, who by his order on 12 November 2012:
i) rescinded the BO on the ground that, whilst the liability orders were extant at the time of the BO, they had been set aside;
ii) refused to annul the BO on that ground; and
iii) ordered that (a) the remuneration and expenses of the trustee in bankruptcy, including litigation costs, and (b) the second respondent's costs were to be paid out of the appellant's estate. (I refer to these the decisions regarding the costs of litigation and the bankruptcy, collectively, as "the costs decisions").
By his order on 18 November 2013, the judge dismissed an appeal by the appellant against the order of DJ Khan.
By their order on 22 April 2015, Patten and Briggs LJJ gave permission to appeal against the judge's order of 18 November 2013.
Relevant statutory material
The appeal turns on the construction of certain statutory provisions relating to service of the SD and the court's powers to rescind and annul a BO. In order to summarise the decisions below and the parties' submissions on the appeal, it is convenient to set out this material. For the avoidance of doubt, in the period between the hearing of this matter and the handing down of judgment, the Insolvency Rules 1986 were replaced by the Insolvency Rules 2016 (operative from 6 April 2017). Such replacement was not retrospective, and accordingly the Insolvency Rules 1986 continue to govern the position for the purposes of this appeal.
Service of a statutory demand
Insolvency Rules 1986 ("Insolvency Rules"), r6.3(2) provides:
" The creditor is, by virtue of the Rules, under an obligation to do all that is reasonable for the purpose of bringing the Statutory demand to the debtor's attention and, if practicable in the particular circumstances, to cause personal service1 of the demand to be effected."
Insolvency Rules, r7.51A(1) provides that Part 6 of the CPR (except r6....
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