London Borough of Camden Council v Saint Benedict's Land Trust Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Snowden |
| Judgment Date | 06 December 2019 |
| Neutral Citation | [2019] EWHC 3370 (Ch) |
| Date | 06 December 2019 |
| Docket Number | Case No: 2990 of 2018 |
| Court | Chancery Division |
[2019] EWHC 3370 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN MANCHESTER
INSOLVENCY AND COMPANIES LIST (ChD)
On Appeal from the Order of District Judge Obodai dated 22nd February 2019, sitting in the
Business and Property Courts in Manchester
Sitting at the Leeds Combined Court Centre
1 Oxford Row
Leeds LS1 3BG
Mr Justice Snowden
(VICE-CHANCELLOR OF THE COUNTY PALATINE OF LANCASTER)
Case No: 2990 of 2018
Appeal No. CH-2019-000073
In the Matter of Saint Benedict's Land Trust Limited
And in the Matter of the Insolvency Act 1986
Clive Wolman (instructed by Harrison Carter) for the Appellant
Tom Gosling (instructed by Greenhalgh Kerr) for the Respondents
Hearing date: 29 November 2019
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 an application by Saint Benedict's Land Trust Limited (“SBLT”) for permission to appeal and (if permission is granted) to set aside the order of District Judge Obodai dated 22 February 2019. In that order, DJ Obodai dismissed a winding up petition (the “Petition”) which had been presented against SBLT by London Borough of Camden Council (“LBC”) in respect of eleven liability orders for unpaid business rates made by the Highbury Corner Magistrates Court in 2016 and 2017 in the total sum of £40,103.98. The Petition was supported by Preston City Council (“PCC”) in respect of two unpaid costs orders in the sums of £1,347.50 and £1,400.
The Petition was dismissed because SBLT had paid the underlying debts owing to LBC and PCC after presentation in circumstances to which I shall refer. The District Judge also ordered SBLT to pay the costs of both creditors. However, SBLT contends that the Petition was inherently defective because the witness statement verifying it had not been signed as required by Rule 7.6 of the Insolvency (England and Wales) Rules 2016 (the “Insolvency Rules 2016”). SBLT contends that it was unaware of the defect and that in the belief that the Petition was regular, it was forced to make payment of the amount claimed by LBC to prevent the Petition being advertised. In these circumstances, SBLT contends that the District Judge should have struck it out and awarded SBLT its costs against LBC.
DJ Obodai further declared two applications which had been made by SBLT (i) for the transfer of the Petition to London from Manchester and for it to be struck out as an abuse of process with wasted costs, and (ii) for the hearing on 22 February 2019 to be vacated for further argument on another day, each to be totally without merit. She then made an order under CPR 23.13(2) and CPR 3.11 PD 3C paras 3. 11 or 4.11 for the case to be transferred to a High Court Judge for consideration of whether to make an extended or general civil restraint order against SBLT. SBLT also appeals against those declarations.
Background
As indicated above, the Petition debt of £40,103.98 was the outstanding balance of sums due and payable under eleven liability orders granted by the Highbury Corner Magistrates Court in 2016 and 2017 in respect of unpaid business rates. A letter demanding payment of those sums and warning of the presentation of a petition had been sent to SBLT on 21 September 2018. That letter apparently did not reach SBLT until 5 October 2018. Shortly thereafter, on 8 October 2018, SBLT launched applications to have the liability orders set aside by the Magistrates Court and contended that it would be an abuse for LBC to present a petition.
In response, LBC contended that the orders were regular and long-standing so that the applications to have them set aside were bound to fail on the basis of the principles set out in R v Brighton and Hove Justices [2004] EWHC 1800 (Admin). The solicitors for LBC also asserted that unless and until the liability orders were set aside, they constituted enforceable debts which would found a winding up petition, relying on the provisions of rule 18(2) of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 which deems liability orders to be a debt for the purposes of section 122(f) of the Insolvency Act 1986.
When no payment was made, the Petition was presented to the Business and Property Courts in Manchester on 16 October 2018. The connection of this dispute with Manchester was that the solicitors acting for LBC are based in Wigan and they were also acting for another billing authority before the same court in respect of another contested petition against SBLT based upon liability orders for unpaid business rates.
After presentation of the Petition and further correspondence, the parties were still at odds as to whether the Petition was an abuse of process in circumstances in which SBLT indicated it was challenging the liability orders. At that stage, SBLT applied on 5 November 2018, without notice to LBC, to the High Court in Manchester for an injunction to restrain advertisement of the Petition. The basis for the application was that the Petition debt was genuinely disputed on substantial grounds relating to SBLT's entitlement to a discount from liability for rates on the basis that the premises concerned were used for charitable purposes. The application was refused by HHJ Bird (sitting as a Deputy High Court Judge). Mr. Wolman (who was not the counsel who was instructed before HHJ Bird) was unable to enlighten me as to the basis for that refusal. Indeed, the very fact that such application had even been made was, remarkably, not revealed by SBLT to LBC and PCC, or even to DJ Obodai at the hearing on 22 February 2019. Limited information about it only emerged piecemeal during the course of the hearing before me.
Having failed to obtain an injunction to restrain advertisement of the Petition, on 5 November 2018 the lawyers for SBLT indicated that they would be sending monies equal to the Petition debt to LBC's solicitors on terms that they should be held in a client deposit account for SBLT to await the outcome of SBLT's applications to set aside the liability orders. Without waiting for any agreement to those terms, the monies were sent to LBC's solicitors. On receipt, LBC's solicitors pointed out that it was not open to SBLT unilaterally to dictate the terms upon which the monies would be received by LBC, and that LBC's solicitors would accordingly treat the same as having paid the Petition debt. The solicitors also indicated that since the Petition had not been advertised and there were no supporting creditors, if LBC's costs were paid, LBC would consent to an order that the Petition could be withdrawn in accordance with rule 7.13 of the Insolvency Rules 2016.
SBLT did not agree to that proposal. Instead, on 7 December 2018, shortly before the first hearing of the Petition in Manchester on 10 December 2018, SBLT issued an application (“the First Application”) seeking orders that the Petition should be transferred to the Business and Property Courts in London, that the Petition should be struck out, and for wasted costs. The essence of that application was that London was where SBLT and LBC were based and the appropriate venue for the Petition to be heard rather than Manchester, that the issue of the Petition was an abuse of process in circumstances in which the underlying liability orders were the subject of applications to the Highbury Corner Magistrates Court to set them aside, and that by using the winding up process in such circumstances, LBC's solicitors had caused costs to be wasted unreasonably and improperly. The application indicated that further witness statements and skeleton arguments would be required and that a hearing time of 2.5 hours would be required.
On 10 December 2018 DDJ Brightwell adjourned the Petition and the First Application to be heard in Manchester on 22 February 2019 with a limited time estimate and directions for the filing of evidence and skeleton arguments.
As indicated above, PCC supported the Petition by LBC. PCC had earlier been a defendant to an attempt by SBLT to quash liability orders made by the Preston Magistrates Court. In the course of its challenges, SBLT made a number of applications for judicial review, two of which were dismissed and declared to be totally without merit by Nicklin J on 21 March 2018 and by Andrew Thomas QC (sitting as a Deputy High Court Judge) on 15 October 2018. SBLT was ordered to pay costs of £1,347.50 by Andrew Thomas QC and when it failed to do so, PCC served a statutory demand in that sum on SBLT on 8 November 2018. Bizarrely, SBLT then applied on 30 November 2018 to set that statutory demand aside. PCC then gave notice of intention to support the Petition on 6 December 2018.
SBLT's application to set aside the statutory demand was heard by Deputy ICC Judge Frith on 28 January 2019. At the hearing, SBLT indicated that it would make payment of the £1,347.50 specified in the statutory demand. Deputy ICC Judge Frith then dismissed SBLT's application with an order that SBLT pay costs of £1,400 by 11 February 2019. When that debt was not paid on time, on 13 February 2019 PCC served a further notice of its intention to support LBC's Petition. SBLT then paid PCC's debt on 14 February 2019.
On 20 February 2019, SBLT issued a further application (“the Second Application”) seeking to vacate the hearing of the Petition and First Application which had been listed for 22 February 2019. The basis for that application was an assertion by SBLT that having received a copy of the court file from Manchester on 7 December 2018 (a fact recorded in the First Application) it had...
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...my judgment dismissing SBLT's appeal against a decision of DJ Obodai on an earlier winding up petition brought by Camden and Preston, [2019] EWHC 3370 (Ch) at [21], the Magistrates Court Rules do not govern the conduct of winding up proceedings. The manner in which the facts alleged in a w......
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London Borough of Camden Council v Saint Benedict's Land Trust Ltd
...an appeal by Saint Benedict's Land Trust Limited (“SBLT”) against a decision of District Judge Obodai given on 22 February 2019: see [2019] EWHC 3370 (Ch). DJ Obodai had dismissed, with an order for costs to be paid by SBLT, the winding-up petition which had been presented against SBLT by ......