London Borough of Tower Hamlets v Derek Naris
| Jurisdiction | England & Wales |
| Judge | Briggs |
| Judgment Date | 27 March 2019 |
| Neutral Citation | [2019] EWHC 886 (Ch) |
| Court | Chancery Division |
| Date | 27 March 2019 |
| Docket Number | Case No: BR-2016-000741 |
[2019] EWHC 886 (Ch)
IN THE HIGH COURT OF JUSTICE
INSOLVENCY AND COMPANIES COURT
IN BANKRUPTCY
Rolls Building
Fetter Lane
London
EC4A 1NL
CHIEF INSOLVENCY AND COMPANIES COURT JUDGE Briggs
Case No: BR-2016-000741
Mr Holbrook (of JE BARRING LLP) for the Petitioner
Ms Delgado (of BENCHMARK SOLICITORS LLP) for the Respondent
Hearing dates: 19 March 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.
CHIEF INSOLVENCY AND COMPANIES COURT JUDGE Briggs
Chief ICC Judge
Introduction.
This is a disputed petition presented on 6 June 2016 in respect of liability orders made in the Thames Magistrates Court. An order that Derek Naris be made bankrupt is opposed on the ground that there has been a miscarriage of justice. The court should not be satisfied that the debts set out in the petition are payable.
The liability orders.
A total of 8 liability orders were made against Mr Naris. They broadly break down as to five liability orders in respect of non-domestic rates for a property known as Unit 3 100 The Highway (“Highway”) and three liability orders in respect of council tax for a property known as 53 Barnfield Place. In his witness statement dated 11 January 2019 Mr Naris admits that he is liable for 5 of the orders totalling £9,460.91. The five include three in relation to 53 Barnfield for council tax and two for non-domestic rates while occupying the Highway. Mr Naris says “I accept that I am liable for these demands for business rates or council tax and that they were served at my residential address given above or a former business premises of one of the companies.” The dispute relates to the remaining three orders in respect of non-domestic rates for the Highway totalling £75,592.91. Mr Naris explains the nature of the dispute:
“The liability orders concern what is stated to be a premises known as [the Highway]. I do not accept there exists any such address…”
He explains that he took a lease of Unit 2 110 Pennington Street London E1 on 23 January 2011 in the name of James Cartwright. He used false names in the past in order to avoid an order that he be disqualified as a director. That is not relevant to the matter before me today. The only copy of the lease provided to the court defines the demised premises as “all that land situate and known as 110–116 Pennington Street, Wapping, London E1 2BB and 100 The Highway, London E1 ….”. (my emphasis). The lease of the demised premises was registered under one title number. Accordingly, the lease demised to James Cartwright, who accepts he is Mr Naris, was the Highway registered under title number EGL155182 (the “Property”) part of which included 110–116 Pennington Street (the “Lower Ground Floor”).
On 9 May 2011 Mr Naris sub-let the “Lower Ground Floor West, 110–116 Pennington Street” to Urban Enterprise Limited (“UEL”), a company which he owned and managed. He states:
“In or around March 2013 the landlord evicted the company from the subject property, the locks to the subject property were changed. The basis of the eviction was not clear. Whilst I was out of the subject property, the landlord sent people into the premises and smashed them up. I then had to bring an appeal to be readmitted. In July 2013 I reached an agreement with the landlord who let me back into the subject property…[UEL] went into liquidation on 29 August 2013….”
Mr Naris's witness statement states that an underlease of the Lower Ground Floor demised to UEL was subsequently granted to Fast Drinks Limited (“FDL”) on 30 August 2013, although a lease provided to the Court contradicts his statement as it is dated 16 May 2011 and made between UEL and FDL. FDL is a company in which Mr Naris was a major shareholder. Mr Naris's story is confused more by an e-mail sent from a “fastdrinks” e-mail address on 20 December 2011 to “Business Rates” giving notification that UEL was occupying the Highway from 18 April 2011 and “would you please send the business rates bill to us directly as from the date of occupation”. There is also an e-mail dated 4 January 2012 sent from “fastdrinks” that purports to enclose a lease for the Highway which was made in favour of UEL.
The crux of Mr Naris' defence can be gleaned from the following paragraphs of his witness evidence:
“I recall a visit by a rates inspector from the Tower Hamlets Council, Michael Lodge around April 2015. He was enquiring as to who was occupying the premises and he told me that Tower Hamlets Council (the Petitioner) had sent out a number of rates demands to the property recently, but these had been returned in the post. I told him that Fast Drinks Limited was in occupation for the last 2 years but we had not received any rates demands and we had not returned any post. I filled him in with some of the events that had taken place at the premises in 2013 and that, because it had been substantially damaged, the property was not fully occupiable until about March 2014. I suggested that he send the rates demands to 3 Percy Circus as this is the company's registered office. I gave him some contact details and he left me his card. I heard nothing more until I received the statutory demand against me personally which was based on the 3 liability orders …. It now seems apparent that the council had been sending the demands to Unit 4 100 The Highway….which is a different postal address and is why I did not receive them. It is my belief that I did not receive the demands and other documents concerning Liability Orders 3–5 … because the postal address on the demands is incorrect. This is due to the fact that the “Unit 3” address can only be accessed from 110 Pennington Street.”
In his application to set aside a statutory demand served on 21 March 2016 Mr Naris states that he lives at 53 Barnfield place and has “no knowledge of the liability for business rates at [Highway]. I do not own or occupy this property and I have not received any demand for payment and I am not aware of any orders of Thames Magistrates Court.” Mr Naris was the tenant of the Highway. However he has accepted that he is liable for two liability orders in respect of non-domestic rates while occupying Highway. His first witness statement makes this clear “…9 th May is the date when a company known as Urban Enterprise Limited took over occupation of the premises known in the demand as Unit 3 The Highway and I was no longer liable for business rates after this date as the company occupied the premises.”
The appeals
The relevant liability orders were obtained on 2 September 2014, 4 November 2014 and 10 September 2015. The first of the liability orders related to the period commencing 29 August 2013. Mr Naris sought to set aside the liability orders on 3 March 2017 in the Thames Magistrates Court but failed. He appealed but the appeal was dismissed on 27 April 2018 by District Judge McIvor. A second appeal was also dismissed on 9 October 2018 by Sharp LJ and Warby J. The basis upon which the first and second appeals were decided was that there had been a failure to appeal the liability order promptly (within a reasonable time).
Evidence of the London Borough of Tower Hamlets
Mr Uddin is the principle recovery officer employed by the London Borough of Tower Hamlets (“LBTH”). He makes the following points in his third witness statement:
“With regard to the 3rd, 4th and 5th debts the Debtor contends that the premises known as Unit 3 The Highway do not exist…. My response….is as follows.
First, sections 41 and 42 of the Local Government Finance Act 1988 establish the list which names each hereditament…..the hereditament is listed as “Unit 3 At 100 The Highway, E1W 2BX”. Accordingly, correspondence was properly served by the Creditor at this address. Had the Debtor wanted to he could have applied to the Valuation Office Agency to “correct” the entry in the list. He did not do this. Secondly, if any correspondence is returned to the Creditor as undeliverable by the Royal Mail it would be noted on the Creditor's computerised record system and the original would be resent. In the normal post or by email if the Council held an email address. In this case I have checked the Creditor's computerised record system and can confirm that no documents that were sent to the Debtor regarding each of these five debts were recorded as returned. Thirdly, I note that even when the Debtor accepts that he was served such as when they were “served at my residential address”…….he did not respond by either making a payments or attending court to resist the making of a liability order. Fourthly, I am advised that a regular process does not require personal service and that there are irrebuttable presumptions of service that arise under the Local Government Act 1972, s233 (regarding notices served by local authorities) and the Magistrates Courts Rules 1981/552, reg 99 (regarding service of summonses). Finally, this is not an argument that the Debtor raised in the Liability Order proceedings. Indeed, on occasions the Debtor himself referred to the subject premises as “Unit 3,100 The Highway”.
He exhibits the visiting officer's note. The note does not support the evidence given by Mr Naris.
The arguments advanced
Ms Delgado argues that there has been a miscarriage of justice. To quote from her skeleton argument she states:
“Under section 271(1) of the Insolvency Act 1986 the court shall not make a bankruptcy order unless it is satisfied that the debt in respect of which the petition was presented, having been payable at the date of the petition or having since become payable, has neither been paid nor secured nor compounded for. Under section 266(3) of the...
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