Marvin Gittins v Serco Home Affairs
| Jurisdiction | England & Wales |
| Judge | Judge Behrens |
| Judgment Date | 20 March 2012 |
| Neutral Citation | [2012] EWHC 651 (Ch) |
| Docket Number | Case No: BK 105A |
| Court | Chancery Division |
| Date | 20 March 2012 |
[2012] EWHC 651 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
LEEDS DISTRICT REGISTRY
ON APPEAL FROM THE KINGSTON UPON HULL COUNTY COURT
DISTRICT JUDGE BESFORD
IN THE MATTER OF MARVIN GITTINS
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
The Court House
Oxford Row
Leeds LS1 3BG
His Honour Judge Behrens sitting as a Judge of the High Court in Leeds
Case No: BK 105A
Tina Kyriakides (instructed by Carrick Read Insolvency) both acting pro bono for the Appellant
Lisa Linklater (instructed by DLA Piper) for the Respondent
Hearing date: 1 March 2012
This an appeal by Mr Gittins against an order of DJ Besford dated 5th December 2011 whereby he annulled the bankruptcy order which he had made against Mr Gittins on 23rd December 2010.
It raises a number of interesting questions. However at the heart of the case is the question of whether Mr Gittins was able to pay his debts as they fell due on the date of the bankruptcy order. In annulling the order DJ Besford held that he was able to pay his debts as they fell due.
On behalf of Mr Gittins, Miss Kyriakides submits that DJ Besford's decision was wrong and that he was insolvent at the time of the bankruptcy order. She accordingly submits that it should not have been annulled.
Before dealing with the appeal in more detail it is right that I should express my gratitude to both Miss Kyriakides and to Carrick Read Insolvency who have conducted this appeal on behalf of Mr Gittins on a pro bono basis. Their submissions have been of the greatest assistance and, if I may say so the appeal bundle is comprehensive.
The facts
There is little if any dispute as to the relevant facts which can be stated quite shortly. Mr Gittins is a prisoner. He has been detained in prison since 2003. He is currently detained at HMP Wolds, Brough East Yorkshire. Prior to that he was detained at HMP Dovegate, Uttoxeter, Staffordshire.
Serco is a private prison operator which is responsible for both HMP Wolds and HMP Dovecote.
Whilst detained Mr Gittins instituted proceedings against a prison officer (Jill Roberts) and Serco under the Race Relations Act. The action lasted 3 days in the Nottingham County Court and was dismissed with costs. On 6 th October 2009 a default costs certificate in the sum of £23,558.71 was issued and Mr Gittins became liable to pay that sum to Serco.
On 30 th April 2010 an application by Serco was heard by DJ Reeson in the Nottingham County Court. Serco appeared by Counsel. Mr Gittins appeared by telephone – presumably from prison. DJ Reeson made an order which, after setting out various recitals continued:
UPON hearing by telephone [Mr Gittins] in person and counsel for [Serco]
AND UPON hearing [Mr Gittins] and [Serco's] oral representations together with the evidence documents and authorities filed.
And the Court directing that [Serco] shall be entitled to disclose to their solicitors and the court [Mr Gittins'] prisoner account records on reasonable request.
IT IS ORDERED THAT
1. [Mr Gittins] do make a 4 weekly contribution towards the outstanding costs at a rate to be calculated in accordance with the following formulas if in any 4 week period [Mr Gittins's] total income and/or receipts from any source:
i) is up to £60 [Mr Gittins] shall pay [Serco] 20% of that sum
ii) is between £60 and £100 [Mr Gittins] shall pay [Serco] 40% of that sum
iii) is over £100 [Mr Gittins] shall pay [Serco] 50% of that sum
iv) the protected earnings level is £30 per fortnight and paragraphs i ii and iii does only apply to sums in excess each 4 weeks.
2. [Serco] shall deduct from [Mr Gittins's] prisoner account directly in accordance with paragraph 1.
3. [Mr Gittins] to pay [Serco's] costs of the application summarily assessed at £1,325.00 to be added to the judgment debt.
There was no appeal against the order. Furthermore in their evidence Serco have exhibited various similar orders made by other judges in other cases. These include an order by Judge Rubery in January 2007 in the Stoke on Trent County Court. According to Sharen James the Probation Service have also obtained similar orders.
Whilst in prison, prisoners are able to "earn" money undertaking various jobs. Any "earnings" are paid into an earnings account. In addition to the earnings account each prisoner also holds a private cash account. This account is used to receive money externally. Thus each prisoner holds two accounts 1. Sharen James has helpfully exhibited the two accounts in respect of Mr Gittins which show:
1. Mr Gittins's earnings were modest. In March and April 2010 the earnings were less than £10 per week. As at 30 th April 2010 there was a credit balance of £29.09 on his wages account. The wages seem to have increased somewhat thereafter and there are a number of weeks where the wages are £11.50. As at the 18 th November 2010 the credit balance was £24.73. On 23 rd December 2010 the balance was £0.12. A total of £25.92 was deducted from this account pursuant to the order prior to 23 rd December 2010.
2. The cash account shows various sums paid in between April 2010 and December 2010. These are contributions made by members of Mr Gittins's family during visits. Many of the contributions are £20 though one was for £50. As at 30 th April 2010 the balance on this account was £42.60. On 18 th November 2010 there was a nil balance on this account. On 23 rd December 2010 the balance had risen to £29.00. A total of £92.00 was deducted from this account pursuant to the Court order prior to 23 rd December 2010. It will thus be seen that money provided by his family was substantially funding Mr Gittins's contribution to the costs liability.
3. A schedule prepared by Serco suggests that the contribution up to the end of November was £103.52. The same schedule shows that a total of £305.75 was due in that period under the terms of the order so that there would appear to have been arrears of just over £200 to the end of November 2010.
On 18 th November 2010 Mr Gittins presented his own bankruptcy petition. In the course of the hearing before DJ Besford he said that his family had said that they would cease sending money for him if the deductions continued. There was further evidence that he had been advised by a debt worker from the CAB (Mrs Evans) that he could apply to vary the order or make himself bankrupt. He chose that option. The Court fees of £450 and £160 were provided by members of his family.
In his statement of affairs Mr Gittins disclosed no assets. He stated that he had no cash in a bank, building society or other account and no cash was held by anyone for him. He did disclose an income of £11.50 per week from working in the prison office. The only creditor was Serco whose debt was stated to be £23,558. [In fact by virtue of the costs order made by DJ Reeson and the liability to interest on the judgment debt the liability was substantially greater than that sum.]. He did not disclose the order of 30 th April 2010. The petition was considered by DJ Besford on 23 rd December 2010 who made a bankruptcy order at 12 p.m.
On 21 st February 2011 Serco's solicitors DLA Piper UK LLP ("DLA") wrote to DJ Besford a long letter making a number of points. The letter points out that Serco have adopted a different approach from the Home Office in enforcing costs orders against prisoners. It is Serco's policy to enforce such orders against the prisoner accounts. It has been Serco's policy to "educate" judges as to the existence of such accounts against which an adverse costs order could be enforced. It made the point that DJ Reeson had considered the matter and been happy to create an "enforcement order". It suggested that the bankruptcy order was an abuse of the process of the Court. DJ Besford described the letter as interesting but made it clear that a proper application was necessary if Serco sought to annul the bankruptcy.
The application to annul was made on 12 th October 2011. It was supported by a four page document setting out the grounds relied on. In summary it submitted that the bankruptcy order should not have been made on the grounds that Mr Gittins was not insolvent. After setting out the history it relied on the fact that DJ Reeson looked at Mr Gittins's ability to pay the debt having regard to his income/receipts in prison and having done so made the order of 30 th April 2010. It pointed out that Mr Gittins had no living costs. It pointed to the "protected" income provision in the order and made the point that Serco was seeking flexible repayments according to the order made by DJ Reeson. It pointed out that repayments in accordance with DJ Reeson's order were made between June and December 2010. It suggested that as Mr Gittins's means had been considered in detail by DJ Reeson in Nottingham it was an abuse of process by Mr Gittins to petition for bankruptcy to the Kingston-upon- Hull County Court without disclosing the order of 30 th April 2010. It suggested that Mr Gittins had misled the Court.
In support of the application Serco relied on two witness statements from a finance officer, Sharen James. It is not necessary to refer to this in any more detail. In summary she submitted that DJ Reeson's order ensured that Mr Gittins could pay his debts as they fell due; the order worked and bankruptcy was not relevant.
The application came before DJ Besford on 5 th December 2011. Serco was represented by Counsel. Mr Gittins was unrepresented though he did have assistance from Ms Evans from the Citizens Advice Bureau. There is a transcript of the...
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