Ms. Deborah Cassanova v Mrs Deborah Ann Cockerton (as Trustee of the Estate in Bankruptcy of Deborah Niomi Emily Cassanova)
| Jurisdiction | England & Wales |
| Judge | Addy |
| Judgment Date | 22 June 2021 |
| Neutral Citation | [2021] EWHC 1688 (Ch) |
| Date | 22 June 2021 |
| Court | Chancery Division |
| Docket Number | Case No: BR-2020-000463 |
[2021] EWHC 1688 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BANKRUPTCY COURT
Royal Courts of Justice
Rolls Building, Fetter Lane, EC4A 1NL
Deputy Insolvency and Companies Court Judge Addy QC
Case No: BR-2020-000463
Owen Roach (instructed by Jaycee Gold Solicitors) for the Applicant
Mairi Innes (instructed by Barker Gotelee Solicitors) for the Respondent
Hearing dates: 4 May 2021
APPROVED JUDGMENT
Deputy Insolvency and Companies Court Judge Addy QC:
This Judgment concerns an application made by Deborah Cassanova (the Applicant) against the Respondent, Mrs Deborah Ann Cockerton, who was appointed as the Applicant's trustee in bankruptcy following a bankruptcy order made on 4 October 2016 pursuant to a petition of HMRC. The Applicant has been discharged from bankruptcy on 23 October 2017. The Application which came on for hearing before me on 4 May 2021 was stated to be for –
“permission to bring a claim against the Respondent as the trustee of the bankruptcy estate on the basis that she has misapplied or retained or become accountable for some money or other property comprised in the bankrupt's estate, and / or that the bankrupt's estate has suffered loss in consequence of the misfeasance or breach of fiduciary or other duty by the trustee in the carrying out of her functions. The LEGAL BASIS of the application is Sections 303(1) and 304(1)(a)(b) of the Insolvency Act 1986”
I shall refer to this as the Permission Application.
The hearing of the Permission Application took place virtually, by Microsoft Teams. Mr Roach of counsel appeared for the Applicant and Ms Innes of counsel appeared for the Respondent. Although Mr Roach stated that he was unable to appear on camera for the hearing, his voice could be heard and he confirmed that he could hear the Court and the Respondent's counsel clearly and the parties (and the Court) were content to proceed with the hearing on that basis.
There is a somewhat unusual procedural history to the Permission Application:
i) Following the making of the bankruptcy order against the Applicant, the Respondent was appointed as her trustee in bankruptcy with effect from 27 October 2016.
ii) As part of the administration of the Applicant's bankruptcy, the Respondent sold a rental property known as 8 Northumberland Grove, London N17 0PZ. The sale of that property completed on 13 September 2018 for the sum of £242,500.
iii) As at the date of the bankruptcy order, the Applicant also owned, and occupied, another property known as 166 Billet Road, Romford RM6 5PT. There is a rather convoluted procedural history concerning the Respondent's endeavours to realise this property for the benefit of the Applicant's estate in bankruptcy.
iv) The Respondent was compelled to bring proceedings for possession and sale of 166 Billet Road, which the Applicant sought to oppose on the basis that she had made an application in the High Court challenging various acts of the Respondent and the level of costs and expenses of the bankruptcy ( the 2019 Conduct Application).
v) An order was made for possession and sale in respect of Billet Road in August 2019, with possession to be given up within 56 days of determination of the 2019 Conduct Application, which was itself dismissed by way of consent order on 15 October 2019. Subsequently, the Respondent applied for permission to issue, and duly obtained, a writ of possession and control and eviction took place on 12 February 2020.
vi) Thereafter, the Applicant (along with others) issued an application challenging the lawfulness of such eviction. However, following a full hearing, on 20 August 2020 such application was dismissed and recorded as being “totally without merit”, and the Applicant was ordered to pay (but has not yet paid) the Trustee's costs.
vii) On 2 September 2020, the Applicant then lodged a Claim Form, with accompanying Particulars of Claim, seeking (as stated in the Claim Form) “ an Order of the Court compelling [the Respondent] to give a detailed account of the bankruptcy estate and restraining [the Respondent] from selling the property [meaning the Billet Road property] until the final determination of this case”.
viii) The accompanying document described as Particulars of Claim complain that the Respondent prevented the Applicant's conveyancing solicitors from going ahead with a sale of 8 Northumberland Grove for the sum of £250,000 and instead required them to “hand over” the property to the Respondent as the Applicant's trustee in bankruptcy. The document then further alleges that such “ wholly unreasonable” delay to the sale caused the property to diminish in value to approximately £242,500 and that “ in breach of the trustee's duty” the Respondent had “ so neglected and mismanaged the estate” that it has “ accumulated a debt of £426,326.32”. Various accounts and enquiries, including as to the “ strategy” adopted, are then sought as to the Respondent's administration of the estate in bankruptcy; but whilst language such as ‘ misfeasance or breach of fiduciary or other duty’ is used in the prayer, no particular misfeasance is alleged (other than the previous complaint about the delay to the sale and unparticularised accumulation of debts). Accordingly, on the face of the Particulars of Claim, the only alleged loss which is particularised is the averred £7,500.00 diminution in value of the property.
ix) On 3 September 2020, ICC Judge Mullen directed that the claim form be treated as an application notice, the particulars of claim be treated as evidence in support and a hearing be listed at which the Court was to be addressed on the basis of the application and as to whether permission was required pursuant to section 304(2) of the Insolvency Act 1986 ( IA 1986). I refer to this as “ the Substantive Application”.
x) On 4 September 2020 the Applicant made a further application seeking to restrain the Respondent from selling or otherwise dealing with the Billet Road property until the final determination of the Substantive Application (“ the Injunction Application”) and on 14 October 2020 the Applicant made an additional application seeking an order restraining the Respondent from removing or selling the Applicant's goods within the property at Billet Road until final determination of the Substantive Application (“ the Torts Application”).
xi) Subsequently the Substantive Application, the Injunction Application and the Torts Application all came on for hearing together and, on 5 November 2020, ICC Judge Burton made an order which variously recorded and provided as follows:
a) The Applicant had re-entered the Billet Road property in breach of the possession order;
b) The 14 day notice to the Applicant to remove her goods from the property served pursuant to the Torts (Interference with Goods) Act 1977 had thereby been rendered otiose;
c) The Injunction Application was dismissed as being totally without merit and the Applicant ordered to pay the costs (to be assessed at a later date);
d) The Torts Application was dismissed as being totally without merit and the costs to be paid by the Applicant were assessed on the indemnity basis in the sum of £3,450.00, payable by 17 November 2020;
e) In respect of the Substantive Application, the Applicant was given permission to file an amended Application Notice setting out the legal basis upon which relief is sought and the grounds on which permission is sought pursuant to section 304(2) IA 1986;
f) In addition, the Applicant was directed to file and serve evidence in support of the Amended Application “ to be limited to the Applicant's Application for permission pursuant to section 304(2)”, with consequential directions being made for evidence in response and (if so advised) reply.
g) Paragraph 5 of the Order then provided that “ The permission stage of the Substantive Application pursuant to section 304(2) shall be dealt with as a preliminary issue and shall be listed for … 4 May 2021”.
xii) On 17 November 2020, the Applicant then issued the Permission Application in the terms I have noted above and filed and served a witness statement dated the same date. The Respondent has served a statement in response dated 8 December 2020 (and further to her witness statement dated 26 October 2020 served in accordance with the directions previously made by ICC Judge Mullen) and the Applicant has served a further statement in reply dated 19 December 2020.
It is against that background, that the Permission Application came on for hearing before me. As I have indicated, during the course of the hearing I heard submissions from Mr Roach of counsel for the Applicant and Ms Innes of counsel for the Respondent. Whilst it was unfortunate that neither I nor Ms Innes could see Mr Roach during the course of the hearing, I was satisfied that it did not impede Mr Roach's ability to make submissions on the Applicant's behalf nor the Court's ability to hear and consider them.
Given the hour at which the hearing otherwise finished and the serious nature of the allegations which were being made against the Respondent, I reserved judgment on the Permission Application. Having given the matter careful consideration I am of the view that it would not be appropriate to grant the Applicant permission pursuant to section 304(2) IA 1986 to bring the desired proceedings and accordingly the Permission Application should be dismissed. My reasons for reaching such conclusion are summarised below.
The legal framework and the criteria to be applied to the Permission Application
Section 303(1) IA 1986 states:
“ If a bankrupt or any of his creditors or any other person is dissatisfied by any act, omission or decision of a trustee of the bankrupt's estate, he may apply to the...
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Cassanova v Cockerton
...Cockerton [2021] EWHC 1688 (Ch) was an unsuccessful attempt by the former bankrupt to obtain the permission of the court to bring proceedings against her trustee. The administration of the bankruptcy had not been straightforward by the time the application came before Deputy ICC Judge Addy ......