Ms Irena Ferme v Mr Simon Matthew Gwinnutt (as joint liquidator of Emma Property Management Ltd)
| Jurisdiction | England & Wales |
| Judge | Jones |
| Judgment Date | 09 August 2023 |
| Neutral Citation | [2023] EWHC 2035 (Ch) |
| Court | Chancery Division |
| Docket Number | CASE NUMBER: CR-2022-004001 |
[2023] EWHC 2035 (Ch)
INSOLVENCY AND COMPANY COURTS JUDGE Jones
CASE NUMBER: CR-2022-004001
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
IN THE MATTER OF EMMA PROPERTY MANAGEMENT LIMITED (IN LIQUIDATION)
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
The Applicant in person
Mr Simon Jones (instructed by Excello Law Limited) for the Respondent
Hearing date: 29 June 2023
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.
………… 9/8/23 ……………..
I.C.C. JUDGE Jones
I.C.C. JUDGE
This judgment decides the second part of an appeal made against the refusal to admit a proof of debt. It is brought under r.14.8 of the Insolvency (England and Wales) Rules 2016.
It should first be recorded that during the hearing oral judgment was given refusing the applications of Ms Ferme for: (i) a default judgment for failure on the part of the Respondents to serve an acknowledgment of service (that not being the procedure that applies upon this appeal application); and (ii) dismissing the appeal in respect of a provable debt alleged to have resulted from an entitlement to be paid commission. A decision reached for the reason that there was no binding contract giving rise to a debt because the written “offer” relied upon by Ms Ferme to establish a contract by her acceptance was expressly written to be an “ex gratia” offer.
I will not repeat further the reasons for that decision. However, it is of deep concern and should be recorded that Ms Ferme threatened me verbally at the remote hearing as soon as I had delivered judgment. The threats, delivered in aggressive terms and manner, being implied from the words used when she asked me if I knew what happened to Judges in America who made decisions such I had, and being made expressly when she stated that personal claims would be made against me because of my decision here and abroad.
Absent any indication of apology or remorse from Ms Ferme, I stated at the time my disapproval, my conclusion that this was a contempt of court, and the reasons for my deciding nevertheless to continue to hear the second part of her application “without fear or favour”. The ability to do so is, after all, one of the fundamental reasons for judges having immunity from any action brought against them in reliance upon a judgment delivered by them. This was, nevertheless, wholly unacceptable conduct. As also explained, if the decision I made was in error, Ms Ferme can apply for permission to appeal. That is an application which may be made to me and/or to a High Court Judge. The solution of a dissatisfied litigant is not to threaten the judge.
I now put that aside and turn to this second part of the appeal. This reserved judgment concerns her claim as an assignee to be entitled to prove for interest resulting from the delay in Emma Property Management Limited (“the Company”) making payment of £40,800 to the assignor. It is her case that had the Company agreed to make that payment to the assignor on 20 December 2018 from cleared funds but had not paid it until 15 June 2020.
The proof of debt being appealed, dated 7 October 2022 was submitted by Dr Borut Samastur. He claimed: £5,589.16 interest for the period of non-payment “(minus below specified solicitor's costs and minus statutory compensation of £100.00)”. Those costs were stated to be £900.09 plus legal interest “of delay from 20/5/2020 by the day of payment”. £100.00 statutory compensation was also claimed for the same period. In addition £100 was claimed for expenses concerning “(time, collection of documents) on this application”. The assignment relied upon by Ms Ferme is dated as made on 30 October 2022. The validity of the assignment has not been challenged.
The judgment was reserved in circumstances of Ms Ferme being unable to do more than assert that interest and the other sums claimed were due as a matter of law. She had included within her evidence a document printed from the internet site which she said had been used to calculate the interest sum of £5,589.16. However, she could not identify the bases upon which that calculation had been made or assist further than to point to the document which did not further assist to identify the law relied upon for the calculation.
I needed time to consider the merits of her case in the light of the absence of further assistance from her (recognising as I do the difficulties for a litigant in person) and in the context of counsel for the liquidators, Mr Jones, fulfilling his duty by providing as much assistance to the Court as he could. That included a detailed analysis of the law and him drawing attention to evidence that Ms Ferme might have referred to if she had had the assistance of lawyers. I consider her behaviour towards him during the hearing and her repeated insistence that he had no right to be at the hearing completely inappropriate.
Mr Jones submitted that it appeared from the break-down of the sums claimed that Ms Ferme was probably relying upon The Late Payment of Commercial Debts Interest Act 1998 (“ the 1998 Act”). He referred in particular to the interest rate used and to the £100 compensation appearing to be derived from its s.5A(2)(c). He submitted, however, that the 1998 Act did not apply to this case. I will address that first.
Factually, the claim for interest relies principally upon an email from the Company sent by its director on 20 December 2018 stating that cleared funds would be available by 29 December 2018. This email refers to a transaction for the purchase of two flats by Dr Borut Samastur for which contracts had been exchanged (although they were not produced in evidence) but for which completion had not occurred. The email correspondence revealed that the Company and Dr Borut Samastur had agreed during November 2018 to the termination of those contracts, and to the return of his deposit plus £3,500 for his legal costs and interest. This gave rise to the debt that was paid on 15 June 2020 but which Ms Ferme contends should have been paid on 29 December 2018.
As a result of non-payment by 29 December 2018, Dr Borut Samastur instructed Mr Mark Davies of Healys LLP which caused him additional costs. Mr Davies estimated his costs at £1500, although it is unclear from Mr Dr Borut Samastur's witness statement if that is an estimate of costs incurred or which might be incurred.
Nevertheless the point that flows, and is not in dispute, is that the proof of debt relates to the consequences flowing from the delayed return of deposits for the purchase of the two flats, a delay of over 18 months. I will first address the main part of the proof, the claim for interest.
The 1998 Act provides for interest to apply to any “qualifying debt”. Section 2 defines the circumstances in which the Act will apply as follows:
(1) This Act applies to a contract for the supply of goods or services where the purchaser and the supplier are each acting in the course of a business, other than an excepted contract.
(2) In this Act “contract for the supply of goods or services” means—
(a) a contract of sale of goods; or
(b) a contract (other than a contract of sale of goods) by which a person does any, or any combination, of the things mentioned in subsection (3) for a consideration that is (or includes) a money consideration.
(3) Those things are—
(a) transferring or agreeing to transfer to another the property in goods;
(b) bailing or agreeing to bail goods to another by way of hire or, in Scotland, hiring or agreeing to hire goods to another; and
(c) agreeing to carry out a service.
(4) For the avoidance of doubt a contract of service or apprenticeship is not a contract for the supply of goods or services.
(5) The following are excepted contracts—
(a) a consumer credit agreement;
(b) a contract intended to operate by way of mortgage, pledge, charge or other security; and
(c) …………………………..
(6) …………………………..
(7) In this section—
• “business” includes a profession and the activities of any government department or local or public authority;
• “consumer credit agreement” has the same meaning as in the Consumer Credit Act 1974;
• “contract of sale of goods” and “goods” have the same meaning as in the Sale of Goods Act 1979;
• “government department” includes any part of the Scottish Administration;
• “property in goods” means the general property in them and not merely a special property.
Applying those provisions, I accept Mr Jones's submission that the 1998 Act only applies to commercial contracts for the supply of good or services. I accept his submission that an agreement to return a deposit for the purchase of land is not a contract for the supply of goods or services. There was no qualifying debt and, therefore, the claim for interest and for the other sums sought cannot be made in reliance upon the 1998 Act.
A purpose of The 1998 Act was to address the fact that the common law did not provide for interest to be paid if debts were not paid on time unless there was a contractual agreement providing for the payment of interest. The email correspondence relied upon by Ms Ferme makes no reference to interest. There is no evidence of any contractual term providing for interest.
If Dr Borut Samastur had started proceedings to recover the debt...
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