Philip John Lambert v Forest of Dean District Council
| Jurisdiction | England & Wales |
| Judge | Mullen |
| Judgment Date | 08 July 2019 |
| Neutral Citation | [2019] EWHC 1763 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BR-2016-000707 |
| Date | 08 July 2019 |
[2019] EWHC 1763 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Rolls Building
Royal Courts of Justice
7 Rolls Buildings
London EC4A 1NL
INSOLVENCY AND COMPANIES COURT JUDGE Mullen
Case No: BR-2016-000707
In the Matter of Philip John Lambert
And in the Matter of the Insolvency Act 1986
Mr Paul French (instructed directly under the Public Access Scheme) for the Applicant
Ms Jessica Brooke (instructed by Wilkin Chapman) for the First Respondent
Mr Jonathan Titmuss (instructed by Wilkin Chapman) for the Second and Third Respondents
Hearing date: 9 th May 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.
ICC JUDGE Mullen
ICC JUDGE
Introduction
This is an application by Mr Philip Lambert to annul the bankruptcy order made against him on 12 th September 2016 on a creditor's petition presented on 17 th March 2016. The First Respondent to the application (‘the Council’) was the petitioning creditor and the Second and Third Respondents are the current trustees in bankruptcy appointed to administer Mr Lambert's bankruptcy estate (‘the Trustees’). The debts relied upon in the petition are due under liability orders made by the Gloucester Magistrates' Court made between 24 th April 2012 and 29 th October 2015 on the complaint of the Council. These related to unpaid council tax in respect of several domestic properties and also to non-domestic rates chargeable on a number of properties owned by Mr Lambert at Linear Business Park, Cinderford (‘Linear Park’). The total debt set out in the petition was £72,752.73. The Council has now claimed £119,978.95 in Mr Lambert's bankruptcy, the majority of which debt is again based on liability orders obtained in the magistrates' court.
This annulment application was filed on 12 th November 2018 and is made under section 282(1)(a) of the Insolvency Act 1986 (‘the 1986 Act’) – that is to say that it is made on the basis that the bankruptcy order ought not to have been made. Mr Lambert contends that neither the liability orders on which the petition was based, nor the statutory demand, nor the petition itself were served upon him. Instead, they were served on an address with which he had no connection, being 20–22, Wenlock Road, London N1 7GU (‘the Service Address’). This was a correspondence address given for Mr Lambert on the register maintained at Companies House in his capacity as a director of Paragon House Ltd (‘Paragon’). It was also the registered office address of Paragon itself. Paragon was dissolved on 26 th April 2016 and Mr Lambert contends that he was not aware of the existence of the liability orders, the bankruptcy proceedings or the bankruptcy order until April 2017 when he applied to renew his car insurance and was told that a bankruptcy order had been made against him. Having obtained the witness statements of the process server who is said to have served the statutory demand and attempted service of the petition (‘the Process Server’), he says that these are demonstrably untrue given the nature of the Service Address.
The application is opposed by the Council. It does not maintain that the statutory demand or petition were properly served, although it notes that demands were sent to the Service Address before the dissolution of Paragon and the petition was signed for when served by post at that address in accordance with an order for substituted service. It states that its concession in this regard is purely to avoid a prolonged hearing with cross-examination. The more limited scope of its opposition is that the annulment application is an abuse of process. This is the second annulment application that Mr Lambert has made. The first application (‘the First Annulment Application’) was based on substantively identical grounds but was struck out on 16 th February 2018 following Mr Lambert's failure to comply with an unless order requiring him to comply with an order for costs. In any event, the Council says that the court should exercise its discretion to decline to annul the bankruptcy order as the underlying debt is still due and payable and Mr Lambert is insolvent.
The evidence
This application is supported by the witness statement of Mr Lambert, dated 12 th November 2018. Following issue, Deputy ICC Judge Schaffer directed the filing of evidence in answer by the Council and also a witness statement by the Trustees dealing with:
4.1. the extent to which Mr Lambert had complied with the provisions of the 1986 Act and the Insolvency Rules 2016;
4.2. the extent to which his conduct had increased the costs of the bankruptcy;
4.3. the extent of Mr Lambert's assets and liabilities;
4.4. the current state of the bankruptcy proceedings and progress made to date;
4.5. the likely date on which Mr Lambert became aware of the bankruptcy proceedings.
Mr Lambert was given permission to file and serve any evidence in reply by 4pm on 16 th February 2019. Deputy ICC Judge Schaffer also gave directions for all deponents to witness statements to attend for cross-examination, unless excused.
Mr Lambert's statement exhibits the two witness statements made by the Process Server, dated 1 st February 2016 and 3 rd May 2016. The first statement deals with service of the statutory demand. The Process Server states that he attended the Service Address on 10 th December 2015 and was unable to obtain a reply. On 11 th December 2015 he sent an appointment letter by first-class post to say that he would attend on 21 st December 2015, giving his contact details if Mr Lambert wished to arrange an alternative date for service of the statutory demand. He says that he continued to attend the Service Address periodically, without success, until 29 th January 2016 when he attended at around 7pm and spoke to a woman who confirmed that Mr Lambert lived there. He therefore posted the statutory demand through the letterbox, addressed to Mr Lambert.
In his second witness statement, the Process Server states that he attended the Service Address on 24 th March 2016 in order to attempt personal service of the petition. Having failed to obtain a reply, he sent an appointment letter on the following day by first-class post saying that he would attend again on 8 th April 2016 for the purposes of attempting service. He again gave his contact details in order to arrange an alternative appointment. Having again failed to elicit a reply on 8 th April 2016 he says that he ‘continued calling’ until he attended in the evening of 27 th April 2016 and he spoke to a man at the address who confirmed Mr Lambert lived at the Property.
It was on the basis of these statements Mr Registrar Jones made an order on 18 th July 2016 for substituted service of the petition by sending it by first-class post and first-class recorded delivery to the Service Address. A different process server made a statement dated 25 th August 2016 certifying that service was effected by that method on 16 th August 2016. That having been done the petition came on for hearing and the bankruptcy order was made in Mr Lambert's absence.
Mr Lambert's position in relation to all of this is that he has never lived at the Service Address and never traded from it. The address is an office occupied by Made Simple Group Ltd (‘Made Simple’), a company formation agent. Mr Lambert lives instead in Lower Lydbrook, Gloucester, and this is the address held by the Council for him for the purposes of his council tax liability in respect of that property. His only connection with Made Simple was when he had instructed it in relation to Paragon at a time when they were located at a different address altogether. He exhibits a statement from Mr Oliver Jackson of Made Simple confirming that it has occupied the Service Address since 2014. It closes at 5.30pm so any attendance at 7pm on 29 th January 2016 would have been met with no response. Moreover, there is no letterbox. The company has a dedicated postcode and its post is delivered in bags during the working day. There are a number of photographs that show the Service Address. It is plainly not a residential address. The photographs do seem to show flats on the first floor, above the commercial premises, but, even if this is so, it is not clear if the entrance to those is anywhere near the Service Address.
Mr Lambert contends that the Process Server's statements are simply lies insofar as they purport to record attendance at the Service Address. He also disputes the debts on which the petition is founded. Although he has not explained his dispute in any great detail in his evidence, the essence of his case is that the properties at Linear Park are occupied and that it is the occupier, not he, who is liable for tax at the relevant property. He also goes on to explain the circumstances of the First Annulment Application, which I shall come to in due course.
The Council's evidence in answer is in the form of a witness statement, dated 8 th January 2019, from Mr Thomas Clark, who is employed as the Council's head of revenues and benefits. He sets out the regime relating to the payment of council tax and non-domestic rates and exhibits the liability orders on which the petition was based. He states that, since the making of the bankruptcy order, further debts have accrued such that Mr Lambert was liable for a total debt in the sum of £191,950 at the date of his statement. He explains that Mr Lambert made an application to set aside the liability orders on which the petition was founded in February 2018 but failed to attend the hearing...
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Mr Mohammad Razi Khan v Ms Arvinder Singh-Sall (the Trustee in Bankruptcy of Mr Mohammad Razi Khan)
...including: i) the conduct of the bankrupt ( Artman v Artman); ii) whether insolvency is inevitable ( Lambert v Forest of Dean DC [2019] EWHC 1763 (Ch); Omokwe v HFC Bank Ltd [2007] BPIR 1157; Owo-Samson, above); iii) delay in making the application to annul ( Gill v Quinn [2004] EWHC 883 ......