Sarah Helen Bell v Nicola Jane Ide
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 12 February 2020 |
| Neutral Citation | [2020] EWHC 230 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: No 43 of 2019 |
| Date | 12 February 2020 |
[2020] EWHC 230 (Ch)
HHJ Paul Matthews
(Sitting as a Judge of the High Court)
Case No: No 43 of 2019
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
INSOLVENCY AND COMPANIES LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
Steven Fennell (instructed by Hewlett Swanson) for the Applicants
Jessica Powers (instructed by Isadore Goldman) for the Fourth and Fifth Respondents
The other Respondents did not appear and were not represented
Hearing date: 4 February 2020
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.
Introduction
This is my judgment on three applications made within an originating application in insolvency proceedings. The originating application, by the joint trustees in bankruptcy of the first respondent, Nicola Jane Ide, was issued on 30 January 2019 in the County Court at Southampton, where the administration of the bankruptcy was being carried on. The originating application sought orders under sections 339, 340 and/or 423 of the Insolvency Act 1986 against various of the respondents, in respect of payments which had been made by or to them. If a six-year limitation period under the Limitation Act 1980, section 9 (discussed further below), applies to this originating application, and if it commenced on the day on which the trustees in bankruptcy were first appointed, then it is common ground that the application was issued on the last day of that period.
The County Court at Southampton sought further information from the applicants before transferring the proceedings to the County Court at Bristol on 28 March 2019, pursuant to para 3.6 of the Insolvency Practice Direction of 4 July 2018. The County Court at Bristol referred the matter to a district judge and the application notice was endorsed with a hearing date of 9 July 2019 on or about 29 April 2019 and sent back to the applicant's solicitors in May. On 7 June 2019 the applicants made an ordinary application to the court, which amongst other things sought permission to serve the third respondent out of the jurisdiction and (because of that application) sought to vacate the hearing fixed for 9 July 2019.
On 27 June 2019 Deputy District Judge Hebblethwaite considered the matter on the papers, and made an order giving permission to serve out, and to vacate the hearing of 9 July 2019, as well as giving the applicants permission to amend their draft points of claim. Because the order had been made without reference to the respondents, it provided that any of the respondents might apply to set it aside or vary it within seven days of its being served on him or her: see CPR rules 23.9 and 23.10.
The County Court fixed a further hearing for 15 October 2019. Notice of this hearing was sent out to the respondents, and the originating application, as endorsed by the court, was served upon them in September 2019. Although a letter before claim had been sent previously to the fourth respondent (not the fifth), this was the first indication that they had had of the issue of the originating application. At the hearing on 15 October 2019 the district judge gave directions. These were however mainly directions in relation to another ordinary application, issued by the fourth and fifth respondents on 14 October 2019.
This latter was an application essentially for an order to set aside the order made on the papers by DDJ Hebblethwaite, and to strike out the originating application as not having been served in compliance with rule 12.9 of the Insolvency (England and Wales) Rules 2016 (hereafter the “Insolvency Rules”). In addition the application notice sought alternative relief, namely striking out or summary judgment in favour of the fourth respondent so far as relates to the claim in respect of an unlawful preference under section 340, and in favour of the fifth respondent completely.
On 13 November 2019 the applicants issued two further ordinary applications. One was an application for an order declaring that the order of DDJ Hebblethwaite dated 27 June 2019 extended the time for service on the respondents of the originating application or alternatively an order retrospectively extending the time for service on the respondents of that application. The other was an application for an order that the fourth and fifth respondents' application of 14 October 2019 be heard by a judge authorised under section 9 of the Senior Courts Act 1981. It was common ground at the hearing before me that this application was to be understood as an application to transfer the fourth and fifth respondents' application to the High Court from the County Court.
At the hearing on 4 February 2020, sitting as a judge of the County Court, I first heard and determined the applicants' ordinary application to transfer the fourth and fifth respondents' application to the High Court. For the reasons given orally at the time, I allowed that application. Sitting then as a judge of the High Court, I then proceeded to hear the fourth and fifth respondents' application, which, as I have explained, is really two separate applications in the alternative. The application is primarily to strike out the originating application, but if that fails then for summary judgment in respect of substantial parts of it. There was no need for additional argument in relation to the applicants' second ordinary application (to extend time for service of the originating application) because that was really the obverse of the arguments already being made. The oral arguments were complete that afternoon. However, I wished to review the papers and look at the authorities before giving my decision, which accordingly I reserved.
Underlying facts
It is not necessary to deal in any great detail with the underlying facts of the insolvency. Briefly, the first respondent and the second respondent are married. The second respondent was a director of a company called Express Glass and Glazing (New Build) Ltd from 2001 until he resigned on 27 April 2009, the date on which a bankruptcy order was made against him on his own petition. The first respondent was a director of the company from 1 January 2009 until the company was dissolved on 12 July 2013. She had personally guaranteed the company's liabilities to its invoice discounter, a subsidiary of Lloyds TSB Bank. The bank appointed administrators over the company and on 13 April 2012 obtained a freezing order against the first respondent. A bankruptcy order was made against her on her own petition on 6 December 2012.
The applicants' claim against the other respondents is that they received money directly or indirectly from the first respondent's bank account on 11 April 2012, and that those payments amounted to transactions at an undervalue, preferences or transactions defrauding creditors. As against the fourth respondent, the applicants say that the first respondent paid the sum of £485,000 out of her bank account to the fourth respondent on 11 April 2012. The fourth respondent has admitted receipt of this sum, although giving certain explanations which have led to possible alternative cases being made by the applicants. One of these concerns a payment alleged to have been made by the fourth respondent to the fifth respondent in the sum of £72,068.89. I will come back to this.
The application to strike out the claim
The primary case put forward by the fourth and fifth respondents (to whom, for convenience, I will refer to hereafter simply as “the respondents”) in their application is that there was a failure by the applicants to serve the issued originating application on them in compliance with rule 12.9 of the 2016 Rules. That rule reads as follows:
“(1) The applicant must serve a sealed copy of the application, endorsed with the venue for the hearing, on the respondents named in the application unless the court directs or these Rules provide otherwise.
(2) The court may also give one or more of the following directions —
(a) that the application be served upon persons other than those specified by the relevant provision of the Act or these Rules;
(b) that service upon, or the delivery of a notice to any person may be dispensed with;
(c) that such persons be notified of the application and venue in such other a way as the court specifies; or
(d) such other directions as the court thinks fit.
(3) A sealed copy of the application must be served, or notice of the application and venue must be delivered, at least 14 days before the date fixed for its hearing unless —
(a) the provision of the Act or these Rules under which the application is made makes different provision;
(b) the case is urgent and the court acts under rule 12.10; or
(c) the court extends or abridges the time limit.”
On the facts of the present case, it is common ground that (i) the applicants did not serve a sealed copy of the application or a notice of the application and venue upon the respondents at least 14 days before the date originally fixed for the first hearing of this matter, namely 9 July 2019, but that (ii) they did so serve a sealed copy of the application at least 14 days before the date subsequently fixed for the first hearing of this matter, after the order made by DDJ Hebblethwaite giving permission to serve out, vacating the hearing of 9 July and directing that it be relisted in October.
The construction of “the date fixed for its hearing”
Accordingly, the respondents...
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