Sheida Oraki and Another v Timothy Bramston and Another
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Proudman |
| Judgment Date | 15 July 2015 |
| Neutral Citation | [2015] EWHC 2046 (Ch) |
| Docket Number | Case No: HC 2013 000003 |
| Court | Chancery Division |
| Date | 15 July 2015 |
[2015] EWHC 2046 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Proudman
Case No: HC 2013 000003
Paul French (instructed by Hines & Co) for the Claimants
John Briggs (instructed by DAC Beachcroft LLP) for the Defendants
Hearing dates: 24/25/26/27/28/31 03 and 01/04 2015
Background
In this case the claimants, Dr Sheida Oraki and her husband Mr Ardeshir Oraki (together "the Orakis", although Dr Oraki has very much taken the lead in all correspondence and in this action, apparently acting under a power of attorney from her husband) were made bankrupt (on 10 January 2006 and 1 September 2005 respectively) on petitions based on a judgment of Deputy District Judge Sheldon at Brentford County Court dated 16 February 2004 ("the Judgment") for costs of an entity Dean and Dean ("the firm") which was apparently at that time a firm of solicitors. Although the Orakis each received their discharge one year after the bankruptcies pursuant to s. 279 (1) Insolvency Act 1986 (" IA") they continued to challenge the fact that they had been made bankrupt.
There were many deficiencies in the Judgment and thus the bankruptcy order. The firm was intervened in by the Law Society towards the end of 2008 and the principal of the firm, Mr Shahrokh Mireskandari, a flamboyant character with powerful friends, such as Mr Keith Vaz MP and Commander Ali Dizaei of the Metropolitan Police, was struck off the roll of solicitors by an order dated 21 June 2012 of the Solicitors Disciplinary Tribunal. Many findings of professional misconduct were made against him, including findings of dishonest misrepresentations as to his professional status, academic qualifications and experience whereby he gained admission as a solicitor. He had been convicted of fraud in California.
Mr Robert Ham QC, sitting as a deputy judge of the High Court, by Order dated 21 January 2013, allowed in fresh evidence about the professional misconduct proceedings. He then found ("because of the decision of the Solicitors Disciplinary Tribunal": see [11]–[12] of his judgment) pursuant to s. 282(1)(a) IA that the bankruptcy orders should never have been made, and granted the Orakis annulment of their bankruptcies subject to conditions. He thus allowed an appeal from Deputy Registrar Cheryl Jones's dismissal on 9 April 2010 of the application to annul.
Mr Ham QC also allowed an appeal against an order of HHJ Oppenheimer dated 11 January 2010 which set aside the Judge's earlier order of 9 November 2009, "in the light of the additional evidence I have admitted", (see [17]). This in effect (although not technically) allowed an appeal against the Judgment since the order of 9 November 2009 set aside the Judgment.
The Orakis were represented before me by Mr Paul French of counsel and the defendant trustees in bankruptcy by Mr John Briggs of counsel. The parties had originally certified the case as lasting four days, which was clearly an underestimate, bearing in mind the number of witnesses (six) and the points of law and fact arising. The defendants had revised this estimate but the Orakis had not. Mr French told me in criticism of Mr Briggs that the original time estimate was four days and when I pointed out that this was preposterous for a trial of this sort, he merely said that for a time estimate of four days he would have curtailed his cross-examination accordingly. Although I asked for an updated trial timetable each morning where required so that I could guillotine the parties if necessary, counsel thought that it was in order to settle the matter between them and Mr French sought on each occasion to argue the toss with me. It was only after much explanation on my part that I was provided with what I had asked for, a matter for which I give credit to Mr French's instructing solicitor Mr Hines.
The requirement in Mr Ham QC's order was that the Orakis should make three payments: (i) that they should pay the costs of the Official Receiver relating to the bankruptcies, (ii) that they should pay the costs of the Trustee of and occasioned by the applications made by the Orakis on the indemnity basis and (iii) that they should pay the costs and expenses of the bankruptcies. In addition, proving creditors were to have 42 days from the date of the order to apply to the court for the imposition of additional conditions (on the basis that the ability to recover the debts had been prejudiced) before any order annulling the bankruptcy was made. The Trustee was entitled to retain and realise assets out of the estates of the Orakis sufficient to discharge their liabilities under [8] and to distribute dividends to proving creditors other than the firm. The Orakis gave an undertaking not to defend any claim by proving creditors on limitation grounds.
The conditions imposed by Mr Ham QC have not been satisfied because, as they were entitled to do, the Orakis have challenged the Trustee's costs and expenses. The bankruptcies therefore continue during the relevant period and there is a new trustee who has replaced Mr Defty, Mrs Michaela Hall ("Mrs Hall"). However since the Orakis are claiming that the Trustee should have no remuneration because they have caused the bankruptcies to be unnecessarily prolonged and are in breach in that they have failed to pursue debtors and maintain property in the estates, the trusteeship has effectively ground to a halt.
The Orakis contend that the Trustee did not comply with [6] (leading to [7]) of the order, requiring him forthwith to serve the proving creditors with a copy of the order, and [11], requiring him to "endeavour to agree" with the Orakis which assets to keep as security for discharging the Orakis' obligations under the order and for distributing dividends to all proving creditors other than the firm while returning the rest.
It was common ground before me that the burden was on the Orakis to prove that the creditors were not so served. It seems to me that the Trustee did serve the creditors, or at any rate that the Orakis have not proved that they did not. However if that matter is live before the judge who determines the matter of the Trustee's costs and expenses, nothing I say should be taken as binding him or her on that application. It may be that insufficient evidence was adduced for present purposes.
[11] follows [10] and cannot in the circumstances yet be satisfied. It is anyway open to the Orakis to apply to the court under the terms of [11] for a determination of this issue and for any consequential orders that may be necessary.
In this action the Orakis contend that the Trustee (an expression I shall use to refer compendiously to the first defendant Mr Bramston who was appointed as trustee in bankruptcy with effect from 19 April 2007 (taking over from the Official Receiver after discharge from the bankruptcies) until he handed over to the second defendant Mr Defty in December 2008, and Mr Defty thereafter) simply did not do his job properly. It is alleged that the Trustee mismanaged the bankruptcy estates, causing the Orakis loss and damage. The pleaded claim is essentially one of professional negligence, but added to that are claims of improper conduct.
The Orakis were in what I can only describe as a Kafkaesque situation. Dr Oraki has always stoutly maintained, and so it has proved, that they were wrongly made bankrupt but no-one in authority would listen to them when they said so. Appeal after appeal and application after application were dismissed. The Orakis tendered the amount of the petition debt to the petitioners shortly after the bankruptcies by way of a banker's draft from third party funds but it was refused. They say that they also produced a cheque from their own funds for the same amount prior to their bankruptcies in order to avert bankruptcy but that this cheque too was refused. I note (see [2] of Floyd LJ's judgment and [3(4)] of Mr Ham QC's judgment) that it was found as a fact that the firm, "refused to accept payment of the full amount of the judgment debt unless the appellants withdrew a complaint to the Law Society." The Orakis repeatedly asked the Trustee for a final figure to pay off the bankruptcies but one was not forthcoming other than the estimated outcome statements. Then, although it must have been obvious, the Orakis say, that there was always going to be a surplus, and a large one at that, the Trustee proceeded to realise properties used in the family for a business and also the home in which they lived.
Dr Oraki sees conspiracies everywhere, and refuses and has always refused to accept the fact of her bankruptcy, believing that she has been totally vindicated by events. Although she is wrong in many instances, I do not entirely blame her. She is a lay person in, as I have said, a Kafkaesque situation. Because the first defendant was appointed at the instance of the firm, she regards him as tainted, and she has accused every solicitor with which she has had dealings of being in league with Mr Mireskandari. Although I do not find any conscious wrongdoing by either of the defendants, I cannot be as robust as Mr Briggs in dismissing all these allegations as nonsense since in other unconnected cases (I am referring to the sexual wrongdoing by Jimmy Savile and others) it is clear that powerful people, of whom Mr Mireskandari was one, have powerful friends and exert a far-reaching influence that ought not to be so dismissed. Dr Oraki told me that Mr Mireskandari said he could and would break her and I have no doubt that before he was exposed he could do so.
Again, Dr Oraki in her oral evidence said that she did not believe that the Judgment on which the petition was based could have...
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