Vaidya v Wijayawardhana
| Jurisdiction | England & Wales |
| Judge | Sarah Asplin QC |
| Judgment Date | 31 March 2010 |
| Neutral Citation | [2010] EWHC 716 (Ch) |
| Court | Chancery Division |
| Date | 31 March 2010 |
| Docket Number | Case No: CH/2009/PTA/0103 |
[2010] EWHC 716 (Ch)
IN THE APPEAL COURT
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
ON APPEAL FROM DISTRICT JUDGE HUDSON IN THE LINCOLN COUNTY COURT
Before: Sarah Asplin QC
(Sitting as a Deputy High Court Judge)
Case No: CH/2009/PTA/0103
The Appellant/Debtor appearing in person
Mr Paul Kirtley (instructed by Beachcroft LLP) for the Respondent/Petitioner
Hearing date: 12 March 2010
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
Sarah Asplin QC:
This is an application for permission to appeal and if granted an appeal from the decision of District Judge Hudson, made in the Lincoln County Court on 12 January 2009, dismissing the Appellant's application to annul the bankruptcy order made against him on 8 December 2008.
The appeal is pursuant to s375(2) Insolvency Act 1986 and as a result of Rule 7.49 Insolvency Rules 1986 as amended, the procedure and practice in relation to this application is that relating to appeals to the Court of Appeal.
The Notice of Appeal was filed on 25 February 2009, (“the Notice of Appeal”). This matter came before Arnold J on 17 November 2009 and 8 December 2009 and on the latter occasion he made the direction that the appeal should be heard immediately after the application for permission if successful.
Before me, the Appellant, Dr Vaidya has appeared in person. The Respondent Dr Wijayawardhana was represented by Mr Paul Kirtley. Mr Kirtley helpfully set out the background to the case on Dr Vaidya's behalf.
Background
(i) The statutory demand
The statutory demand dated 1 September 2008 upon which the bankruptcy order in respect of Dr Vaidya was based, was served upon Dr Vaidya personally on 12 September 2008. The debts set out in the demand arose as a result of two costs orders made against Dr Vaidya by Her Honour Judge Swindells QC in the Lincoln County Court on the 26 February and 6 June 2008 in the sums of £4,996.14 and £3,420.31 respectively.
The costs orders were in respect of applications made in action number 7GR00416 in the Grantham County Court, in which Dr Wijayawardhana was a claimant both on his own behalf and as a representative of the United Lincolnshire Hospitals NHS Trust, (“the Trust”). In that action, Dr Wijayawardhana had sought an interim injunction preventing Dr Vaidya from contacting him or the Trust directly or from entering the Trust's premises in order to deliver or distribute correspondence to Dr Wijayawardhana, the Trust or its employees. In fact, Dr Vaidya gave voluntary undertakings instead and the costs in relation to which Her Honour Judge Swindells QC gave judgment were incurred as a result of applications made by Dr Vaidya in relation to those undertakings.
The application for an injunction had arisen as a result of proceedings which had been ongoing between Dr Vaidya and Dr Wijayawardhana, a number of his colleagues and the Trust in its capacity as their employer. It appears that there were numerous proceedings and that they all related to claims by Dr Vaidya of harassment, discrimination and other wrong doing, in particular by Dr Wijayawardhana. These were consolidated into a single action numbered 4GR00811, (“the 0811 action”). In that action, Dr Vaidya claims damages in respect of loss of future earnings in the region of £2million.
I was also informed by Mr Kirtley on behalf of Dr Wijayawardhana that Dr Vaidya's complaints had been the subject of a lengthy hearing before the employment tribunal the outcome of which had been that it was found that Dr Vaidya had been unfairly dismissed by the Trust but no damages were awarded in Dr Vaidya's favour or costs orders made.
(ii) Application to set aside the statutory demand
Dr Vaidya made an application to set aside the statutory demand on 22 September 2008. The application was supported by his affidavit dated 19 September 2008. In his affidavit, Dr Vaidya admitted that the costs orders had been made but set out the background to his dispute both with Dr Wijayawardhana and the Trust. Paragraph j of that affidavit reads as follows:
“In August 2004 I filed a claim against the Trust for harassment, breach of contract and other statutes [re. “a-i” above. 4GR00811], to which Dr Wijayawardhana has been later joined as a named defendant.”
Paragraph q is in the following form:
“To the best of my knowledge and belief, Dr Wijayawardhana has made no personal contribution to the legal costs of this Claim No 7GR00416 which he purports to claim through the said statutory demand.”
Finally, at paragraph (6) he added:
“I have a counterclaim pursuant to “j” [re. “a”–”p” above] for a sum vastly exceeding the claim in respect of <
Dr Vaidya's application was dismissed by District Judge Toombs without a hearing, on 1 October 2008 pursuant to Rule 6.5(1) of the Insolvency Rules 1986 (as amended), (“the Insolvency Rules”). The order is headed, “By the Courts own motion” and does not set out the name of District Judge Toombs. The body of the order states that the application was dismissed “as no grounds within the insolvency rules 1986 Rule 6.5(4) are established.” There is no detailed reasoning or express reference to the matters raised in Dr Vaidya's 19 September 2008 affidavit.
Dr Vaidya contends that he heard nothing in relation to his application to set aside the statutory demand until 8 December 2008 when he was handed a copy of the order of 1 October 2008 at a hearing to which I shall refer. Mr Kirtley on behalf of Dr Wijayawardhana does not seek to dispute that this was the case.
(iii) Hearing of the Bankruptcy Petition
In the meantime a bankruptcy petition dated 6 October 2008 was presented. It was served on Dr Vaidya on 25 October 2008. Dr Vaidya completed a form indicating his intention to oppose the application for a bankruptcy order which was dated 27 November 2008. In that notice, Form 6.19, Dr Vaidya stated as follows:
“As stated earlier, I have a massive claim against United Lincolnshire Hospitals NHS Trust, the Petitioner and others from 2004–05–07 that predated Petitioner's counter-claim from 2007. The defendants have serially stayed the determination of this claim by abuse of court's process and the damages and costs recoverable by me exceed this small amount of debt by several fold… This petition is an abuse of court's process by the Petitioner as an attempt to take control of my litigation in which Petition –purporting as creditor – is one of the Defendants.”
This is the same claim which was referred to in Dr Vaidya's affidavit of 19 September 2008 which he filed in support of his application to set aside the statutory demand. It is a reference to the 0811 claim.
The hearing took place before Deputy District Judge Powell on 8 December 2008. It was at this hearing that Dr Vaidya was handed a copy of the order of District Judge Toombs dismissing his application to set aside the statutory demand.
At the hearing on 8 December 2008, the claimant Dr Wijayawardhana was represented by counsel, Mr Normington and Dr Vaidya appeared in person. The transcript reveals that Dr Vaidya addressed Deputy District Judge Powell both in relation to the fact that he had not been aware of the order of District Judge Toombs made on 1 October 2008 until he was handed a copy by Mr Normington at the beginning of the hearing and as to the background litigation. In particular, he made express reference to the 0811 claim which he had commenced in August 2004 and which he had referred to in his affidavit of 19 September 2008 as his claim/counterclaim upon which he relied when seeking to have the statutory demand set aside. These were once again the same proceedings to which he referred in his opposition to the bankruptcy petition, contained in form 6.19 and referred to above.
He also made clear that there was a hearing in relation to the 0811 claim set for 12 January 2009. Mr Normington on behalf of the claimant pointed out that there was no evidence before the court of a counterclaim or set off in relation to the costs which were the basis for the statutory demand and the bankruptcy petition.
In a short judgment, Deputy District Judge Powell made reference to the considerable amount of litigation between Dr Vaidya, the Trust and various doctors in the following way:
“1….. It appears that there has been a considerable amount of litigation involving Dr Vaidya and his former employer, United Lincolnshire Hospitals, and various other doctors involved with that Trust, including employment proceedings and county court proceedings issued by Dr Vaidya.
Dr Vaidya has asked me to adjourn the matter until certain county court proceedings he had issued, which have been adjourned until January next year have been dealt with. However, it is clear, Mr Normanton argues on behalf of the petitioner, that that is wrong in that a proper statutory demand was issued against Dr Vaidya in relation to the two debts claimed and that Dr Vaidya in fact applied to set aside that statutory demand but his application was dismissed by an order dated 1st October 2008.”
In addition, Deputy District Judge Powell addressed the issue of whether Dr Wijayawardhana was the true claimant in the proceedings in which the costs orders upon which the bankruptcy petition was based. He concluded that the costs orders were in favour of Dr Wijayawardhana and stated at paragraph 5 of his judgment, that
“In the circumstances, as there is clearly an affidavit in support of the petition, which I have seen, and there is a certificate of continuing debt...
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