Summary

The court refused a bankrupt's application for permission to bring a claim against his trustee in bankruptcy pursuant to the Insolvency Act 1986 s.304, where there was no reasonably meritorious cause of action and where the proposed application raised issues which had already been decided against the bankrupt in an application under s.303.

Facts

The applicant applied for permission to bring a claim against the respondent trustee in bankruptcy under the Insolvency Act 1986 s.304.

The applicant had been adjudged bankrupt in October 2012. He claimed that a property sold by a mortgagee, was sold at a significant undervalue. He alleged that he had claims against two accountants who were former advisers and sought the assignment of those claims to himself from the respondent. The respondent refused. The applicant's application under s.303 for an order that the respondent should make the assignment was dismissed as was an application for disclosure. His application to set aside those orders was also dismissed as was his appeal. The applicant's further claim against the respondent for damages for breach of contract and negligence in relation to his conduct as his trustee in bankruptcy was struck out by a district judge. His claims were struck out on appeal (see Reynard v Fox [2018] EWHC 443 (Ch)). A two-year civil restraint order was made against the applicant. It was later decided that the instant application was not caught by the civil restraint order as it had been filed three months before the order was made.

Held

Contract claim - The contract claim was in substance a personal claim and so was outside the scope of s.304. It was not clear from the application notice whether the applicant intended to make a claim in contract as well as tort. But, if it was somehow within the scope of the s.304 claim, it suffered from the same defects as it had in the previous proceedings. Those were that it was inherently unlikely that such a contract existed, there were no particulars of any such contract and there was no evidence before the court on the instant application in support of the contract claim. It was not therefore "a reasonably meritorious cause of action", Katz v Oldham [2016] B.P.I.R. 83 applied. On the material it had no chance of success. The court could not give permission for the contract claim to be brought (see para.28 of judgment).

Negligence claim - The court was only concerned with the heads of claim relating to estate losses. Some of the heads of claim in the particulars concerned estate losses and related to the question of whether the respondent should have pursued claims against the mortgagee and the two advisers. The problem for the applicant was that that question had also been raised in the original proceedings and had failed both before the district judge and on appeal. The position was not different because the applicant was seeking to bring the same claim within s.304. Issue estoppel and abuse of process arose. The claim under those heads failed. There was no point in giving permission under s.304 (paras 29-31).

Application refused