Munday & Anor v Hilburn & Anor [2014] EWHC 4496 (Ch)

'As from the giving of notice under subsection (3) in a case in which no notice has been given under section 293(2), the official receiver shall be trustee of the bankrupt's estate.'

'It is understood that the First Claimant was declared bankrupt on 15 February 2011. The events underlying the claims took place prior to the bankruptcy, and all such claims therefore vest in the Trustee in Bankruptcy and not the First Claimant. No assertion to the contrary has been made by the First Claimant notwithstanding requests for the same from the Defendants. The following is without prejudice to the contentionthat the First Claimant may not bring these claims.'

'As to paragraph 2, the first Claimant denies that he is not able to bring this claim. Whilst it is admitted that he was declared bankrupt on 15 February 2011, the full facts, legal character and modus operandi of the fraud upon which the present cause of action is found was not known to the first Claimant during the 12 month period in which the first Claimant was an un-discharged bankrupt.'

'It seems to me as a matter of law that on the making of the bankruptcy order in 2011 and the appointment of the official receiver the causes of action upon which the first claimant relies vested in the official receiver. Having regard to the decision of the Court of Appeal in Heath v Tang [1993] 1 WLR 1421 and in particular the judgment of Hoffman LJ, as he then was, I have come to the conclusion that the first claimant had no locus to commence the current proceedings. The question is, therefore, as rightly identified by counsel whether the effects of the annulment order of 29 January operate so as to put him back in a position where the causes of action were always vested in him so that he can carry on with these proceedings or whether they are fatally flawed by the fact of him not having a cause of action at the time the proceedings were commenced and whether the proceedings are an abuse of the process.'

'The starting point is that the bankrupt's estate, which included these causes of action, was vested in the official receiver. No specific appointment was made by the Court annulling the bankruptcy order and, therefore, the default provisions apply, namely the bankrupt's estate "reverts to the bankrupt." No terms of the reversion were "directed" by the Court. The question then is what the word "revert" means in the context.'

'Although the Court of Appeal found that there was relevant knowledge in that case, it seems to me that the essence of the decision of the learned judge was the absence of a cause of action. As he says in paragraph 22 of his judgment, "the claimant is the wrong person to assert the cause of action," before adding, "and knows that he is."'

'In my judgment in the present case there is insufficient evidence to show that the first claimant did not have the relevant knowledge. In any event, it seems to me that there can be no doubt that he had no cause of action at the relevant time and did not acquire the cause of action until after the annulment was pronounced by the Court. I would, therefore, categorise the proceedings as an abuse of process and strike them out.'

'28. For those reasons, I have come to the conclusion that the first claimant did not have during the course of these proceedings a right to take proceedings based on the pleaded causes of action. I am not satisfied on the evidence that he did not know the relevant facts. In all those circumstances, I come to the conclusion that this does amount to an abuse of process and the claim should be struck out. 29. So far as the second claimant is concerned, the position of the defendant in the application notice is that the second claimant's claim should be stayed pending the joining of the official receiver. The basis of that submission is that the causes of action are jointly owned and both owners must be claimants to enable the claims to be litigated. Now that the official receiver no longer has a role because she has now been divested of the causes of action and, therefore, cannot be joined to the proceedings in lieu of the first claimant, in those circumstances it seems to me that there would be no purpose in staying the claim because the defect which has been identified by the defendants can no longer be remedied and that, therefore, against the second claimant as well the right course is for the claim to be struck out.'

'(1) The proceedings were an abuse of the process. (2) By virtue of Section 282(4) the causes of action statutorily reverted to D on 29.1.14 and he therefore was not previously entitled to bring this claim. (3) There is no evidence to show that Cs were not aware of his lack of entitlement. (4) It would be wrong in principle to allow C1 now to proceed when he commenced the claim without a right to do so, see Mann J in Pickthall v Hill DickinsonLLP. (5) C2's claim cannot proceed without C1 who must be a party if the claim were to continue.'

'The causes of action, and in particular the causes of action arising out of the option which was granted in respect of the property, are vested in the appellants as trustees. They hold the benefit of the cause of action upon trust for themselves as beneficial joint tenants. However, upon the first appellant's bankruptcy the legal title to the actions which were vested in them jointly would not have passed to the trustee because it is not possible to sever a joint tenancy at law. The consequence of the first appellant's bankruptcy would therefore be that his beneficial interest in the property in the cause of action would vest in the trustee but he would remain trustee with the second appellant, would then hold the property in the claims upon trust for her and the trustee in bankruptcy. On that analysis, it is arguable that the bankruptcy had no impact on the claims at all and that it was properly constituted.'

'"In my opinion, to issue a Writ against a party even in connection with a building dispute where cross-claims may subsequently be made, when it is not intended to serve a statement of claim, and where one has no reasonable evidence or grounds on which to serve a statement of claim against that particular party, is an abuse of the process of the Court."'

"It is an abuse of process to bring proceedings when there is no present intention of prosecuting them and when the plaintiff is unaware of any valid basis for its claim. An individual Writ would be struck out as a matter of course in such circumstances."

'"To my mind at least in the absence of very special circumstances, it could hardly be suggested that it would be a proper use of the processes of the Court to issue a Writ with no intention of following it up with a statement or points of claim, in circumstances where the plaintiffs were unaware of any basis on which they could bring proceedings against the defendants…If a plaintiff starts an action with no present intention of pursuing it, being unaware of any basis for a claim, then on the face of it that plaintiff is not using the processes of the Court for the purposes for which they were designed."'

'In my judgment, when regard is had to these authorities the key question must always be whether or not, at the time of issuing a Writ, the claimant was in a position properly to identify the essence of the tort or breach of contract complained of and if given appropriate time to marshal what it knew, to formulate Particulars of Claim. If the claimant was not in a position to do so, then the claimant could have no present intention of prosecuting proceedings, since it had no known basis for doing so. Whilst therefore the absence of present intention to prosecute proceedings is not enough to constitute an abuse of process, without the additional absence of known valid grounds for a claim, the latter carries with it, as a matter of necessity, the former. If a claimant cannot do that which is necessary to prosecute the claim by setting out the basis of it, even in a rudimentary way, a claimant has no business to issue a Claim Form at all "in the hope that something may turn up."'

'In the cited cases it was at least apparent that if there was a cause of action then the claimant was the right person to assert it in proceedings. In the present case the claimant is the wrong person to assert the cause of action, and knows that he is. The proceedings could immediately be subject to an irresistible application to strike out, precisely for that reason. If those are the only facts, the conclusion that the proceedings are an abuse is inevitable.'

'In my view, the starting point is that where a man starts proceedings knowing that the cause of action is vested in someone else, then it is hard to see why those proceedings are not an abuse. He has started proceedings in which, even if he proves all the facts he wants to prove and establishes all the law he wants to establish, he will still lose because he does not have a right to sue. It is hard to see how that cannot be an abuse. Only people who own causes of action, or who have an appropriate interest in proceedings, have any business asserting the cause of action or starting proceedings. Any other use of the Court's proceedings is improper. The position would be likely to be otherwise if the claimant does not know, or is uncertain, as to whether he has title to the relevant cause of action. In those circumstances, at least until it is authoritatively determined that the claimant does not own the cause of action, it may well not be appropriate to characterise the proceedings as an abuse, but that is different from the case currently under consideration.'

'In Pickthall v Hill Dickinson and another [2009] EWCA Civ 543 (unreported, 11 June 2009) this Court was concerned in part with preventing a litigant from taking a benefit from a past abuse of the court's process by litigating a cause of action which the litigant knew he did not possess. Mr Pickthall commenced negligence proceedings against solicitors at a time when he knew he did not have a cause of action, but hoped that he would obtain one by assignment from the official receiver who had become trustee of Mr Pickthall's estate.'

'Where a bankrupt is commencing or pursuing a claim which he knows he does not have, the abuse of process in commencing or pursuing that claim is obvious. No claimant is entitled to sue on a right which he knows belongs to someone else. The abuse lies in knowingly pursuing a claim which, as presently constituted, is bound to fail. The abuse does, however, depend on actual knowledge of the lack of title to the cause of action, not on what he or she ought to have known.'

'There is insufficient evidence to show that the first claimant did not have the relevant knowledge.'

'I am not satisfied on the evidence that he did not know the relevant facts.'

'There is no evidence to show that Cs were not aware of his lack of entitlement.'

'We note that your client, Kevin Munday, was adjudged bankrupt on 15 February 2011 and was not discharged until 15 February 2012, yet purports to have served the notice exercising the option contained in the first option agreement whilst bankrupt. Could you please let us have evidence that the Official Receiver/Trustee in Bankruptcy was made aware of the existence of the option agreement(s) and that any interest in such option agreement(s) that would have vested in the Official Receiver/Trustee in Bankruptcy had been waived.'

'McFaddens LLP clearly took the view that the First Claimant had the ‘title’ to issue the proceedings, as these were issued about six months after he was discharged from his bankruptcy.'

'This claim relates to events which occurred prior to Mr Munday's bankruptcy and therefore we would ask you to provide confirmation, together with evidence, that Mr Munday's trustee in bankruptcy is fully aware of this claim and Mr Munday's interest in it and provide confirmation, together with evidence, of Mr Munday's trustee in bankruptcy's position in relation to Mr Munday's interest in this claim. In other words, has Mr Munday's trustee in bankruptcy assigned any right of action which is vested in him to Mr Munday or disclaimed his interest in the same and if he has not, please explain the basis upon which Mr Munday has the right to bring the claim.'

'and explained to him that the reason why I was calling was that the defendants' solicitors were pursuing an argument that the claim vested in the official receiver. I told him that the view I took was that the claim was not part of the bankruptcy estate as it was only pursued after Mr Munday was discharged from his bankruptcy and the full factual matrix of the facts giving rise to the fraud were only discovered after February 2012.'

'As I am sure you will appreciate, Mr Munday is not a sophisticated character, and only discovered that he had been the victim of a fraud on or around June 2012. The claim in fraud took some time to unravel. As is common with instances of fraud, victims of fraudulent acts are not immediately aware what has happened. Mr Munday had visited Mr Eppel of McFaddens LLP (my predecessor) after he was discharged from his bankruptcy. The letter of claim was sent on 15 August 2012 and the claim form was issued on 28 August 2012.'

'Mr Hilburn's solicitors are (opportunistically in my view) raising this as a possible issue. This is unfortunate...'

'Having regard to the above, I do not think that an assignment to the right of the action in fraud is required. For limitation purposes, I consider the relevant date to be when the fraud came to my client’s attention. No claim in fraud was considered until on or around June 2012. This is also the relevant date in my view for the purposes of considering whether an assignment of this cause of action is required. Mr Munday was open and disclosed the documents to yourselves but was not aware of any fraud committed until after he was discharged from his bankruptcy.'

'I take the view that an assignment is not required. If notwithstanding the above, you feel that the right of action needs to be assigned to Mr Munday, then I shall be grateful if this can be arranged as soon as possible.'

'I received a call from Mr Quinn. He told me that his duties were to the creditors only and, having regard to those duties, he was unable to give me the assurances which I had requested that the claim did not form part of the bankrupt's estate. He could not confirm the position either way. He told me that it potentially could and put forward three options to the first claimant. Firstly, the first claimant could simply ignore it and see what the judge decided at the trial of the claim. Secondly, the first claimant could seek an assignment of the right of action. He explained that in order to do so, the first claimant would have to pay costs in the sum of £1650 plus VAT and a percentage of the value of the claim. Thirdly, he advised that having regard to the fact that the petitioning debt was only £9,000-odd, he advised that the first claimant could apply to the Court to annul the bankruptcy order made on 15 February 2011. He advised that this would be the most attractive option in light of the small petitioning debt.'

'Although the first claimant's case was that the claim did not form part of the bankrupt's estate, as a belt-and-braces exercise and in order to focus the parties' minds to the essence of the claim as opposed to a submission on whether the claim was vested in the official receiver, the first claimant took the decision to apply to the Court to annul the bankruptcy order. This course of action was recommended to me by the official receiver as the effect of the annulment order would be to restore the first claimant to the position he was in before he was declared bankrupt and he would be treated as if no bankruptcy order was made in the first place.'

'7. For the avoidance of all doubt, the First Claimant does not accept that this request is in any way compliant with applicable law and procedure and the First Claimant is not inclined to reply to a request for information which on its true construction is an exercise in fact finding which bares [sic] no relevance to the material issues in dispute and is confined to the Defendant’s need to support the contention that the First Claimant has no locus standi to bring these proceedings, which for the avoidance of doubt is strongly denied. 8. That the extent that the following may assist the Defendants in dispensing with the aforementioned line of enquiry, the First Claimant will state as follows. At the date the First Claimant was declared bankrupt the property in respect of which these proceedings relate was no longer in the First Claimant's ownership and did not form part of the Bankrupt's estate. 9. The First Claimant has subsequently been discharged from Bankruptcy. Following this, the First Claimant, through his legal representatives has conducted a lengthy investigation into the possible commission of civil fraud, which resulted in the commencement of these proceedings. Throughout this period the First Claimant has not been notified (either directly or through his representatives) of any contemplated intervening action or threat of action by the Trustee in Bankruptcy, a fact which the Defendants should pay considerable regard to.'

'With regards to your clients'

'6. As you will note from Paragraph 3a of the Reply to the Amended Defence, the claim in fraud as it currently stands was only known following the discharge date. 8. The proposed application is bad in law and lacking in locus. It is not within the Defendants' gifts to apply to strike out in circumstances (as in the present case) where disclosure was made upon accrual of knowledge and no interning' – that should no doubt be intervening – 'steps have been taken (for good reason) by the Official Receiver to assign the claim into his name which would be the ordinary course of action in the event that the Official Receiver took the view that the claim vested in the estate. 9. Furthermore, the claim relates to a fraud underscoring a disposition of property which took place before the date of bankruptcy. As a matter of settled law, it could not be said that the First Claimant was obliged to notify the Official Receiver at the date of bankruptcy that the property giving rise to the claim (notwithstanding the fact that the cause of action was not known to the First Claimant) fell within the bankrupt's estate either at the date of bankruptcy or at any time in the subsequent year.'

'We do not understand your purported explanation: a. The date on which your client knew about the claims against our clients is irrelevant. The only question is whether the relevant causes of action had accrued as at the date of his bankruptcy; if so, they are vested in the First Claimant's Trustee in Bankruptcy and, unless and until the Trustee in Bankruptcy assigns the cause of action to the First Claimant, he is unable to bring any claim against our clients.'

'Against the background of the above, you will be aware from our clients'

'Whether or not the First Claimant decided that he had title to sue, is irrelevant. Either he does or he does not. No doubt his legal team would have advised him on the position when first being retained by him and if they have incorrectly advised him, then that is a matter between the First Claimant and his legal team.'

'a. The First Claimant was declared bankrupt on 15 February 2011 (and discharged on 15 February 2012); b. At the time that the First Claimant was declared bankrupt, the causes of action he relies upon against the Defendants had accrued. c. Accordingly, those causes of action vested in the First Claimant's Trustee in Bankruptcy, and the First Claimant has no right to bring the present claims against the Defendants.'

'In the circumstances, it is clear that any causes of action the First Claimant had, vested in his Trustee in Bankruptcy, and that his Trustee in Bankruptcy has neither disclaimed nor assigned those causes of action.'

'The claimants have been represented by counsel since at least October 2011, at which time the first claimant was an undischarged bankrupt. As stated above, I wrote to the claimants' then solicitors on 21 August 2012, a week before the claim form in this matter was issued, raising the issue of the effect of the first claimant's bankruptcy on the claimant's claims. Notwithstanding the first claimant's legal team being on notice of the bankruptcy issue, they nevertheless issued proceedings.'

'I ask the Court to find that the first claimant actually knew at the date when he issued proceedings or during the continuation of the proceedings that the cause of action was not vested in him.'

'On the basis that the Court will grant an annulment of the bankruptcy order, the Official Receiver, on current information, does not intend to progress any right of action that forms part of the bankruptcy estate between now and the hearing of your client’s application.'

'1. By application dated 5 December 2013, Ds applied to strike out C1's claim and to stay C2's claim. The basis of the application is that C1 had no right to bring this claim due to his bankruptcy, and it therefore falls to be struck out as an abuse.'

'Where a bankrupt brings a claim in respect of a cause of action which is vested in his trustee, the bankrupt has no locus to bring the claim. Accordingly, there is an unarguable defence, and C1's case should be struck out, or summary judgment ordered.'

'C1 does not accept that as a principle in law C1 was not entitled to issue proceedings in his name. The claim relates to the fraudulent misrepresentations made by D resulting in the disposition of C's property. At the time of C1's bankruptcy the property to which this claim relates was registered in D2's name and did not fall within C's bankruptcy estate. C nevertheless made full disclosure of the events giving rise to the transfer and sale of this property to his OR who has acknowledged an awareness of these events at all material times.'

'Without prejudice to C1's principle [sic] assertion that the question of C1's locus to issue proceedings has been superseded by the effect of the annulment order, C does not accept that D's calculation as to the correct date of accrual of a cause of action is correct for the purposes of establishing whether C had sufficient locus. Regard for present purposes, must also be had to the actual date of C's discovery of the fraud, which crystallised after the date of C's discharge and which resulted in the commencement of these proceedings, the relevance of which is set out in the two paragraphs below.'

'In giving judgment, Mann J, correctly distinguishes between a Claimant who knowingly issues proceedings in circumstances where he can be said to be aware that the cause of action does not vest in him and a situation akin to the present one, where C cannot be said, on any analysis, to have knowingly issued proceedings in the belief that he had no locus to do so.'

'The claimants say that they did not become aware of the matters which have enabled them to plead their fraud allegations until after the first claimant was adjudicated bankrupt,' a matter which I will mention in a moment. At paragraph [6]: '

'In accordance with modern practice generally, the Court has a general discretion which should not be restricted by hard-and-fast rules of practice, if not of law, such as that which is suggested here.'

'We are in my view bound by Hendry v Chartsearch Ltd., which appears to me also to reflect the appropriate modern approach.'

'I agree with his conclusion' – that is Mance LJ's conclusion – 'that we are bound by the decision of this Court in Hendry v Chartsearch Ltd [1998] CLC 1382. There is no absolute rule of law or practice which precludes an amendment to rely on a cause of action which has arisen after the commencement of the proceedings in circumstances where (but for the amendment) the claim would fail.'

'I agree with My Lords, whose judgments in draft I have had the chance to read, that we are bound by Hendry v Chartsearch Ltd.'

'92. The first argument was that at the time of issue of the claim form Mr Smith had no cause of action at all (or if different, no title to sue at all) and that the claim form was therefore a nullity (or of no effect) and could not be cured by amendment. The judge rejected that argument. 93. In my view the judge was right to do so. Mr Symons relied on the decision of this Court in Ingall v Moran [1944] KB 160. But that decision was on a different point (change of capacity); was described (while still extant) as a blot on English jurisprudence; and has since been overturned by Section 35(7) of the Limitation Act 1980 and CPR 17.4(4). So far as it embodied any larger principle it has been overtaken by the modern approach as described by Evans LJ in Hendry v Chartsearch Ltd [1998] CLC 1382, para 23. In that case this Court disapproved the more rigid approach adopted in Eshelby v Federated European Bank Ltd [1932] 1 KB 254.'

'The modern practice is to allow an amendment, the effect of which is to make good a defect in the claimant's title to sue even though the event relied on did not arise until after the proceedings were issued so that in strict law the claimant did not have a cause of action at the time he issued his process.'

'Those cases do not, in my judgment, help me in construing the section. They are cases which contain general statements about the effects of annulment. Section 282(4) is a specific provision dealing with the ownership of property pre-, during and post-bankruptcy and the wording of it is, in my judgment, perfectly clear.'

'that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the Court.'

'The most important effect of an annulment of a bankruptcy order is that in principle the person to whom the order relates is to be regarded in law as though the order had never been made,' and to similar statements in various authorities collected together in his skeleton as follows: (1) Choudhury v Inland Revenue Commissioners [2000] B.C.C. 765 where Aldous LJ stated at 768: '

'It is trite law that the effect of an annulment is as if the order had not been made which contrasts sharply to a discharge from bankruptcy which, subject to exceptions, discharges the debtor from his outstanding debts.' (3). Smeaton v Equifax plc [2013] EWCA Civ 108 where Tomlinson LJ stated at 49: '

'Faced with that application, Mr Foenander, who has addressed us through Miss Adshead who has been assisting him in this litigation, seeks an adjournment of this appeal. On his behalf she points out that an appeal against the refusal to annul the bankruptcy order may yet succeed; and that if it does, the effect will be that Mr Foenander will have been, throughout, a person entitled to pursue the appeal for which this Court has already given permission. Accordingly, she submits, the opportunity for Mr Foenander to pursue this appeal should be preserved by adjourning the appeal until the question whether or not the bankruptcy order should be annulled has been finally determined; that is to say, first determined by the High Court on appeal from the Registrar, and then perhaps, on any further application for permission to appeal or appeal, by this Court. That may be some way in the future. There is obvious force in her submission that the Court should not dismiss the appeal, on the basis that Mr Foenander has no standing to pursue it, while there remains a possibility that he will regain such standing.'

'2. The position of Mr Hoare would appear to be academic at first blush having retained' – that should be “obtained” I assume – 'the rescission of the bankruptcy order as opposed to its annulment but there are very compelling reasons from Mr Hoare's point of view as to why there should be an annulment, the effect of which means that the bankruptcy order was never made at all where the rescission is a retrospective termination of the bankruptcy. '3. The compelling reasons are the commercial arrangements which Mr Hoare has with third parties as there are clauses which might expose him to pay a substantial sum of money triggered in the event of a bankruptcy order having been made. That is the important difference.'

'We are all of opinion that the judgment of the Court of Exchequer is right and ought to be affirmed. In the first place, it is quite clear that s.81 of the statute applies to the case of a bankruptcy being annulled by whatever means… What, then, is the effect of the section upon such property of the bankrupt? There can be no doubt that if the defendant's bankruptcy had been annulled prior to the bankruptcy of Harvey and Hudson, this would have been money standing to the account of the defendant in their books, which would have formed an item of mutual credit, and which he would have been entitled to set off against the debt due to them… The effect of s. 81 is, subject to any bona fide disposition lawfully made by the trustee prior to the annulling of the bankruptcy, and subject to any condition which the Court annulling the bankruptcy may by its order impose, to remit the party whose bankruptcy is set aside to his original situation. Here the Court of Bankruptcy has imposed no condition; the general provision of the section has therefore its full effect, and that effect is to remit the bankrupt, at the moment the decree annulling his bankruptcy is pronounced, to his original powers and rights in respect of his property. We must therefore look at the money as though it were money paid in in his name instead of in the name of Bullard' – that is his trustee – 'for having become his by virtue of the annulling of his bankruptcy, it is to be considered as his at the moment when it was paid in; as his, therefore, at the time of the bankruptcy of Harvey and Hudson.'

'I am of the same opinion, and I agree with the Lord Chief Justice that it is impossible logically to stop short of giving to the word revert in s. 81 the full interpretation which he has placed upon it.'

'Without determining whether the effect of s.81 is in every case to go back to the beginning, and to place the bankrupt in the position of having always owned what is by the section to 'revert' to him, as to which I do not wish to express any dissent from what the Lord Chief Justice has said, but only to abstain from expressing an opinion, what here appears is that at the time of Harvey and Hudson's bankruptcy a proceeding was going on which finally ended in annulling the defendant's bankruptcy, and this created at least an inchoate equitable claim of such a kind as ought to be taken into account.'

'Where the Court annuls a bankruptcy order (whether under this section or under Section 261 [or 263D] in Part VIII)— (a) any sale or other disposition of property, payment made or other thing duly done, under any provision in this Group of Parts, by or under the authority of the official receiver or a trustee of the bankrupt's estate or by the Court is valid, but (b) if any of the bankrupt's estate is then vested, under any such provision, in such a trustee, it shall vest in such person as the Court may appoint or, in default of any such appointment, revert to the bankrupt on such terms (if any) as the Court may direct; and the Court may include in its order such supplemental provisions as may be authorised by the rules.'

'Itis an offence for a person who is an undischarged bankrupt to act as director of, or directly or indirectly to take part in or be concerned in the promotion, formation or management of, a company, except with the leave of the Court.'

'The question the court has to decide in order for criminal proceedings to be brought under [section 11(1)], is whether at the relevant point in time, which must be when the offence was committed, the person who it is said acted as a director, was then an undischarged bankrupt. The answer to that question in this case is clearly yes. At the time when the first defendant is said to have acted as a director, he was, and there is really no dispute about this, an undischarged bankrupt. The consequence of that is that without more the offence would have been committed, and nothing subsequently, for example the discharge of his bankruptcy rather than its annulment, could have affected that. By the same token, for the purposes of s.15, there would have been at that stage, a contravention of s.11, and that would remain the position, notwithstanding the subsequent termination of the bankruptcy. There is nothing in the 1986 Act by way of specific provision which takes away the criminal liability imposed by s. 11(1) merely because the bankruptcy order is subsequently annulled. And in my judgment, it would be curious if the automatic annulment of the order, which comes about under s.282 on the payment of the indebtedness, had the effect of removing criminal liability which is imposed by s.11 specifically to prevent persons who are at that time, undischarged bankrupts, from participating in the promotion, formation or management of the company. It seems to me that the public interest which is protected by that provision, and in respect of which there can be criminal liability, is, as a matter of principle, entirely unaffected by the fact that subsequently the bankruptcy order is annulled rather than discharged, because the bankrupt was able to pay off his creditors.'

'It seems to me quite clear that the absence of any specific provision to the contrary, means that notwithstanding the subsequent order for annulment, liability under s.11 and s.15 remain intact. For those reasons the annulment point provides, in my judgment, no defence in these proceedings to the claims against either defendant.'

“Mr Dennett [that is the defendant] took the assignment of the mortgage and received the rents and profits as solicitor and agent of the plaintiff and that a relation of principal and agent existed after the bankruptcy.”

'We have no savings. Due to my low wages and Kevin's status as a self-employed builder being unable to work full time since December 2013, we do not have £20,000. We are not in a position to raise finance to cover payment of 20,000 [inaudible] appeal.'

'We know your client is now seeking to cure the position, if indeed it is capable of being cured,' etc. MR JUSTICE NUGEE: Yes. MR LIGHTMAN: '