Cullen v Whinhurst Investments Ltd & Anor

The principle in Henderson v Henderson prevents a party from reopening an issue which could properly have been raised in earlier proceedings, including a later attempt to challenge a long-standing bankruptcy order. On a second appeal, permission is available only where the proposed appeal raises an important point of principle or practice, or there is another compelling reason for the appeal to be heard. An application to set aside a judgment made in a party’s absence requires prompt action, a good reason for non-attendance and a reasonable prospect of success. Each requirement must be supported by evidence.

The proceedings arose from a bankruptcy order made against Mary Cullen in 1987 on a petition by Whinhurst Investments Ltd. Earlier challenges to the bankruptcy order had failed. District Judge Lethem later dealt with applications concerning annulment or review of the bankruptcy order and proceedings brought by the trustee in bankruptcy under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 for sale of the Cullens’ home.

Mr Justice Pumfrey dismissed Mrs Cullen’s appeals against the district judge’s orders. The Court of Appeal considered an application to reinstate an unsuccessful application for permission to bring a second appeal, together with an appeal concerning the refusal to set aside the order for sale. The central issues were whether the proposed bankruptcy arguments could be reopened and whether the requirements for setting aside a judgment made in the parties’ absence had been established.

1. Second appeal. The application to reinstate the permission application was dismissed. Section 55(1) of the Access to Justice Act 1999 and CPR rule 52.13 required an important point of principle or practice, or another compelling reason. The proposed grounds disclosed no such issue.

2. The principle in Henderson v Henderson (1843) 3 Hare 100 applied. Mrs Cullen had had full opportunities to challenge the judgment supporting the bankruptcy notice, the bankruptcy petition and the bankruptcy order. Acting in person did not justify allowing her to raise points which could and should have been advanced earlier. The proposed jurisdictional arguments were in any event without substance.

3. Order for sale. The appeal against the refusal to set aside the sale order was dismissed. CPR rule 39.3(5) required the applicants to show that they had acted promptly, had a good reason for not attending the hearing and had a reasonable prospect of success. No evidence supported the alleged health reasons for non-attendance. The application therefore failed, and the proposed challenge to the sale order also lacked a reasonable prospect of success.

4. The trustee’s delay in commencing the section 14 proceedings did not extinguish accepted creditors’ claims. The order for sale was upheld. The court noted that the trustee would consider a compromise and provide up-to-date evidence of the creditors’ claims.

• Court of Appeal (Civil Division): the application to reinstate the permission application was dismissed, and both appeals concerning the order for sale and possession were dismissed.
• High Court, Chancery Division (Bankruptcy Court): Mr Justice Pumfrey dismissed Mrs Cullen’s appeals against orders of District Judge Lethem, including confirmation of the bankruptcy order.
• District Judge Lethem: orders concerning review or annulment of the bankruptcy order and the sale of the jointly owned home were made; applications to set aside the sale order were dismissed.