Clarke v Lord Chancellor's Department & Ors

Causes of action vested in a trustee in bankruptcy cannot be pursued personally by the bankrupt. Where the trustee declines to pursue the proceedings, and the bankrupt has no standing, the court may strike out the related appeal or applications. A possible independent claim under section 8 of the Human Rights Act 1998 does not enable the bankrupt to continue an appeal concerning different causes of action. The court may leave open reinstatement if the trustee assigns those causes of action to the bankrupt, without expressing a view on whether such an assignment is appropriate.

The judgment concerned directions in three matters pending before the Court of Appeal. They arose from earlier unsuccessful proceedings brought by Mr Clarke, in which a substantial costs order had contributed to his subsequent bankruptcy. The outstanding matters raised issues concerning judicial independence and the compatibility of section 55(4) of the Access to Justice Act 1999 with Convention rights.

After the Court of Appeal refused permission to challenge the bankruptcy order, the Official Receiver confirmed that the causes of action had vested in him as trustee under section 306 of the Insolvency Act 1986, that he would not pursue them, and that Mr Clarke had no standing to do so personally. The central issue was whether the appeal and applications should be struck out.

Appeal and applications struck out. The application for permission to appeal to the House of Lords was refused. No order for costs was made, and copies of the judgment were directed to be provided at public expense.

1. The causes of action advanced in the three underlying proceedings had vested in the Official Receiver as trustee in bankruptcy by virtue of section 306 of the Insolvency Act 1986. The Official Receiver had decided that pursuing them would provide no benefit to creditors and had no funds, or no disclosed funds, with which to do so.
2. Mr Clarke wished to pursue the appeal and applications, but he was no longer the person in whom the causes of action were vested. He therefore had no standing in those proceedings. The proper course was to strike out the appeal and the two related applications because the trustee did not wish to pursue them and the bankrupt could not pursue them personally.
3. The court did not decide whether Mr Clarke had an independent claim for damages or another remedy under section 8 of the Human Rights Act 1998, or whether such a claim, if arising before the bankruptcy, would itself have vested in the trustee. Any such claim could not be pursued through an appeal in the separate proceedings to which the outstanding matters related.
4. In view of Mr Clarke’s continuing grievance, the court allowed a limited procedural route for restoration. He could apply in writing within three months, or within an extended period if justified, on providing a copy of an assignment of the causes of action from the trustee. The court expressed no view on whether an assignment would be appropriate.

1. Court of Appeal (Civil Division) — In the present judgment, the appeal and related applications were struck out because the causes of action had vested in the trustee in bankruptcy and the bankrupt had no standing. [2002] EWCA Civ 942
2. High Court at Bristol — An appeal against the bankruptcy order was upheld on 8 March 2001.
3. Bristol County Court — A bankruptcy order was made against Mr Clarke on 31 January 2001.