Courtman v Ludlam & Anor

An extended civil restraint order requires persistent claims or applications that are totally without merit. Persistence requires more than the two applications sufficient for a limited order; three are the minimum. The court must identify the view of the judge who determined each earlier application and must not substitute its own view.

Once the threshold is met, the court exercises a proportionate, preventive discretion. The central consideration is the risk of further unmeritorious litigation. A litigant’s sincere belief, past misconduct or criminal conviction does not itself justify an order, but may inform that assessment. Each proposed respondent must meet the threshold independently, although joint conduct may inform the future risk for discretionary purposes.

The trustee in bankruptcy applied for civil restraint orders against the bankrupt and his wife. He also sought relief under sections 366 and 367 of the Insolvency Act 1986, but the substantive issues on that application were resolved during the hearing.

The bankruptcy proceedings concerned the realisation of property formerly held by the respondents. Following earlier unsuccessful challenges to orders concerning that property, each respondent continued to make applications. The trustee contended that their litigation history justified extended orders.

The central issues were whether each respondent had persistently made applications that were totally without merit and, if so, what proportionate restraint was required.

1. Orders made. The court made an extended civil restraint order against Mr Ludlam for two years from 6 August 2009. It made a limited civil restraint order against Mrs Ludlam for the duration of the continuing bankruptcy proceedings, unless otherwise ordered.
2. Threshold for an extended order. Under Practice Direction C to CPR Part 3, a limited order requires two or more applications that are totally without merit. An extended order requires persistence. Applying R (Kumar) v Secretary of State for Constitutional Affairs [2007] 1 WLR 536 and the approach in Bhamjee v Forsdick [2004] 1 WLR 88, the court held that three such claims or applications were the bare minimum for persistence.
3. Earlier orders. When deciding whether earlier proceedings were totally without merit, the court had to ascertain the view adopted, or necessarily adopted, by the judge who made the earlier order. It could not sit as an appellate court and substitute its own assessment. That approach prevented the court from treating certain applications as totally without merit where Morgan J had expressly declined to do so.
4. Discretion and future risk. A restraint order is protective, not punitive. The decisive discretionary consideration was the threat of continued unmeritorious litigation. The court applied the guidance in Bhamjee v Forsdick [2004] 1 WLR 88: a litigant has no right to abuse the court’s process, and an honest belief in the claim does not excuse such conduct. Past conduct and the criminal convictions were relevant only insofar as they bore on future risk.
5. Separate assessment. Mr Ludlam had made four totally without merit applications and presented an extremely high future threat level. An extended order was therefore proportionate. Mrs Ludlam had made only two such applications. She did not meet the separate threshold for an extended order, but her future risk justified a limited order. In exercising discretion, the court could take account of the respondents’ joint conduct in assessing what she was likely to do in future.

High Court (Chancery Division): First-instance determination of the trustee's applications. The judgment records earlier orders and applications within the bankruptcy proceedings, but no appellate history of this decision.