Levy v Ellis-Carr & Ors

A party who does not attend a hearing cannot use an appeal to obtain indirectly the relief that should have been sought under the setting-aside procedure. An appeal may nevertheless proceed on a distinct ground, but it is confined to a review of the decision below and to the evidence then available.

An adjournment remains a discretionary case-management decision governed by the overriding objective. Late medical evidence must substantiate an inability to participate in the hearing; a bare doctor’s letter will not ordinarily suffice. Where an incapacitated party was unrepresented, CPR 21.3(4) permits retrospective regularisation if that is just. For jointly owned land, the legal title is the starting point and unequal contributions alone do not establish unequal beneficial shares.

The trustee in bankruptcy of the appellant sought to realise the appellant’s interest in a house registered in the joint names of the appellant and his mother. In 2007, Registrar Derrett declared that they held the beneficial interest in equal shares and ordered sale.

After the mother’s death, doubts about her capacity at the 2007 hearing led the trustee to seek confirmation of that order. In May 2011 the Registrar confirmed it, awarded an occupation rent from the mother’s share, and directed payment of earlier costs from that share subject to protections for creditors.

The appellant, who had not attended the hearing, appealed. He challenged the refusal of an adjournment, the confirmation of the 2007 order, the beneficial ownership finding, the occupation rent and the costs direction.

1. Permission to appeal was granted, but the appeal was dismissed. The appeal was a review of the Registrar’s decision. It could succeed only if the decision was wrong or unjust because of a serious procedural irregularity. A non-attending party could not use an appeal to evade the conditions applicable to setting aside an order under CPR 39.3, although a distinct appellate ground remained available: Bank of Scotland plc v Pereira [2011] EWCA Civ 241.

2. The Registrar had ample grounds to refuse the last-minute adjournment. The appellant had repeatedly sought adjournments, had not cooperated in preparing the case, produced no medical evidence before the hearing, and his solicitors deliberately withdrew counsel and did not attend. The later doctor’s letter did not show that he was unable to participate. Medical evidence tendered for that purpose should identify the clinician, the condition, its effect on participation, a reasoned prognosis and the basis for an independent opinion. It remains evidence to be assessed with all the circumstances.

3. The Registrar had jurisdiction to regularise the 2007 proceedings. Under CPR 21.3(4), a court may retrospectively validate steps taken before an incapacitated person has a litigation friend where that is just. The relevant approach was that in Masterman-Lister v Brutton [2002] EWCA Civ 1889. The use of an originating application, rather than a claim form, did not invalidate insolvency proceedings, since CPR 21 applied with necessary modifications.

4. Section 283A of the Insolvency Act 1986 did not require fresh proceedings. The trustee had applied for an order for sale within the applicable three-year period. The remaining issue was to bring those proceedings to a just conclusion after the capacity question arose.

5. The court would not reopen the beneficial ownership inquiry. Since the legal title was in joint names, the question was first whether the parties intended beneficial interests different from their legal interests and, only then, what those interests were. The burden lay on the person alleging a difference. Unequal contributions alone did not establish such a difference: Stack v Dowden [2007] UKHL 17. On the limited evidence and the appellant’s earlier conduct, a further inquiry would not be just.

6. The occupation-rent challenge failed because the appellant had not advanced the legal or evidential points before the Registrar. The costs direction was a permissible practical arrangement because it protected estate and other creditors.

• High Court (Chancery Division): Permission to appeal from Registrar Derrett was granted, but the appeal against her order of 24 May 2011 was dismissed.
• Registrar Derrett: Confirmed the 2007 order declaring equal beneficial shares, varied the distribution of sale proceeds to allow for occupation rent and costs, and preserved protections for creditors.