Grant v Hayes

A bankrupt’s proceedings are not a nullity merely because the cause of action is vested in the trustee in bankruptcy. At most, commencing or pursuing such proceedings may constitute an abuse of process and expose the claim to strike-out.

An injunction claim under the Protection from Harassment Act 1997 is a separate personal cause of action and remains with the victim. A claim for damages may concern a continuing course of conduct and, where fresh harm is suffered, may give rise to a later cause of action. The court must examine the claim actually established, rather than the wider course of conduct pleaded. A judgment obtained by the bankrupt was therefore not impeached where the surviving harassment claim related only to conduct after discharge.

Stephen Grant, trustee in bankruptcy of Timothy Hayes, sought to set aside or nullify orders obtained by Mr Hayes in harassment proceedings against Mr Willoughby. The trustee argued that the harassment claim arose before Mr Hayes’s 2005 bankruptcy and had vested in the trustee.

In the Cambridge County Court, the claim initially concerned conduct from 2002 onwards. Following appeals, including the Supreme Court decision in [2013] UKSC 17, the surviving claim was confined to harassment and damage occurring after 14 June 2007. Mr Hayes applied to strike out the trustee’s claim or obtain summary judgment against it. The central issues were whether the Cambridge proceedings were a nullity and whether the surviving claims vested in the trustee.

1. Application allowed. The trustee’s claim had no real prospect of success, and summary judgment was entered for Mr Hayes. The action was dismissed.
2. The claim for an injunction under section 3(1) of the Protection from Harassment Act 1997 was a separate cause of action based on a reasonably founded fear of a future breach. It was personal to Mr Hayes and had not vested in the trustee. The injunction granted in the Cambridge proceedings therefore stood.
3. The court considered that a course of conduct under section 1(1) was inherently capable of being a continuing wrong. So long as it continued and caused fresh harm, it could give rise to a fresh cause of action. The judge did not finally resolve how this analysis would operate where a single course of conduct straddled bankruptcy.
4. That issue did not arise on the facts. The Cambridge proceedings, after the successive appeals, established liability only for a wrongful course of conduct beginning on 14 June 2007. Mr Hayes therefore had no claim against Mr Willoughby in existence at the dates of bankruptcy or discharge. The surviving damages claim had not vested in the trustee.
5. The trustee was not bound by findings in proceedings to which he was neither a party nor privy. Nevertheless, that did not alter the conclusion that the only claim established by Mr Hayes was post-discharge and remained his property. Merger of that claim in the judgment did not prejudice any claim vested in the trustee.
6. Lazard Brothers v Midland Bank [1933] AC 289 concerned proceedings involving a non-existent party and did not support treating proceedings brought by a living claimant without standing as a nullity. Pickthall v Hill Dickinson LLP [2009] EWCA Civ 543 established that such proceedings may at most be an abuse of process liable to be struck out.

• Supreme Court: In [2013] UKSC 17, the appeal in the connected harassment proceedings was dismissed. The court held that the relevant purpose under section 1(3)(a) of the Protection from Harassment Act 1997 had to satisfy a rationality test, and liability was confined to conduct after June 2007.
• Court of Appeal: In [2011] EWCA Civ 1541, the appeal was allowed and an injunction was granted, but the Supreme Court subsequently displaced the Court of Appeal’s approach to section 1(3)(a).
• High Court (Chancery Division): The present application for strike-out or summary judgment was granted and the trustee’s action was dismissed.