Shepherd v the Official Receiver

This is a renewed oral application for permission to appeal against two High Court orders: (1) the dismissal as totally without merit of an application made by Mr Shepherd under section 303 of the Insolvency Act 1986; and (2) an extended civil restraint order made by Morgan J forbidding Mr Shepherd for two years from issuing proceedings or applications relating to the Official Receiver's decision not to pursue or assign claims against the Legal Services Commission without permission. The Court of Appeal refused permission to appeal.

The court emphasised that after Mr Shepherd's bankruptcy his claims against the Legal Aid Board/Legal Services Commission vested in the Official Receiver, who exercised his statutory discretion and concluded there was no reasonable prospect of success. The High Court had repeatedly rejected Mr Shepherd's attempts under section 303 to challenge that decision, several times certifying the applications as totally without merit. The renewed application was an attempt to re-litigate the same issues and amounted to an abuse of process.

The judge's dismissal was therefore justified on grounds of re-litigation and misuse of court resources, and the making of an extended civil restraint order was an ordinary, discretionary response to persistent, meritless repeat litigation. There was no new evidence or arguable basis to disturb those decisions.

Background and parties:

• The applicant, Mr Shepherd, a former solicitor struck off following a 1993 conviction for fraud relating to Green Form claims, repeatedly sought to recover payments from the Legal Aid Board / Legal Services Commission for work he asserted was payable under the Legal Advice and Assistance Scheme.
• Following a bankruptcy order, such claims vested in the Official Receiver, who decided not to pursue them on the basis they lacked reasonable prospects of success.

Procedural posture:

• Mr Shepherd brought multiple challenges to the Official Receiver's decision, including applications under section 303 of the Insolvency Act 1986 and an unsuccessful request for judicial review. Earlier applications were dismissed at various stages and some were certified as totally without merit. An earlier extended civil restraint order was made against Mr Shepherd in 2010 and expired in 2012.
• This appeal is a renewed oral application for permission to appeal to the Court of Appeal against two High Court orders: (a) Mr Kerr QC's order of 6 November 2014 dismissing Mr Shepherd's section 303 application as totally without merit, and (b) Morgan J's extended civil restraint order of 9 February 2015 restricting Mr Shepherd from issuing proceedings relating to the Official Receiver's handling of the bankruptcy matter without permission.

Issues framed:

• Whether there was any real prospect of success on appeal against the dismissal of the section 303 application.
• Whether the extended civil restraint order was justified or an abuse of discretion.
• Whether any alleged procedural or factual errors in earlier decisions undermined the High Court's conclusions.

Court's reasoning and decision:

• The Court of Appeal held the core legal point that once a person is bankrupt any relevant causes of action vest in the trustee in bankruptcy (here the Official Receiver) and it is for the trustee to decide, in accordance with his statutory duties, whether to pursue them.
• The 2014 dismissal was not substantively re‑examined because it rested on the separate and sufficient ground that the application sought to re-litigate issues already resolved in earlier section 303 proceedings; repeatedly re-raising those issues amounted to an abuse of process and misuse of court resources.
• There was no new evidence or arguable ground concerning the bankruptcy order or alleged fraud that would ground a fresh challenge, and such matters were not before the judge or the Court of Appeal on this application.
• The extended civil restraint order was an ordinary exercise of judicial discretion in the context of persistent and meritless repeat litigation and thus provided no basis for intervention by the Court of Appeal.

Relief sought: Permission to appeal against the two High Court orders. The application for permission to appeal was refused for both orders.

Permission to appeal was refused. The Court of Appeal concluded that Mr Shepherd's application under section 303 was an attempt to re-litigate matters already determined and thus an abuse of process; prior applications had been found totally without merit and no new evidence or arguable point was shown. The extended civil restraint order was an appropriate exercise of judicial discretion in response to persistent meritless applications and would not be disturbed.