Shepherd v the Official Receiver

Following bankruptcy, claims vested in the trustee in bankruptcy and the bankrupt could no longer pursue them personally. An application under the Insolvency Act 1986, section 303, cannot be used to reopen and reargue the same challenge to the trustee’s decision after earlier applications have been decided. Repeated attempts to relitigate the issue may constitute an abuse of process and be certified as totally without merit.

An extended civil restraint order is appropriate where repeated meritless applications indicate an intention to continue. Permission to appeal must be refused where the proposed appeal has no real prospect of success and there is no other compelling reason for it.

Following his bankruptcy, the applicant sought repeatedly to challenge the Official Receiver’s decision not to pursue claims against the Legal Aid Board or assign them to him. A High Court judge dismissed a further application under section 303 of the Insolvency Act 1986 as an attempt to relitigate matters previously decided and certified it as totally without merit.

A second High Court judge made an extended civil restraint order for two years. The applicant renewed applications for permission to appeal against both orders. The central issues were whether the section 303 application was abusive, whether the restraint order was properly made, and whether either proposed appeal met the permission threshold.

1. Applications refused. Lord Justice David Richards refused permission to appeal against both the dismissal of the section 303 application and the extended civil restraint order.
2. Section 303 application. The lower judge was clearly entitled to treat the application as an attempt to reopen and reargue the same challenge to the Official Receiver’s decision that had been raised in several earlier applications. The decision did not depend on the merits of the underlying claims against the Legal Aid Board. Repeated litigation of matters already decided was an abuse of the court’s process, and the application was properly certified as totally without merit.
3. Points not material to the appeal. Any uncertainty in the lower judge’s description of the date on which an earlier claim was struck out could not undermine his decision. Arguments concerning the applicant’s pre-bankruptcy dealings with the Legal Aid Board could not establish a right of appeal against the section 303 decision. An allegation that the bankruptcy order had been made fraudulently was unsupported by new evidence, had not been raised before the lower judge, and did not arise on an appeal concerning the Official Receiver’s decision.
4. Extended civil restraint order. The judge had correctly concentrated on the applicant’s post-bankruptcy applications, particularly those made after expiry of an earlier restraint order. Those applications had been certified as totally without merit. The persistent repetition of the same matter, combined with an apparent intention to continue unless restrained, made an extended civil restraint order the only proper course. At the least, the order involved an exercise of discretion with which the Court of Appeal had no basis to interfere.
5. Permission threshold. The proposed appeals had no real prospect of success and there was no other compelling reason to grant permission.

• Court of Appeal (Civil Division): Lord Justice David Richards refused renewed permission to appeal against both orders.
• High Court (Chancery Division): Mr Timothy Kerr QC dismissed the section 303 application on 6 November 2014 as an attempt to relitigate matters already decided and certified it as totally without merit. Morgan J made an extended civil restraint order on 9 February 2015.