Birdi & Anor v Price & Anor

A claim should proceed to trial where the evidence gives it a realistic, rather than fanciful, prospect of success. The court must not conduct a mini-trial on a summary judgment application. Contradictory evidence may affect the value or strength of a claim without demonstrating an absence of reality. In bankruptcy proceedings, the statutory exception for tools and equipment necessary for a bankrupt’s employment, business or vocation may require factual determination. Unsupported assertions of ownership which carry no conviction may justify summary judgment. An extended civil restraint order may be made for persistent claims or applications which are totally without merit.

The claimants brought wide-ranging proceedings arising from the bankruptcy of the first claimant. Most claims had been abandoned or struck out. The remaining dispute concerned equipment sold during the bankruptcy. The first claimant maintained that the equipment fell within the statutory exemption for tools and equipment necessary for use in his employment, business or vocation. The second claimant asserted ownership of four items. The defendants sought strike-out or summary judgment and extended civil restraint orders.

The court also considered recusal. The central questions were whether either equipment claim had a realistic prospect of success and whether the threshold for an extended civil restraint order was met.

1. Recusal. The judge refused to recuse himself. The relevant test was whether a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias. Earlier findings that other claims were totally without merit did not satisfy that test.
2. First claimant’s equipment claim. Property generally vests in the trustee in bankruptcy, subject to section 283(2)(a) of the Insolvency Act 1986. The evidence raised serious questions about whether the equipment was necessary for the first claimant’s personal use in his employment, business or vocation. It did not, however, establish an absence of reality. The claim therefore had a realistic prospect of success and was permitted to proceed to trial. Permission was granted to substitute particulars confined to the equipment claims.
3. Second claimant’s equipment claim. Unsupported and inadequately explained assertions of ownership did not carry any conviction. Summary judgment was granted to the defendants.
4. Civil restraint orders. Paragraph 3.1 of Practice Direction 3C permits an extended civil restraint order where a party has persistently issued claims or made applications which are totally without merit. The threshold was satisfied in the second claimant’s case, and a two-year order was made. No order was made against the first claimant because legal representation had led to sensible concessions and a properly confined claim.