O'Hara v Markham

An application for an account may be struck out as an abuse of process where it repeatedly reopens matters previously raised or determined, is unsupported by credible evidence, and forms part of conduct intended to harass the judgment creditor. In any event, equitable liability to account requires a fiduciary relationship and receipt of property in circumstances importing an equitable obligation. A relationship of bailment, with common law remedies, is insufficient. A judgment sum based on agreed figures is not retrospectively adjusted merely because the figures later prove inaccurate. A judicial sale conducted through proper enforcement procedures is strong evidence of the property’s value.

The claimant had obtained judgment in earlier proceedings concerning loans and the beneficial ownership of a property. The judgment was delivered in Karsten v Markham, [2009] EWHC 3658 (Ch), when the claimant used her married name. The defendant was ordered to pay a substantial sum and the property was declared held on trust for the claimant.

The defendant applied for an account, seeking to establish credits against the judgment debt for chattels, rents, mortgage and bankruptcy figures, the proceeds of a French property sale, and an alleged costs order. The claimant resisted the application on its merits and sought its strike-out as an abuse of process. The issues were whether the application was abusive and, alternatively, whether any legal or evidential basis existed for ordering an account.

1. Disposition. The application was struck out as an abuse of process. It would alternatively have been dismissed on its merits.
2. Abuse of process. The defendant had repeatedly sought to rely on the same chattels and alleged credits, despite having taken an inconsistent position at the original trial and having raised substantially the same contention in later proceedings. His allegations and threats against the claimant, combined with his refusal to provide an address, assertion that he had no assets or income, and failure to offer security for costs, supported the conclusion that the application formed part of a course of conduct intended to harass her. He therefore came to court seeking equitable relief with exceptionally unclean hands.
3. Other alleged credits. The claimant was beneficially entitled to rents received after the trust arose. The mortgage redemption figure and trustee in bankruptcy fees had been agreed figures used to quantify the judgment. The parties had accepted the risk that the actual figures might differ, so no retrospective adjustment was justified. The French property had been sold through proper enforcement procedures, and there was no evidence that a higher price could have been obtained. No credit could be allowed for an unproved costs order.
4. Account and fiduciary relationship. An equitable account requires liability to account, ordinarily arising from receipt of property in an accountable capacity and a fiduciary relationship. No such relationship existed. The relationship, if any, was one of bailment, for which common law remedies were available. There was also no sufficiently clear evidence that the claimant controlled chattels of the value alleged. The enforcement sale had transferred the purchased items to the claimant, and photographs and schedules did not establish any further accountable property.

The judgment describes earlier proceedings in the same dispute:

• Chancery Division: HHJ Raynor QC determined the underlying ownership and loan claim in Karsten v Markham, [2009] EWHC 3658 (Ch).
• High Court: Later applications concerning variation, suspension and alleged satisfaction of the judgment debt were dismissed or struck out. The present application was struck out as an abuse of process and would alternatively have failed on its merits.