Albert Court (Westminster) Management Company v Victoria Fetaimia

Permission to appeal should be refused where the proposed appeal has no real, rather than fanciful, prospect of success. In assessing a proposed cross-claim, the court must examine its actual substantiation, including evidence of cause of action, loss and causation. General assertions in submissions cannot cure evidential deficiencies. A bankruptcy petition is not an abuse of process merely because it may affect a debtor’s ability to pursue related foreign proceedings. The court may accept a proper recovery objective where the debtor may have assets and the petitioning creditor seeks to recover debts. A stay of bankruptcy requires proper notice, candour and consideration of potential prejudice to creditors, particularly after earlier stay applications have failed.

The claimant petitioned for the defendant’s bankruptcy in respect of unpaid costs orders. The defendant sought permission to appeal decisions of District Judge Wilkinson concerning an alleged cross-claim arising from proceedings in the British Virgin Islands and an alleged abuse of process. She also sought, or suggested, a stay of the bankruptcy pending a BVI appeal and possible representation there. The court considered whether the proposed grounds had a real prospect of success and whether a stay was justified in light of previous refusals, the absence of notice to relevant insolvency office-holders and possible prejudice to creditors.

1. Stay. Any stay application required greater detail and candour, especially given four previous refusals and the very short notice. No notice had been given to the official referee or trustee in bankruptcy, and the defendant had not seriously addressed the potential harm to creditors. The stay was refused without awaiting the written BVI order.
2. Alleged cross-claim. The District Judge had undertaken an evaluative exercise and was entitled to conclude that the alleged dishonest-assistance claim was not genuine or substantial. The claim was inadequately particularised, the allegation that the claimant assisted Mr Hitt was unsupported, and the assertion of dishonesty was based on alleged collusion. The defendant had also failed to provide rational evidence of loss or causation. Even assuming an arguable cause of action, there was no realistic prospect of a useful award sufficient to justify disregarding the undisputed petition debt. The proposed ground therefore had no real prospect of success.
3. Abuse of process. The proposed appeal was out of time and probably outside the original appellant’s notice. In any event, it had no reasonable prospect of success. The claimant could rationally have pursued bankruptcy to recover substantial sums and separately pursued matters in the BVI. The defendant’s assets meant that it was not proper to infer that the sole purpose was to deprive her of representation in the BVI. The court also accepted that, if meritorious, the BVI appeal could potentially be pursued by the trustee in bankruptcy.
4. Permission to appeal was refused. The defendant was ordered to pay the respondent’s costs of the hearing.

The judgment records earlier decisions of District Judge Wilkinson dated 18 July 2023 and 15 August 2023, and subsequent refusals of stay applications by Zacaroli J and Michael Green J. The present hearing concerned the defendant’s application for permission to appeal those decisions. Permission was refused.