Michael R Hammersley, Re

Permission to issue proceedings under a limited civil restraint order should be refused where the proposed claim is totally without merit and seeks to reopen issues already finally determined. A claimant cannot use a new representation, natural justice or personal-rights formulation to avoid earlier findings that he is not a creditor. A claim of the kind described in Pulsford v Devenish depends on the claimant having creditor status and does not assist where that status has already been rejected after extensive hearings. Ancillary relief, including pre-action disclosure or a proposed summary judgment claim, cannot proceed where the underlying claim has no realistic merit.

Michael R Hammersley applied for permission, pursuant to a limited civil restraint order, to issue proceedings against a former joint liquidator of Paragon Offshore PLC and Paragon Offshore Limited. The proposed proceedings concerned alleged representations made during the company’s restructuring and sought, among other things, pre-action disclosure and recognition of Mr Hammersley as a creditor.

He also filed a further application seeking summary judgment on the alleged creditor claim. The court had previously determined that Paragon Parent was insolvent and that Mr Hammersley was not a creditor. The central issue was whether either proposed claim had sufficient merit to justify permission despite those earlier determinations.

1. Permission refused. The court refused permission to issue both the proposed claim and the proposed summary judgment proceedings. Each was totally without merit and demonstrated why the limited civil restraint order should remain in place.
2. The proposed natural justice claim was, in substance, an attempt to go behind and relitigate earlier judgments and orders. Alleged briefings concerning the treatment of shareholders under an earlier restructuring plan could not unsettle the findings relating to the later Fifth Plan or the English administration order.
3. The administration order had been made on evidence satisfying the court that Paragon Parent was insolvent. That conclusion had not depended on the US bankruptcy judgments. The insolvency findings had also been considered and confirmed in subsequent proceedings.
4. Mr Hammersley’s proposed reliance on Pulsford v Devenish [1903] 2 Ch 625 was misplaced. That case concerned a creditor whose personal rights had been disregarded by a liquidator. Mr Hammersley had repeatedly been held not to be a creditor. The proposed claim therefore lacked the necessary foundation.
5. The proposed claim based on alleged non-discharge of his securities fraud claim was equally without merit. Earlier determinations that the claim had been dealt with and discharged had not been successfully appealed or reviewed. There was consequently no need to consider the proposed claim under the Third Parties (Rights against Insurers) Act 2010, and no basis for pre-action disclosure.