Kevin-Gerald Stanford v Klotho Brands Limited & Ors

Where an undischarged bankrupt brings a claim concerning rights of property vested in the trustee, the claim is not transformed into a personal claim merely because it is framed as a challenge to an injunction or to exposure to committal. Under the Insolvency Act 1986, rights of action form part of the bankrupt’s estate, subject to narrow exceptions. Knowingly litigating a claim to which the bankrupt has no title is an abuse of process. Actual knowledge may be inferred and may include deliberate ignorance. The claim was therefore struck out. It was also certified as totally without merit, and a three-year extended civil restraint order was made. An ECRO requires at least three totally without merit claims or applications, persistent conduct, and a necessary and proportionate response to the objective litigation risk.

These applications concerned a 2025 claim by Mr Stanford seeking to set aside the order made in the earlier 2021 claim, which had determined Klotho’s ownership of shares in All Saints Retail Limited. The claim alleged fraud on the court, misuse of Civil Procedure Rules 1998 Part 8 and procedural irregularity. Klotho and Mr Lea applied to strike out the claim or obtain summary judgment and sought an extended civil restraint order in both proceedings. Proskauer made a parallel application, but Mr Stanford discontinued the claim against it at the hearing.

The judgment records that the 2021 claim was decided for Klotho by Deputy Judge Ambrose on 5 April 2022, without an appeal, and that later contempt proceedings produced judgments reported at [2025] EWHC 1966 (Ch) and [2025] EWHC 2367 (Ch). The central issues were whether the 2025 claim vested in the Official Receiver, whether it was abusive or barred by finality principles, and whether the persistence threshold for an ECRO was met.

Disposition. The 2025 Claim was struck out as an abuse of the court’s process and was declared totally without merit. The ECRO Application was granted for three years in both proceedings. It was unnecessary to determine the alternative summary-judgment grounds.

1. Standing and vesting. Under the Insolvency Act 1986, the bankrupt’s estate vested automatically in the Official Receiver on the bankruptcy order. Property included things in action and rights of action possessed at bankruptcy. Applying Heath v Tang [1993] 1 W.L.R. 1421, the court held that exceptions for causes personal to the bankrupt were narrow. The substance of the claim remained a challenge to proprietary rights in the shares and to the order determining those rights. Framing it as a claim about injunction scope or personal exposure to imprisonment did not make it personal.
2. Abuse through lack of title. Following Pathania v Adedeji [2014] EWCA Civ 681, knowingly pursuing a claim to which the claimant had no title was abusive. Actual knowledge was required, but it could include deliberate ignorance and could be inferred from the evidence. The claim documents showed that Mr Stanford understood the effect of bankruptcy and the vesting of rights in his trustees. The court therefore inferred actual knowledge and struck out the claim.
3. Alternative grounds. Had it been necessary, the court would also have held that the unappealed direction that the 2021 Claim proceed under Part 8 could not be relitigated. The fraud allegations had already been raised and rejected at trial, with no additional evidence. A fresh claim was therefore barred by issue estoppel and/or constituted a collateral and vexatious attack on final decisions.
4. Extended civil restraint order. Totally without merit meant bound to fail. The ECRO threshold required at least three such claims or applications and both quantitative and qualitative persistence, assessed by reference to the litigant’s conduct as a whole. At least four applications had been determined totally without merit, and the repeated attempts to relitigate the same subject matter demonstrated persistence. Having assessed the objective threat level, the need to protect parties and court resources, and proportionality, the court considered the maximum three-year order necessary.

First-instance decision on the Applications. The judgment records that the 2021 Claim was determined by Deputy Judge Ambrose on 5 April 2022, that no appeal was brought, and that subsequent contempt proceedings were decided in the High Court, including [2025] EWHC 1966 (Ch) and [2025] EWHC 2367 (Ch) .