Case Summaries
23 October 12
Official Receiver for Northern Ireland v O’Brien [2012] NICh 12; [2012] BPIR 826
(Northern Ireland Chancery Division, Deeny J, 19 April 2012)
Mr and Mrs O were the joint owners as tenants in common of a property. Mr O was made bankrupt in 1990. In 1992 and 1993 the Official Receiver wrote to Mrs O offering to sell his half interest but there was no response. On 15 February 2002, the Official Receiver issued an application seeking possession and sale in lieu of partition. A preliminary issue was ordered as to whether a delay of almost 12 years from adjudication of Mr O as bankrupt to the commencement of the proceedings was and of itself a defence to the applicant's claim. The court held that whilst it was open to a judge who found that a party had not acted within a reasonable time to set aside a limitation period by reason of the Human Rights Act 1998, that would be inappropriate in these circumstances as it would create uncertainty. So the answer to the preliminary issue was that a delay of 12 years from adjudication to commencement of proceedings was not of itself a complete defence.
23 October 12
Pace Europe Ltd and Others v Dunham and Another [2012] EWHC 852 (Ch); [2012] BPIR 836
(Chancery Division, His Honour Judge Purle QC (sitting as a judge of the High Court), 22 March 2012)
P obtained judgment in North Carolina against Mr and Mrs D for alleged breach of contract, fraud, breach of fiduciary duty and constructive fraud by the respondents, with damages assessed at US$2,112,771. Although a set-off was permitted in respect of a sum due to Mr D, a substantial balance in the award (US$1,794,260) remained due from Mr and Mrs D. This balance was trebled under procedures operating in North Carolina where unfair and deceptive trade practices had been established, such that the award exceeded US$5,382,780, plus costs. P served a statutory demand in this jurisdiction and appealed against the district judge's decision to set aside the demand on the basis that under s 5 of the Protection of Trading Interests Act 1980 an award of multiple damages could not be registered in the UK. HHJ Purle QC (sitting as a judge of the High Court) allowed the appeal. The judgment could be analysed to determine which element of the award was not enforceable, which depended upon whether the award was based upon separate causes of action. The element of multiple damages only related to one head of the judgment of the North Carolina court. Although the entire balance of the award had been tripled, there were distinctive elements of the award based upon separate causes of action that were purely compensatory (including the award of costs) and could be enforced despite the 1980 Act.
23 October 12
Ross v Commissioners for Her Majesty’s Revenue and Customs [2012] EWHC 1054 (Ch); [2012] BPIR 843
(Chancery Division, Norris J, 19 March 2012)
In July 2009, a bankruptcy order was made against R on an HMRC petition, despite the petition debt having been substantially reduced by payments and adjustments. R immediately applied for a stay of the bankruptcy, which was granted, pending his appeal. In July 2010, the Court of Appeal refused permission to appeal. The stay continued pending R's application to review or rescind the bankruptcy order under s 375 of the Insolvency Act 1986. On the first hearing, the application was adjourned to enable R to sell his properties, but he had not been able to do so. R hoped to enter into an IVA so that he could manage the sale or development of his properties in order to meet his liabilities. Norris J dismissed the application. The mere reduction in the petition debt after the bankruptcy order was not of itself an exceptional circumstance that could justify rescission. The proposals in relation to the properties were optimistic and without foundation. The creditors should be entitled to pursue the bankruptcy, having been kept out of their money whist it was stayed.
23 October 12
Rubin (Trustee of Dweck) v Dweck and Another [2012] BPIR 854
(Chancery Division, Registrar Jones, 18 April 2012)
In 1995 H gifted all his interest in the matrimonial home, registered in his sole name, to W, at a time when H was starting a business. A bankruptcy order was made against H in 2002. R, the trustee in bankruptcy, applied for an order under s 423 of the Insolvency Act 1986, asserting that the gift had been made in order to keep the property out of reach of future creditors. Registrar Jones dismissed the application. Applying Stack v Dowden [2007] UKHL 17; [2007] BPIR 913 principles, there was a common intention that the beneficial interest in the property would be shared equally between H and W. The true purpose of the gift was an attempt by H to reach a resolution of their matrimonial difficulties and to prevent W divorcing him. The purpose was not to put assets out of reach of creditors, and the evidence showed that there was no need to do so at that time. Finally, following Papanicola v Fagan [2008] EWHC 3348 (Ch); [2009] BPIR 320 the transfer was not a transaction at an undervalue.
23 October 12
Smeaton v Equifax plc [2012] EWHC 2322 (QB); [2012] BPIR 888
(Queen's Bench Division, His Honour Judge Thornton QC (sitting at a judge of the High Court), 11 May 2012)
S sought damages under the Data Protection Act 1998 for breach of the data protection principles and/or negligence at common law, on the basis that between 12 March 2001 and 17 July 2006, Equifax included in his credit file that he was subject to a bankruptcy order made by Aylesbury County Court on 1 March 2001 which was inaccurate in two respects: (1) in the period between 12 March 2001 and 22 May 2002, the bankruptcy order was subject to a stay pending appeal; and (2) between 22 May 2002 and 17 July 2006 it was inaccurate because the bankruptcy order had been rescinded on 22 May 2002. S alleged loss and damage derived from two applications he made for finance for his company which were refused. The judge directed the hearing of the following issues: (1) did Equifax breach any duty to S under the Data Protection Act 1998; (2) did Equifax owe S a duty of care at common law and if so what was its content; and (3) if there was a breach did it cause S to be unable to obtain funding on behalf of Ability in mid-2006 or subsequently. HHJ Thornton QC (sitting as a judge of the High Court) determined the issues in favour of S. Equifax, by deciding to operate as a credit reference agency and provide credit checks and references to its customers, had assumed a responsibility to consumers whose personal data it held to act with reasonable skill and care which common law duty was co-extensive with its statutory duty, and on the facts had failed to exercise reasonable skill and care, causing loss to S.