McKay v Titley

LADY JUSTICE ARDEN: This is an application for permission to appeal by Mrs Christine McKay. The learned associate has enquired whether Mrs McKay is outside the court or in the court, but she is not present today. Indeed she has written to the court. She is a senior citizen and she has a medical problem, about which I am sorry to read, and she has explained in her letter that she is unable to travel to the court. She invites the court to remove the matter from the list or to grant her permission to appeal.

I regret I do not think any purpose would be served by removing the matter from the list. Mrs McKay has already made full submissions in writing and accordingly I consider I should proceed to deal with the matter substantively. I should say that Mrs McKay has prepared a careful appellant's notice, which sets out precise grounds of appeal, and a skeleton argument, which I have found most helpful.

Now the grounds of appeal are in essence five. Before I go into them I will say a little bit about the background. The permission is sought to appeal from an order of His Honour Judge Norris QC, sitting in the Chancery Division, Birmingham District Registry. When he gave his judgment in this case on 24th February 2004 he was sitting in Birmingham. The judge had before him an application by Mrs McKay to remove her trustee in bankruptcy. The application had been filed on 31st October 2002. It filed was commenced in Derby but was transferred along with an application by the Official Receiver, with which I am not concerned, to the Birmingham District Registry.

Mrs McKay wrote to the Birmingham Court to say that she could not attend the court on 9th January 2003, which was the date first fixed for the first hearing of the case. The question then arose about listing for trial, and, despite efforts to list the application in Nottingham, which was more convenient for Mrs McKay, it had to be listed in Derby, and it was so listed for first August 2003. Mrs McKay actually lives in Kegworth in Derbyshire, but Nottingham is more convenient for her.

On 21st June 2003 Mrs McKay informed the court that she could not attend the hearing on 1st August. So the matter had to be adjourned. She applied for a new hearing date, with that hearing to take place in three to six months' time in Nottingham.

Ultimately, it proved impossible to fix the matter in Nottingham and the matter came before His Honour Judge Norris, as I have explained, in Birmingham, on 24th February 2004. It will be appreciated that this is some fourteen months after the application had been issued. I should explain that in that time the trustee in bankruptcy, whose removal she sought, had convened a meeting of creditors to approve his release as trustee in bankruptcy. As I understand it, this meeting was held on 12th February 2004 and the release was duly approved and took effect. I should add that Mrs McKay made an application in writing to the court to injunct that meeting, but the application was refused.

In his judgment the judge held that it was appropriate to proceed notwithstanding the absence of Mrs McKay, and therefore he rejected the application for an adjournment. He then considered the removal application and held that Mrs McKay had no status to seek Mr Titley's removal as she had no status to do so. Her grounds for seeking his removal were that there was no creditor in the bankruptcy and he was making a fraudulent attempt to extort her assets. The judge held that in essence her application to remove Mr Titley was one for the annulment of her bankruptcy. That was a matter which had already been heard by Hart J and rejected. He found that the allegations of fraud and extortion were not sustainable. In those circumstances the judge declined to grant an order to Mrs McKay that the trustee should disclose the source of the payment of his fees, which was declared to be a third party source. Mrs McKay had relied upon Insolvency Rule 7.38, to which I will refer in a moment.

Now the grounds of appeal, as I have explained, are five. The first one is that there should have been a further adjournment and the case should have been heard in Nottingham so that Mrs McKay could attend. Now the question of an adjournment was a question for the judge's discretion. It is clear that there had been attempts to arrange for this case to be heard in a more convenient location for Mrs McKay, but in the end this had not proved possible and her application had been outstanding for a very considerable time.

Convenience to Mrs McKay was only one of the factors which the judge had to consider. In order to show that the judge's decision was wrong on the question of adjournment it would have to be shown that he took into account some matter that he should not have taken into account or had failed to take into account a material matter which he ought to have taken into account or that his decision was plainly wrong. As I see it, the judge dealt with the matter most carefully in several paragraphs of his judgment and there is no real prospect of success on appeal in seeking to challenge his decision not to adjourn the case.

The second ground of appeal was that the application should not have been dismissed because the respondent, namely the trustee, had not attended.

As to this, Mrs McKay cannot succeed in obtaining an order requiring the exercise of a judicial discretion to remove a trustee simply because the trustee does not appear. The absence of a respondent is quite a different matter from absence of an applicant, since if an applicant does not attend it may be that the court has set aside time to deal with the application which is not required and this results in less time being available for other litigants, whose cases are thereby delayed. Accordingly this ground of appeal does not afford any prospect of success.

The third ground of appeal is that the judge should not have dismissed her disclosure application as she had status to bring the application under Insolvency Rule 6.132.

As I have explained, the judge ruled that Mrs McKay did not have standing to apply for the removal because there was no surplus in the bankruptcy and she was effectively seeking to rerun issues determined against her on the annulment application. She said that there was no petitioning creditor and that the trustee in bankruptcy was merely trying to take expenses from her estate.

But even if the judge was incorrect to say that she had no status to bring the application for removal, the fact of the matter was that by the time the matter came before the judge the trustee in bankruptcy had obtained his release on 12th February 2004. So if the judge was wrong in saying that she had no status to commence the proceedings, there was in any event no jurisdiction on 20th February 2004 to entertain her application for the reason that the trustee had ceased to be a trustee in bankruptcy anyway.

Once her application fell away then in my judgment the application for disclosure fell away. However Mrs McKay contends that she was independently entitled to details of the third party under Insolvency Rule 7.38. That rule, however, begins with these words:

Mrs McKay also states in her grounds of appeal that the judge failed to take account of her allegation about the solicitation of proxies by DTE, a debt recovery firm, and that he should have found that the trustee in bankruptcy and a petitioner creditor did not have status because of subrogation.

I need not go into these matters because, as I have explained, by 20th February there would have been no jurisdiction to remove the trustee, and accordingly if the judge was in error on these points it would have made no difference to the result.

In the circumstances I must reach the conclusion that there is no real prospect of success. Mrs McKay would have to show a real prospect of success on appeal in order for me to grant permission to appeal. In the circumstances I have no alternative but to dismiss the application, but I will direct that a copy of the transcript be sent at public expense to Mrs McKay.