Grant v Hayes

I have before me an application by Mr Timothy Hayes in proceedings which have been brought against him by Mr Stephen Grant, who is his Trustee in Bankruptcy, he having been made bankrupt in 2005 on the petition of his ex-wife Mrs Carol Hayes and having been discharged from that bankruptcy sometime in the Spring of 2006. I am told there is a dispute as to whether the date of discharge is as Mr Hayes contends 23^rd March or as Mrs Hayes and Mr Grant apparently contend 1^st April 2006 but that dispute does not need to be gone into for the purposes of this application. This is the second of my judgments in a series of connected actions and applications, the first of which I gave on 12^th June 2014, in that case in relation to an appeal by Mrs Hayes against the dismissal of a further bankruptcy petition which she had sought against Mr Hayes. In that judgment (‘Judgment No 1’) I set out some of the background to the unfortunate disputes which have bedevilled the relations between Mr and Mrs Hayes and various other people for a very long time and I do not intend to repeat the whole background now.

The present application arises out of proceedings taken in the Cambridge County Court by Mr Hayes against a Mr Willoughby under the provisions of the Protection from Harassment Act 1997. Those proceedings were commenced with reference 9CB01831 in I believe 2009 and in the original Particulars of Claim which do not appear to be dated Mr Hayes said:

Those proceedings have been amended. The Amended Particulars of Claim which are before me and again do not appear to be dated again start with a claim for an injunction. By this stage Mr Hayes had been joined by his current wife Mrs Margaret Hayes as Claimant, and in para. 1 of the Amended Particulars of Claim both Claimants sought an injunction restraining the Defendant from harassing them as well as damages for harassment and aggravated damages and in the case of the First Claimant Mr Hayes Special Damages. The Amended Particulars of Claim continue to allege at para. 10 that since March 2003 the Defendant has maintained an unrelenting campaign against the First Claimant and at para. 19:

That pleading contained a Schedule, a Chronology of Events, which starts with a period of 2002-2003 alleging that the Defendant together with various other people was involved in perpetrating a fraud against a company and then consisting of a number of acts from 2003 onwards. Some of those at least take place after April 2006 when as I have said on any footing Mr Hayes had been discharged from his 2005 bankruptcy and some of them take place after June 2007. The significance of that date will become apparent in due course.

Those proceedings came on for trial before His Honour Judge Maloney QC sitting in the Cambridge County Court and he delivered a lengthy and considered judgment in para.1 of which he referred to the claim as being ‘somewhat unusual in that it arises not primarily out of physical harassment or direct confrontation but out of what is on any view a lengthy and persistent campaign of correspondence and investigation waged by the Defendant W [that is Mr Willoughby] and to some extent his associates against the Claimant H [Mr Hayes] over the whole of the period from 2002 to 2009.’

He then dealt with two defences. One was a defence under s. 1(3)(a) of the Act, which is that the purpose of his course of conduct was the prevention or detection of crime, and he held that that defence was made out, and then at para. 44 he dealt with the separate defence of reasonableness under s. 1(3)(c) of the Act and there he held that the reasonableness ceased from the time when he was notified by the OR [The Official Receiver] on 14^th June 2007 that certain evidence had been examined and it did not support his case, concluding:

Mr Hayes appealed to the Court of Appeal. The appeal was allowed. Lord Justice Moses, who gave the judgment of the Court of Appeal [2011] EWCA Civ 1541 held that the defence under s. 1(3)(a) was not available unless the sole purpose of the course of conduct was preventing or detecting crime. That appears at para. 16 of the judgment and then at para. 24 he said:

There was a further appeal by Mr Willoughby to the Supreme Court. The Supreme Court handed down judgment on 20^th March 2013 [2013] UKSC 17. The majority of the Supreme Court agreed with Lord Sumption, who held that the Court of Appeal’s test as to whether the purpose of preventing and detecting crime was the only purpose was not the correct test. He said that although it was strictly unnecessary to decide, he preferred a test as to whether the purpose of the alleged harasser of preventing or detecting crime was one which could be said to be rational. He said at para. 14:

In those circumstances he dismissed the appeal. I should also record that at para. 8 he had set out that:

The proceedings then went back to the Cambridge County Court and came again before His Honour Judge Maloney, who made an order on 7^th May 2013 which ordered that the Claimant’s claim for compensation should be confined to harm suffered after 14^th June 2007 as a result of acts done by or on behalf of the Defendant after that time. That is, as I understand it, where the Cambridge proceedings currently are and I am told they have been stayed pending the outcome of these proceedings to which I now turn.

These proceedings were brought, as I have said, by Mr Grant, the Trustee in Bankruptcy under the 2005 bankruptcy of Mr Hayes, against Mr Hayes. The essential purpose of these proceedings is to obtain relief which has the effect of nullifying the orders which have been obtained by Mr Hayes against Mr Willoughby on the basis that he never had the causes of action vested in him which he pursued against Mr Willoughby and instead they were vested in his Trustee in Bankruptcy, originally the Official Receiver and now Mr Grant. It is not necessary for me to refer to all the allegations in the Particulars of Claim but I should read the relief that is sought.After seeking the sanction of the court to bring these proceedings under Section 314 Insolvency Act they seek:

Mr Hayes now brings this application and by this application he seeks relief under three heads. The first was for permission to amend his Defence. That was not opposed and I have already said that I have granted such permission effectively by consent. The second order that he seeks is an order under r. 3.4.2A of the CPR striking out the claim on the grounds that the Statement of Claim discloses no reasonable grounds or alternatively an order under CPR 24 for summary judgment – what is often called reverse summary judgment – on the grounds that the claim has no real prospect of success. That is the matter which has been argued before me. The third was an application, in the event that the court did not strike out the claim, for an order under CPR 25.12 that the Claimant provide security for costs. The claim under r. 25.12 was initially put on the basis that Mr Grant in his Trustee in Bankruptcy came within r. 25.13.(2)(c) which reads: ‘The Claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it would be unable to pay the Defendant’s costs if ordered to do so’ but before me Mr Sims did not pursue that, in my judgment very sensibly because I would have taken a great deal of persuading that Mr Grant who is a living individual is either a company or an ‘other body.’ Mr Sims told me that he was not suggesting that Mr Grant in acting as Trustee in Bankruptcy was a nominal Claimant; instead he suggested that it might be possible if I did not accede to his application under Order 24 to make a conditional order requiring security, but I did not require Mr Wolman to answer that. It appears from a note in the White Book at p. 742 under Note 24.6.6 that there has been a case called Olatawura v Abiloye [2002] EWCA Civ 998, in which Lord Justice Simon Brown gave guidance as to the court’s approach to the making of conditional orders requiring a party advancing an improbable case to give security for their opponent’s costs, and included in the guidance is that security should not be ordered merely because the Respondent’s claim or defence appears to be weak; some other factors must be present, for example, a history of repeated breach of timetables or court orders or something in the conduct of the Respondent which gives rise to a suspicion that his claim or defence may not be bona fide. Mr Sims was unable to point to any other factors which were present apart from, he said, a lack of evidence of Mr Grant’s ability to meet costs but the answer to that is that there was no warning in the Application Notice that he would be applying for a conditional order, the claim being at that stage put solely under r. 25.12 and Mr Wolman, no doubt advising Mr Grant, taking the view that there was a complete answer to that. I will say no more about that part of the application and I return to the main part of the application which is that the claim has no real prospect of success.

The foundation of the claim is that the claim which Mr Willoughby faced in the Cambridge proceedings brought by Mr Hayes was, as I have said, that there was a course of conduct which dated back to 2002; that that constituted a cause of action; that that cause of action predated the bankruptcy and predated the discharge from bankruptcy, which as I have said is April 2006; it therefore vested in the Trustee in Bankruptcy; therefore Mr Hayes did not have any standing to bring the claim before the Cambridge County Court; those proceedings were therefore a nullity and all orders and judgments in those proceedings should be struck out on the basis that he never had the standing to bring them, it being the intention of Mr Grant, as I understand it, that if he was able to obtain that relief in this action he has agreed with Mr Willoughby that Mr Willoughby would not plead any limitation point against him and the claim can then be pursued by Mr Grant for the benefit of the bankrupt estate against Mr Willoughby, or alternatively it is Mr Grant’s intention to sell the claim to, among other people, Mr Willoughby.

The law is that all property of a bankrupt vests in the Trustee; that property includes things in action; and choses in action which consist of rights to recover property prima facie vest in the Trustee. There is a well-known exception for purely personal claims which do not vest in the Trustee and in a case called Ord v Upton in the Court of Appeal [2000] Ch 352 Lord Justice Aldous held that a hybrid claim, i.e. a claim which is partly personal and partly not, also vests in the Trustee. It is said – and this has not been argued before me and I am not going to decide it because it is something which may come before me in another guise – that a claim for harassment under the Protection from Harassment Act is one which partakes of that nature and therefore vests in the Trustee. Mr Sims before me has accepted that that is at least arguable and for present purposes he does not seek to persuade me to the contrary. However, Mr Sims takes the point that the claim which Mr Hayes has succeeded in establishing against Mr Willoughby is one that is confined to the period after June 2007. That was long after Mr Hayes’ discharge from bankruptcy. He says that that is a cause of action by itself; that that cause of action was not one which vested in the Trustee and that therefore there is nothing which makes the claim that Mr Hayes has succeeded in establishing against Mr Willoughby a nullity. That raises what is potentially quite a difficult question as to the nature of the cause of action which the Act gives. I should refer to the Act. Section 1(1) headed ‘Prohibition of harassment’ provides:

In so far as the injunction is concerned Mr Wolman, who appears for Mr Grant, accepts that that is a separate cause of action and that that is one which remained with Mr Hayes and did not vest in the Trustee. That seems to me to be entirely right. It is plain from the wording of section 3(1) that the distinction is drawn between actual breach and an apprehended breach - see also the reference to a person who is or may be the victim of the course of conduct in question - and that in the case of an injunction in the normal way what needs to be pleaded and proved is that the Claimant reasonably fears – has a well-founded fear, as Mr Wolman put it – of a breach of section 1(1), i.e. a future course of conduct. It follows from that that the suggestion that the proceedings in Cambridge as a whole were a nullity must in my judgment fail. It having been accepted that one at least of the causes of action, namely, the claim for an injunction, which Mr Hayes relied on against Mr Willoughby, was vested in him, there is no basis for concluding that the action as a whole fails and on that footing the order for an injunction made by the Court of Appeal will stand. I do not see any answer to Mr Sims’ contention that that part at least of the proceedings is untainted by any consequences flowing from Mr Hayes’ bankruptcy. Mr Sims points out that the relief sought in these proceedings is a Declaration that the action in the Cambridge County Court as a whole was a nullity and says that there has been no alternative pleading that it is only the claim for damages which is a nullity, but if that were the only point I would readily adjourn this application in order to give Mr Wolman an opportunity to consider whether to perhaps re-plead the relief sought in this action to confine it to the claim for damages.

Mr Sims’ more significant point is that the cause of action for harassment is one which continues over a period of time and that Mr Hayes is entitled to rely on those acts which take place after 2006 as constituting a separate cause of action from any claim which is based on acts which took place before 2006 and which may or may not be vested in the Trustee. That gives rise to the question whether the course of conduct which is prohibited by the Act and hence made tortious and for which damages could be claimed is one which can be analysed as giving rise to a fresh cause of action as Mr Sims put it each time there is an act of harassment. I regard that as quite a difficult question. As is quite often the case Parliament has decided to pass legislation to meet a perceived and in this case no doubt actual social wrong without considering with great care how it fits into orthodox legal analysis. What is apparent from the structure of the Act is that one needs at least two acts – conduct on at least two occasions, as it is put in section 7(3)(a) – before there can be a course of conduct. It also seems to me to be clear that the mere fact that there is conduct on at least two occasions does not by itself constitute a course of conduct and it is a matter for the court hearing the action or prosecution as the case may be to determine whether if there is conduct on more than one occasion it constitutes a course of conduct which constitutes harassment under section 1(1). So one can have a situation in which there is a course of conduct consisting of a number of acts and then there is another further act and the question whether that gives rise to a separate cause of action. This is one of some difficulty. Nevertheless it is well established in other areas of the law that some torts are one-off torts – if I step on to your land and then step off again I have committed a trespass and that takes place on one occasion – but some torts are continuing torts – if I build a buttress on your land and leave it there that is a continuing tort. The traditional analysis is that such a trespass accrues from day to day. Clerk and Lindsell at para. 31-19 puts it this way:

I take the view that the course of conduct which is referred to in Section 1(1) is of its very nature a continuing wrong. That is the nature of a course of conduct. It seems to me to follow from that that so long as the course of conduct is persisted in it is capable of constituting a fresh cause of action so long as it gives rise to fresh harm. A course of conduct which does not give rise to any fresh harm does not I think give rise to any further claim for damages and I rather doubt whether it constitutes a complete cause of action. However, it is not in my judgment necessary finally to resolve these points. The position in this case is not one where the acts which have been found in the Cambridge proceedings to constitute a wrongful course of conduct stretch over the period both before and after the discharge from bankruptcy. On the contrary, the effect of the Cambridge proceedings to which I have referred is that Mr Hayes has established against Mr Willoughby only that he is liable for the tort of harassment in relation to acts and indeed damage suffered after 14^th June 2007. Whatever might have been the position had there been a course of conduct which had been established which straddled before and after the bankruptcy it seems to me that Mr Sims is inevitably right that what Mr Hayes has established against Mr Willoughby is a wrongful course of conduct starting on 14^th June 2007 and persisting to some date thereafter. That has been held as a result of a trip to the Supreme Court and back to constitute wrongful harassment. It necessarily meant that those courts involved in the Cambridge proceedings must have regarded that as a course of conduct which amounted to harassment for which there was no defence under section 1(3) and that indeed is the decision of the Supreme Court and given effect to by His Honour Judge Maloney’s order. It follows in my judgment that the claim which Mr Hayes has established against Mr Willoughby is not one which vested in the Trustee. The effect of the decisions in the Cambridge proceedings is that Mr Hayes indeed did not have any claim against Mr Willoughby for any period before June 2007 and therefore did not have any claim in 2005 when he became bankrupt and he did not have any claim in 2006 when he was discharged from the bankruptcy.

Mr Wolman makes a number of points in answer to this simple and stark point of Mr Sims’. First he says that he, Mr Grant, is not bound by the findings in the Willoughby proceedings, the Cambridge proceedings. I agree. Mr Grant is not a party to that action and he is not privy to that action, and nothing decided in that action affects him at all. It remains open, or would but for the limitation period having expired remain open, to Mr Grant to start proceedings against Mr Willoughby and seek to establish in those proceedings that in fact His Honour Judge Maloney had reached an erroneous conclusion on the facts and that the campaign of harassment which dated back to 2002 had not been justified up until 2007 at all. I say nothing about the other difficulties in him establishing that but in legal theory if he were able to prove that that were the case the mere fact that Mr Hayes had failed to prove that in proceedings to which Mr Grant was not a party would not prevent Mr Grant from pursuing such a claim. As I say, such a claim would now appear to be statute-barred in any event. That does not affect the principle of the matter.

Nevertheless it does not seem to me that it follows that it affects Mr Sims’ point that the only claim which Mr Hayes has established against Mr Willoughby is one which did not vest in the Trustee. Mr Grant is in effect seeking to assert that Mr Hayes did not have a claim against Mr Willoughby. Mr Hayes, who has taken that claim all the way to trial, to the Court of Appeal and Supreme Court and back again, has managed to establish that he does have such a claim limited to a period after 2007 and as I have said whatever would be the case in relation to other facts, on these facts it seems to me to be an inevitable conclusion that that cause of action on which he has obtained judgment is not one which vested in the Trustee because that cause of action did not exist in 2005 or 2006.

Mr Wolman says that Mr Hayes originally pleaded, as I have referred to, that the course of conduct related back to 2002 or 2003 and indeed that that was the way in which it was presented to His Honour Judge Maloney, who found as I have said in his judgment that the campaign had persisted since that date, and that was the way in which it was presented throughout. No doubt, he says, Mr Hayes could have confined his claim to a course of conduct starting after 2006 but he chose not to do so. That is what makes the claim which he did choose to bring one which vests in the Trustee. That I think suffers from the fallacy of assuming that because one pleads a single course of conduct from 2002 and continuing to 2009 and beyond that necessarily represents a single cause of action. In the same way if I sue for a continuing trespass on my land which has lasted from 2002 to 2009 I may well assert that that is a single trespass but in law, as we have seen, that accrues from day to day and constitutes a fresh cause of action on each day. Even though Mr Hayes pleaded a cause of action dating back to 2002 and a course of conduct which started on that date, what he has managed to establish is a course of conduct starting in 2007 and nothing else. I agree with Mr Sims that it follows from the judgment in the Supreme Court that it must have been found that the wrongful acts which took place after 2007 constituted a cause of action that started in 2007 at the earliest.

I have also not understood Mr Grant’s concern as expressed in the pleading that the merger of Mr Hayes’ cause of action in the judgment has in some way prevented him from bringing a claim. That seems to me simply wrong. Mr Wolman referred me to statements as to merger in a judgment in Clerk and Lindsell at 31-14 which says that:

“When an action is brought before an English tribunal of competent jurisdiction and proceeds to final judgment, the original right of action is destroyed: “the original cause of action is terminated by its merger in the judgment.” So, whether the claimant has succeeded or failed he cannot bring the same action against the same party. The judgment is binding and conclusive upon the parties to the action and their privies unless the second action is brought in respect of a different right.”

That it seems to me has the effect that Mr Hayes’ cause of action against Mr Willoughby has been merged in the judgment and he could not sue Mr Willoughby again. It does not affect Mr Grant in so far as there is a cause of action vested in him (or was); Mr Grant is not a party to the Cambridge proceedings and he is not a privy to the Cambridge proceedings and he is not affected by anything that has taken place in them. So I do not find that the merger which has undoubtedly taken place of Mr Hayes’ cause of action in the judgment is one which prejudicially affects Mr Grant in any way.

Mr Wolman also submitted to me that Mr Hayes’ Cambridge proceedings were a complete nullity and to prove that he referred me to Lazard Brothers v Midland Bank, a decision of the House of Lords [1933] AC 289 and referred me in the judgment of Lord Wright to the following passage at 296:

Mr Wolman also referred me to Pickthall v Hill Dickinson LLP which does establish that if a bankrupt commences an action when the cause of action is not vested in him because it is vested in his Trustee and he knows that to be the case, that can be an abuse of process and such an abuse of process may render his proceedings liable to be struck out by the defendant, although it does seem to me that that decision by itself, which I should say is [2009] EWCA Civ 543, establishes that such an action is not a nullity because the Court of Appeal decides and discusses the question whether it is appropriate to grant an application to amend the proceedings which could not be done if the proceedings were a complete nullity. That may mean that at a stage at which Mr Hayes was still relying on a course of conduct between 2002 and his discharge in 2006 Mr Willoughby could have struck out that part of the claim as being an abuse of process on the basis (if the Ord v Upton point is well-founded) that that part of his cause of action was not vested in him but vested in Mr Grant. Such an application might well have succeeded. Such an application might have prompted Mr Hayes to confine his claim for damages to any period after 2006. But all that it seems to me is water under the bridge. Mr Willoughby took no such point in the proceedings; he chose to defend the proceedings on the basis that he had a defence to the allegation of harassment under section 1(3). He was successful in that at first instance but as a result of the cumulative appeals his success was confined to the period post-2007. At that point any question of whether he could or could not have struck out a claim by Mr Hayes for acts which took place between 2002 and 2006 became wholly irrelevant; Mr Willoughby was not liable to Mr Hayes for that period in any event. As I say, he remained amenable to an action by Mr Grant for that period, Mr Grant not being bound by any of the findings in the Cambridge proceedings but such an action is, as I say, no doubt now statute-barred.

Be that as it may, it seems to me clearly to follow from the Pickthall case that for a bankrupt to start proceedings where the cause of action is not vested in him at most makes the proceedings an abuse and not a nullity and makes the proceedings liable to be struck out, but in this case whatever might have been the position in relation to pre-2006 acts had Mr Willoughby taken the point no such point was taken, and as the Cambridge proceedings now stand, confined as they are to a course of conduct which starts on 14^th June 2007, there is no basis for accepting that the remaining claims that Mr Hayes has against Mr Willoughby are vested in the Trustee or that it is an abuse of process for him to pursue them. It seems to me in the circumstances that Mr Sims’ application is well-founded; that these proceedings stand no reasonable prospect of success; and that it is appropriate to grant summary judgment against the Claimant because it does not seem to me that there is anything in the claim as formulated which can reach or affect the only parts of the Cambridge proceedings which are still alive, i.e. the injunction, which is accepted belonged to Mr Hayes and the claim for damages in relation to acts taking place after 14^th June 2007 which for the reasons I have sought to express did not in my judgment vest in Mr Grant. I will therefore dismiss this action as requested.