168 of 2007 
Case No: M8X00102

Neutral citation number: [2008] EWHC 2903 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION 
MANCHESTER DISTRICT REGISTRY

Civil Justice Centre
Bridge Street
Manchester
M60 9DJ

Tuesday, 4th November, 2008

BEFORE:

HIS HONOUR JUDGE DAVID HODGE QC
sitting as a Judge of the High Court

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BETWEEN:

MAURICE HERBERT BAILEY
Applicant/Respondent 

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STUART RUSSELL DARGUE
Defendant/Appellant

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Audrey Jones Transcription, 
49 Hill Rise, Romiley, Stockport, Cheshire, SK6 3AP
Tel: 0161 430 4705 Fax:  0161 217 9626  
ajtranscription@ntlworld.com  DX 23701 Marple 
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MR GRAEME WOOD appeared on behalf of the applicant/respondent.
MR SIMON GOLDBERG appeared on behalf of the defendant/appellant.
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Judgment
Tuesday, 4th November, 2008

Approved Judgment

JUDGE HODGE QC: 

1.	This is my first extemporary judgment in the matter of Stuart Russell Dargue, appeal number M8X00102.  

2.	This is an appeal by the debtor from an order made by Deputy District Judge Crisp sitting in the Carlisle County Court on 17th July 2008.  On that day, upon hearing the petition of Maurice Herbert Bailey, which had been presented on 8th November 2007, the Deputy District Judge ordered that the debtor, Stuart Russell Dargue, be adjudged bankrupt.  Mr Dargue now appeals from that order, and a preliminary point has been taken as to my jurisdiction to hear this appeal.  It is an appeal in an insolvency matter, for which permission is required; and by an order dated 1st October 2007, His Honour Judge Pelling, QC, sitting as a Judge of the High Court in Manchester, gave permission to appeal, and directed that the appeal should be listed for hearing, either before myself or himself, on Tuesday, 4th November.  It is that appeal which now comes on for hearing before me.

3.	Yesterday afternoon the listing office received an email from the clerk to Counsel engaged for the appellant in the case, Mr Simon Goldberg.  The clerk’s email stated that she had spoken to Counsel regarding the matter and that Counsel had advised as follows:

“The case is an appeal from a Deputy District Judge in a County Court.  Paragraph 8.13 of the Practice Direction to CPR Part 52 provides that, save for appeals from decisions of Recorders, an appeal from a County Court may only be heard by ‘….a High Court Judge or by a person authorised under paragraphs (1), (2) or (4) of the Table in section 9 (1) of the Supreme Court Act 1981 to act as a judge of the High Court.’  The persons authorised under paragraphs 1, 2 and 4 of the table in section 9 (1) of the Supreme Court Act 1981 are:  ‘1.  A judge of the Court of Appeal;  2.  A person who has been a judge of the Court of Appeal; and 4.  A person who has been a puisne judge of the High Court.’  

It is the view of both Counsel that a Circuit Judge, even one with section 9(1) authority to sit in the High Court, is not authorised to hear this appeal.  If there is not a High Court Judge available to hear this matter tomorrow it is Counsel’s view that the matter should be vacated.”

The email went on to ask for the listing officer’s urgent attention and response in the matter.

4.	The matter was referred to myself, and I also referred the matter on to the Vice-Chancellor, David Richards J.  In the event, no response was received from the Vice-Chancellor until this morning, and therefore yesterday evening I indicated that the listing office should indicate to Counsel that the appeal would proceed before me today.

5.	I have this morning received a response from the Vice-Chancellor and his views coincide with the views that I myself had formed independently of his helpful consideration of the matter.

6.	The position is that I was appointed a Specialist Chancery Circuit Judge, sitting on the Northern Circuit, on 7th November 2005.  With effect from that day, I was authorised by the then Lord Chancellor, Lord Falconer of Thoroton, to sit as a Judge of both the Chancery and the Queen’s Bench Divisions of the High Court.  That authority was conferred upon me by virtue of section 9(1) of the Supreme Court Act 1981.  As a Circuit Judge, I fall within paragraph 5 of the table within section 9(1).  

7.	The position of Specialist Chancery Circuit Judges is considered at paragraph 12.4 of the Chancery Guide at page 44 of the 2008 edition of volume 2 of Civil Procedure:  

“There are also Specialist Circuit Judges who have the authority to exercise the powers of a judge of the Chancery Division (under section 9 of the Supreme Court Act 1981, therefore known as section 9 judges) and who normally sit out of London.  They exercise a general Chancery jurisdiction, subject to exceptions.  Those exceptions are proceedings directly concerning revenue, and proceedings before the Patents Court constituted as part of the Chancery Division under section 96 of the Patents Act 1977.”

8.	I, and the other Specialist Chancery Circuit Judges, have regularly heard appeals from District Judges in insolvency matters as part of the exercise of our specialist Chancery jurisdiction.  We have always done so sitting as judges of the High Court under section 9(1) of the 1981 Act; and no challenge has ever, so far as I am aware, previously been taken to our jurisdiction.  Indeed, there have been appeals from our decisions in such capacity to the Court of Appeal where no point has ever been taken as to our jurisdiction.

9.	So far as I am aware, this is the first occasion on which the issue of our jurisdiction has been raised and therefore it seemed to me that it would be helpful to deliver a considered judgment on the point, albeit on an extemporary basis.

10.	When the matter was opened before me this morning, Mr Simon Goldberg, who appears as Counsel for the appellant debtor, indicated that, on further consideration, Counsel had come to the conclusion that paragraph 8.13 might not be the relevant provision.  That is because special provision is made for insolvency appeals by the Insolvency Rules, and by the Insolvency Practice Direction, which is to be found at section 3E of volume 2 of Civil Procedure.  

11.	It is perhaps useful to begin a consideration of the issue with Rule 2.1 of the Civil Procedure Rules.  Rule 2.1(1) provides that: 

“Subject to paragraph (2), the Civil Procedure Rules apply to all proceedings in -

(a) 	county courts;  

(b) 	the High Court; and 

(c) 	the Civil Division of the Court of Appeal.”  

However, Rule 2.1(2) provides that: 

“These Rules do not apply to proceedings of the kinds specified in the first column of the following table (proceedings for which rules may be made under the enactments specified in the second column) except to the extent that they are applied to those proceedings by another enactment.”  

Paragraph 1 of the table refers to insolvency proceedings and makes reference to the rule-conferring power contained in sections 411 and 412 of the Insolvency Act 1986.  

12.	One then proceeds to CPR 52 which is the provision of the Civil Procedure Rules relating to appeals.  CPR 52.1(4) provides that Part 52 of the CPR is -

“subject to any rule, enactment or practice direction which sets out special provisions with regard to any particular category of appeal.”

That then takes one to the Practice Direction relating to Insolvency Proceedings.  

13.	Part 4 deals with Appeals in Insolvency Proceedings.  By paragraph 17.2(1): 

“An appeal from a decision of a County Court (whether made by a District Judge or a Circuit Judge) or of a Registrar of the High Court in insolvency proceedings (‘a first appeal’) lies to a judge of the High Court pursuant to section 375(2) of the Act” 

- that is to say the Insolvency Act 1986 - 

“and Insolvency Rules 7.47(2) and 7.48(2) (as amended by section 55 of the Access to Justice Act 1999).”

14.	Section 375(2) of the Insolvency Act 1986 provides that: 

“An appeal from a decision made in the exercise of jurisdiction for the purposes of those Parts by a county court or by a registrar in bankruptcy of the High Court lies to a single judge of the High Court; and an appeal from a decision of that judge on such an appeal lies to the Court of Appeal.”  

15.	So far as appeals in personal insolvency or bankruptcy proceedings are concerned, the relevant provision of the Insolvency Rules 1986 is Rule 7.48(2).  That provides that: 

“In the case of an order made a county court or by a registrar of the High Court, the appeal lies to a single judge of the High Court; and an appeal from a decision of that judge on such an appeal lies, with the leave of that judge or the Court of Appeal, to the Court of Appeal.”

16.	Paragraph 17.2(2) of the Insolvency Proceedings Practice Direction provides that: 

“The procedure and practice for a first appeal are governed by Insolvency Rule 7.49 which imports the procedure and practice of the Court of Appeal.  The procedure and practice of the Court of Appeal is governed by CPR Part 52 and its Practice Direction which are subject to the provisions of the Act, the Insolvency Rules and this Practice Direction:  see CPR Part 52, rule 1(4)”  

I have already reproduced that.

17.	Moving on, paragraph 17.7 provides that: 

“Except as provided in this Part,” 

- ie Part 4 of the Insolvency Proceedings Practice Direction - 

“CPR Part 52 and its Practice Direction and forms do not apply to first appeals, but paragraphs 17.8 to 17.23 inclusive of this Part apply only to first appeals.”  

Paragraph 17.23 provides that: 

“Only the following paragraphs of the Practice Direction to CPR Part 52, with any necessary modifications, shall apply to first appeals”; 

and then the paragraphs that are identified are 5.10 to 5.20 inclusive.  

18.	It follows, in my judgment, therefore, that the paragraph of the Practice Direction supplementing Part 52 of the Civil Procedure Rules, that is to say paragraph 8.13 (1), to which reference was made in Counsel’s clerk’s email to the Court yesterday, has no application to any insolvency appeal such as the present.  In other words, the appeal in an insolvency matter lies to a Judge of the High Court unrestricted by the limitation in paragraph 8.13 to persons authorised to act as Judges of the High Court under paragraphs 1, 2 or 4 or the table in section 9 (1) of the Supreme Court Act 1981.  

19.	Since I am authorised to sit as a Judge of the Chancery Division of the High Court, albeit by virtue of an authorisation pursuant to paragraph 5 of the table in section 9 (1) of the 1981 Act, it seems to me that I have jurisdiction to hear any insolvency appeal. That, it seems to me, follows from the terms of section 9 (5) of the 1981 Act, which provides that, subject to certain stated exceptions not material hereto, 

“Every person while acting under [section 9] shall…..be treated for all purposes as, and accordingly may perform any of the functions of, a judge of the court in which he is acting.” 

I am therefore satisfied that I have jurisdiction to hear this insolvency appeal from a decision of a Deputy District Judge sitting in the County Court.

20.	I should add that it would be surprising if that were not the case.  Under paragraph 8.14 of the Practice Direction to Part 52, I would have jurisdiction to hear an appeal from a Master or District Judge sitting in the High Court.  That is because paragraph 8.14 provides that: 

“In the case of appeals from Masters or district judges of the High Court, appeals, applications for permission and any other applications in the appeal may be heard and directions in the appeal may be given by a High Court Judge or by any person authorised under section 9 of the Supreme Court Act 1981 to act as a judge of the High Court.”

21.	In other words, anyone authorised under section 9 of the 1981 Act may hear an appeal from a Master or district judge of the High Court.  It would be strange if such a person were not authorised to hear an appeal from a District Judge sitting in the County Court, which is a court inferior to the High Court.  

22.	The reason why there is a restriction upon the power of certain section 9 judges to hear appeals from the County Court is probably this: that it is envisaged that virtually all appeals from the County Court to the High Court would in fact be appeals from Circuit Judges.  It is probably only in the case of insolvency appeals that appeals from District Judges lie, not to a Circuit Judge, but to a Judge of the High Court.   However, on the view that I have taken, and for the reasons that I have given, those special appeals are subject to no restriction of the sort contained within sub-paragraph 1 of paragraph 8.13 of the Appeals Practice Direction.  Insolvency appeals are subject to a wholly different regime.  I can understand why appeals from Circuit Judges should be entertained only by full time High Court Judges, or those authorised to sit as High Court Judges who fall within the particular class of Court of Appeal, former Court of Appeal or former High Court Judges; but there is no similar justification for restricting the identity of those judges sitting in the High Court who may fall to hear appeals from District Judges in the County Court.  

23.	Be that analysis as it may, I am satisfied that paragraph 8.13 (1), and the restrictions it contains, has no application to insolvency appeals, such as the present.  I therefore rule that I have jurisdiction in the matter.

24.	I should also perhaps observe that if there were any force in the point, then, subject to any question of de facto authority, a question might arise as to the status of Judge Pelling’s order giving permission to appeal.  I would also observe that Judge Pelling’s order of 1st October, giving permission to appeal, which was drawn on 9th October and presumably sent out on that day, or shortly thereafter, made it clear that the appeal was to be listed before one of the two Specialist Chancery Circuit Judges.  Accordingly, any challenge to our jurisdiction to hear this appeal should, perhaps, have been raised in advance of yesterday because, had there been anything in the jurisdictional point, it would have been necessary, as a result of the point being taken so late, to have vacated this appeal on the day before it was due to be heard.  However, for the reasons I have given, I am satisfied that there is no substance in the jurisdictional point.