Case No. CH/2012/APP/0443.
Neutral Citation Number: [2013] EWHC 789 (Ch) 
IN THE HIGH COURT OF JUSTICE 
CHANCERY DIVISION 
Rolls Building,
110 Fetter Lane,
London EC4A 1NL.

Date: Wednesday, 27th February 2013.

Before:
MRS JUSTICE ASPLIN

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Between:

	MUSELIN OMOTAYO KASUMU	Appellant	
	-v-		
	ARROW GLOBAL (GUERNSEY) LTD	Respondents	

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The Appellant appeared in person, with a Mackenzie Friend Mr Emele.
MISS JENNIFER MEECH (instructed by solicitors) appeared on behalf of the Respondents.
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JUDGMENT

MRS JUSTICE ASPLIN:  
01 	This is an appeal against the decision of District Judge Major in the Croydon County Court on 10th July 2012. Permission to appeal was granted by Mr Justice Morgan on 9th December 2012. At the hearing on 10th July, the Appellant was in person; the Respondent Arrow Global (Guernsey) Ltd was represented by a solicitor. A transcript of the hearing makes clear that the hearing of the bankruptcy petition was opposed by the Appellant. It appears that the District Judge read the Appellant’s objections which included substantive issues in relation to the debt, its assignment and matters arising out of the Consumer Credit Act 1974 as well as the fact that the same court had dismissed the first petition on 22nd January 2010.  The District Judge made express reference to the dismissal of the earlier petition and referred to the fact that the Appellant contended that the further petition was an abuse of process and should not be reinstated but dismissed.  The solicitor attending, a Mr Bibi, pursuant to Insolvency Rule 7.55 asked the court to forgive the failure to seek permission in advance of the issue of the second petition to grant permission to re-serve the second petition and give directions as to the service of evidence for a relisted hearing on the bankruptcy petition. The District Judge stated that she would not accede to back door requests for permission and that an application should be made on notice. The Appellant confirmed that he had been served with a second petition but not a witness statement. In response to that, the transcript records as follows: 
‘District Judge Major: No witness statement? Mr Kasumu: No. The one… District Judge Major: The petition creditor shall file and serve second petition on the creditor by 21 days. The debtor shall file a Defence/Objections by 21 days.  24th  August for you to file your objections. Permission to petitioning creditor to file a statement in reply if so advised by 14th  September. Bankruptcy hearing and permissive application at first available date after 17th  September. So there will not be a separated hearing in relation to the permission but I am going to say that they need to be put in writing on the same occasion rather than creating two hearings.’
  02 	The Appellant having become agitated, the transcript records that the District Judge went on in the following way: 
‘District Judge Major: I have indicated, Mr Kasumu, I am not dealing with costs today in relation to that. Those are the matters that you must put in your witness statement and I will see you in September when the matter comes back for a bankruptcy hearing. The point that I was making is this, simply because the petition was dismissed previously and you rely very heavily in your application on the case of Henderson which is a case that says all matters concerning a case should be brought together and once a court has decided on something you cannot come back and have another go at it – Mr Kasumu: Yes. District Judge Major: However, in relation to bankruptcy proceedings, if the petition was simply dismissed because the Claimant did not attend then that may well be that the court has not decided upon it and they are entitled to bring a further application. So it is a matter that you might want to take some advice upon. It is not automatic that they cannot issue a second petition.’
03 	For the sake of clarity I should state that the District Judge’s order was as follows: (1) that the petitioning creditor apply on notice for permission to issue a second petition, the first having been dismissed due to their non-attendance; (2) the petitioning creditor file and serve the second petition upon the debtor within 21 days; (3) the debtor shall file a Defence/Objections by 24th August 2012; (4) permission to the petitioning creditor to file a statement in reply if so advised by 14th September 2012; (5) the matter to be listed for hearing on 18th September 2012 at 11:30; (6) costs in the petition. Accordingly it is clear that the District Judge was aware that the first petition for the same debt had been presented and dismissed, and that she had been informed that this was as a result of the failure of the Respondent to attend albeit that there might be some dispute in that regard. It is also clear that the District Judge was aware of Insolvency Rule 6.26 which provides that in such circumstances a subsequent petition against the same debtor whether alone or jointly with any other person shall not be presented by the same creditor in respect of the same debt without permission of the court to which the previous petition was presented. It appears she was also aware that a second petition had already been presented and served. In fact it had been presented on 10th May 2012, served on 5th June that year and was before the court on 10th  July. I should also mention that the application for retrospective permission pursuant to the District Judge’s order was issued on 27th  July 2012. 
04 	I was also informed by Miss Meech, counsel for the Respondent, that there have been further hearings in the Croydon County Court on 18th September and 6th November 2012 on which occasions the hearing was adjourned and on 19th  February 2013 when the hearing was adjourned with directions and costs in the petition. It was not clear from the way in which those orders were described whether they covered only the hearing for the bankruptcy petition or also the application for permission. Mr Justice Morgan gave permission to appeal because, he said: 
‘Whilst I understand the District Judge’s desire to have a roll-up hearing which would consider first the question of permission under Rule 6.26 and then, if permission were given, the bankruptcy petition itself, the Appellant has a real prospect of successfully arguing on the appeal that a second petition cannot be presented until the petitioner has been granted permission under Rule 6.26 whereas the order of 10th  July 2012 allowed the petitioner to present a second petition even before the court had decided to grant permission under Rule 6.26.’ 
In fact, as I have already mentioned, it is clear that the second petition had already been presented. In my judgment, in light of the extract from the transcript to which I have referred, it is relatively clear that the order requiring service of the second petition was not authorising presentation of a further what would be a third petition or authorising presentation without permission. It seems to me that it came about in an attempt to create  clarity. 
05 	In any event the Appellant puts it succinctly in his Notice of Appeal in the following way: 
‘The Petitioner filed a second petition without seeking or obtaining the permission of the court at a time when the first bankruptcy petition in 2010 in relation to the same debt was dismissed in the same County Court.  The Petitioner did not seek to reinstate or appeal against the dismissal of the first petition but has sought to re-litigate the matter by filing the second petition No 0591 of 2012.’
The second ground is that the District Judge by not ordering the petitioning creditor to re-serve the Statutory Demand gave the petitioning creditor a second bite of the cherry, which goes against Article 6, equality of arms and just case management and is contrary to the Insolvency Rules and the Act. In the circumstances therefore the Appellant says that the second petition is an abuse of process and Insolvency Rule 6.26 itself and accordingly that the District Judge erred in law when she granted permission to present the second petition. As I understand it from Mr Emele, who with my permission made submissions on behalf of the Appellant, this is a reference to the second paragraph of the order by which the District Judge required the Respondent to file and serve the second petition upon the debtor within 21 days.  
06 	The Appellant made more detailed submissions in the following form. First, the failure to require the petitioning creditor to re-serve the Statutory Demand denied him the protection afforded by the Consumer Credit Act 1974 to which the debt related. As a result, he says, he was deprived of the opportunity to seek to set aside the Statutory Demand or the option to compound the debt, and in particular to rely on Section 129 of that Act. In his statement of 8th October 2012 he made reference to Brown v Stott [2001] 2 WLR 817 and Re Awan [2000] BBIR 241 in this regard although he did not produce copies of them or rely upon them directly before the court. In any event, it is said that the latter makes clear that provisions as to service must be followed exactly and that the former provides that failure to serve a Statutory Demand denies the debtor access to justice and would be unable to defend the bankruptcy petition. Before turning on, I should say that in fact there is a Certificate of Substituted Service of Statutory Demand dated 28th February 2012. The certificate refers to attempts to serve the Statutory Demand on 21st March and then on 29th March 2012, delivery of the Demand to an individual at the Appellant’s address for service, the individual having given her assurance to give it to the Appellant at the first available opportunity. In addition at para. 9 of the Form 6.19 Notice of Intention to Oppose Bankruptcy Petition which was before the court on 10th July 2012, the Appellant refers to having received the petition on 30th March 2012 and comments that ‘The 18 days will/should start to run from this date.’ As the second petition was not presented until 10th May 2012 and the 18-day period is relevant to Statutory Demand it seems likely to me that the reference is to the Statutory Demand to which the Certificate of Substituted Service refers. Failure to serve a Statutory Demand was also not amongst the grounds for opposing the bankruptcy order set out in the Form 6.19 to which I have referred. If he had not been served, it seems to me more likely than not that such a complaint would have been included.  It seems also to me that this deals with that aspect of the matter. 
07 	Secondly, the Appellant says that the effect of the decision was to allow the petition to operate as a debt-collecting scheme, denying the Appellant the opportunity to show that the liability for the debt lay with MBNA, the insurer of the debt payment protection insurance. Thirdly, the effect of the decision was to deny the Appellant the opportunity to claim compensation and indemnification in respect of the debt of £9,500 odd against MBNA which was the subject of the second petition and was covered, he says, by the insurance policy in relation to credit card payments under which he says MBNA was liable. Furthermore, it is contended that the decision denies the Appellant the opportunity to request disclosure and interrogatories as to the fact that the exhibits to the witness statements of Mr Paul Bowden on behalf of the creditor bore the same reference numbers and as a result might not be genuine.  
08 	As I have already mentioned, it would seem clear from the order of 10th July 2012 that the District Judge did not give permission in respect of the second petition but required an application for permission to be filed. Equally, she did not immediately dismiss the second petition but ordered that it be re-served. It would appear that she gave directions for the hearing of the petition itself having required that an application for permission under Insolvency Rule 6.26 be made and heard at the same time. The Respondent submits therefore in summary, that permission under the Insolvency Rule 6.26 can be granted retrospectively and accordingly that there was nothing wrong in the District Judge’s order. She preserved the position as it was and adjourned the hearing of the bankruptcy petition until the question of permission could be dealt with fully, evidence having been filed and advice taken.  
09 	Miss Meech also said that the relevant issues are therefore six-fold and in the following form: (1) Can permission under IR 6.26 be granted retrospectively? (2) Is the object of the Rule to make sure that there was nothing improper in the dismissal of the first petition subverted by such a retrospective application for permission? (3) Is the procedure adopted permitted under IR 6.26 read in the light of Insolvency Rule 7.55? 
(4) If the court were unable to grant retrospective permission would significant prejudice be caused to the Petitioner and other creditors? (5) Can retrospective permission be granted under IR 6.26 in light of the fact that there are other situations in insolvency proceedings where the legislation sets out that permission must be obtained prior to the taking of the relevant steps, but nevertheless in these circumstances can permission be granted retrospectively? (6) Lastly, is the second petition an abuse of process? 
10 	As I have said, Insolvency Rule 6.26 is in the following form: 
‘If the petitioning creditor fails to appear on the hearing of the petition no subsequent petition against the same debtor either alone or jointly with any other person shall be presented by the same creditor in respect of the same debt without the permission of the court to which the previous petition was presented.’ 
In effect the Appellant through Mr Emele has submitted that the District Judge should have dismissed the second petition on 10th  July. He appeared to accept that contrary to the Notice of Appeal she had not actually given permission there and then but adjourned both the hearing of the bankruptcy petition and the application for permission to come on together at a later date. He said that she was too generous in doing so and her only option was to have dismissed the second petition at that stage. He said that was because first in fact the order made in 2010 was on the merits, it having been recorded in the order that the evidence had been read and was not for want of appearance by the creditor and therefore IR 6.26 was not engaged. That was something which does not appear from the Notice of Appeal. Secondly, in any event the further petition was an abuse of process. Thirdly, alternatively, by failing to dismiss the second petition the District Judge had brought into play Insolvency Rule 7.55 and could only remedy the defect of an absence of permission for the petition if no injustice would be caused and the order of the court could remedy any injustice. This, he says, was not the case given the alleged irregularities in documents, the opportunity to bring a third party insurer in, who was allegedly liable for the debt, and the inability to seek to set aside the Statutory Demand or rely on the Consumer Credit Act provisions.  
11 	Miss Meech on behalf of the Respondent put forward a number of different constructions for the order of 10th July 2012. She says it might mean that the second petition was a nullity and that the District Judge by para. 2 ordered a new, second – or to put it another way, a third – petition to be presented and served. In my judgment this analysis is not borne out by the transcript and I reject it.  In any event, if the dismissal of the first petition fell within Rule 6.26 the question would be whether the permission can be granted retrospectively under that Rule. Secondly, she suggested that the District Judge treated the second petition as a nullity and that the second paragraph of the order is intended to refer to an intended new petition. This is neither borne out by the transcript or a proper reading of the order as a whole and I reject that also. 
12 	The third construction is that the District Judge did not treat the second petition as a nullity but considered that the issue of permission would have to be considered, proper notice having been given and evidence served, and that the Appellant having had the opportunity to take advice and then if permission was granted the petition itself would be heard. This is how Mr Justice Morgan understood it when he gave permission to appeal. That construction is consistent with the transcript and as already will be apparent in my judgment is correct. 
13 	In her oral submissions Miss Meech pointed out that it is possible that Rule 6.26 does not apply because the petitioning creditor is different in the 2010 petition from the 2012 petition. That certainly appears to be the case on the face of the petitions. I was provided with no further documentation or detail about this and I do not decide that matter at this stage. Miss Meech also submits that in any event permission under Rule 6.26 can be granted retrospectively and that Omgate Ltd v Gordon [2001] BPIR 909 is authority for that proposition. It was a decision of Anthony Mann QC (as he then was) and was the hearing of an appeal from a decision of Mr Registrar Jacques in relation to an application under Rule 6.26. That was a retrospective application. The learned Registrar had given retrospective permission to present a fifth petition in relation to the same debt. In fact on the appeal, counsel for the Appellant accepted that permission could be granted retrospectively and that aspect of the matter was not fully argued. Miss Meech also referred me to the Notes to Rule 6.26 in Muir Hunter on Personal Insolvency at para. 7.316 which referred to an unreported decision of a Registrar on 28th  March 2007 in which it was decided that permission could be granted retrospectively under that Rule. Miss Meech was not able to produce a record of that decision and in any event it would not have been binding upon me. In Omgate Anthony Mann QC decided that the decision of Mr Registrar Jacques was entirely justified. At para. 10C of his judgment he decided that the principal object of Rule 6.26 was to make sure that there was nothing in the non-attendance on the prior petition which made it improper or unfair to present a further petition. Miss Meech submits that such an exercise can be conducted just as well in respect of the petition on the file as it can prior to presentation and that the District Judge’s order did not preclude the consideration of the relevant issues at the single hearing of the application for retrospective permission and the petition itself. She also said that all of the issues raised on behalf of the Appellant, including any injustice caused to him, can be dealt with on the hearing of the application for permission and with the petition itself, if there is one. She said that even the issue of whether the 2010 order was substantive can be dealt with on that occasion. She commented however that there is no evidence whatever to suggest that the 2010 was substantive.
14 	She also referred me to Insolvency Rule 7.55 which is to the effect that no insolvency proceedings shall be invalidated by any formal defect or by any irregularity unless the court before which objection is made considers that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by any order of the court. Miss Meech submits that the presentation of a further petition without first obtaining permission is such a defect or irregularity to be considered under Rule 7.55. Accordingly, she says that the court should consider whether a substantial injustice has been caused by the failure first to seek permission and whether that injustice can be remedied by the grant of retrospective permission. She points out that there is no evidence of injustice here and that the complaints, for example, about the inability to avail himself of the ability to compound referred to by the Appellant could be dealt with at that hearing.  
15 	Miss Meech also submitted that if the petitioning creditor were required to seek the dismissal of the second petition, seek permission and if granted present a further petition, there would be a significant period during which Section 284 Insolvency Act 1986 would not have effect. As a result she says there would be a significant period during which the debtor would be able to dispose of his assets to the detriment of creditors as a whole. She also drew my attention to Re Collier International (UK) plc [2012] BPIR 1099, a decision of Mr Justice David Richards. In that case the Applicant applied retrospectively for permission to institute legal proceedings against a company in administration. The application was made under para. 43(6) of Schedule B1 of the Insolvency Act 1986 which contains the moratorium on the enforcement of security and on various types of legal process against a company in administration or its property except with the consent of the administrator or the permission of the court. Mr Justice David Richards noted that there were similar provisions in relation to winding-up at Section 132(2) and personal bankruptcy at Section 285(3) Insolvency Act 1986. He also noted that the issue of whether there is jurisdiction to grant retrospective permission for the commencement of legal proceedings had been considered in the context of insolvency proceedings in a number of cases which he considered in some detail and also in other situations. He decided at para. 35 of his judgment that retrospective permission could be granted for the commencement of proceedings whether under Section 130(2) or Section 285(3) of the 1986 Act or under para. 43(6) of Schedule B1 of that Act and that the proceedings without prior permission were not a nullity. He also considered similar wording in different contexts and a number of authorities in some of which it had been held that the underlying proceedings and the absence of the necessary step were a nullity and in others the reverse conclusion had been reached. In particular he referred to Seal v Chief Constable of South Wales Police [2007] UKHL 31, a decision of the House of Lords in relation to Section 139 Mental Health Act 1983 under which permission to commence proceedings is required, in which the decision was that those proceedings without permission were a nullity. He went on to hold at para. 30 of his judgment: 
‘The decision of the House of Lords in Seal and the Court of Appeal in Adorian require the court in cases such as the present to look beyond the language of the Section to the entire context of the provision, its purposes and the consequences of a decision as to its effect with a general predisposition that the lack of prior permission should not render the proceedings a nullity.’
16 	Lastly, Miss Meech submitted that the second petition in this case was not an abuse of process. She submitted that it is difficult to characterise the second petition as a collateral attack on an earlier decision or that the order of 13th April 2010 by which the first petition was dismissed for failing to attend was a reasoned decision which the Respondents were seeking to avoid or a full hearing in which the Respondents should have put forward all its points and did not do so. She said therefore that Henderson v Henderson does not apply. As I have already mentioned, she says that the mere reference to having read the evidence contained in the order is insufficient for this purpose.  
17 	She also drew attention to the fact that the Appellant debtor in the Omgate case argued that the fifth and most recent petition in that case was an abuse of process, the previous petition having been analogous to proceedings struck out for want of prosecution. This was rejected by Anthony Mann QC at para. 13 of his judgment on the basis that failure to attend at a hearing was not analogous on the facts of that case to very serious delay in relation to one or more steps in the action. Miss Meech submits that in this case only one hearing was missed and therefore was a reason for failure to attend which the court below should be able to consider on its merits at the full hearing of the application under Rule 6.26.  
18 	I remind myself that this is an appeal from the decision of the District Judge and as such is not a re-hearing. In order to succeed, it must be shown that the District Judge erred in law. Although the form of the order of the District Judge made on 10th July 2012 is curious, as I have already found, rather than granting permission there and then the District Judge intended there be an application on notice and a hearing of the issue of whether permission should be granted for the second petition. The issue of that application on 27th July 2012 is consistent with that. The remainder of the 10th July order, given that the second petition had already been presented and served, and that the District Judge was aware of that presentation and  service, can only have been a belt and braces approach in relation to service. Therefore in my judgment the question of permission has yet to be dealt with. The real question is whether permission for purposes of Rule 6.26 can be granted retrospectively or whether there is an abuse of process which cannot be dealt with at the permission hearing.
19 	With regard to retrospectivity I prefer the submissions of Miss Meech. First, it seems to me that there is nothing to which I have been referred which requires a second petition presented without permission having first been granted to be treated as a nullity. Although the wording of Rule 6.26 is strict, it does not expressly state that a second petition without permission is void. Furthermore, such a conclusion is consistent with the decision of Mr Justice David Richards in Collier International (UK) plc albeit that he was dealing with different but analogous circumstances. Nevertheless his analysis of the case is of assistance. In addition, if one applied the instruction at para. 30 of his judgment to which I have referred it seems to me that if one looks at the entire context, provision, its purpose, described in Omgate, and the consequences of a decision with a predisposition that the lack of prior permission should not render the proceedings a nullity. It seems to me that Rule 6.26 should not be read in a way which would have required the District Judge inevitably to dismiss the second petition as a nullity.  
20 	As I have already mentioned, Mr Justice David Richards found that permission could be granted retrospectively to institute proceedings against a company in administration. In my judgment there is nothing in the nature of the circumstances surrounding Rule 6.26 which renders it necessary to reach a different conclusion in a case of a further petition where the first petition is dismissed for non-attendance. As Miss Meech pointed out, in Omgate Anthony Mann QC (as he then was) decided that the principal object of Rule 6.26 was to make sure that there was nothing in the non-attendance on the prior petition which makes it improper or unfair to present a further petition. Such an exercise can be conducted just as well in respect of a petition on the file as it can prior to presentation. Such a conclusion is supported by Rule 7.55. I accept Miss Meech’s submission that presentation of a further petition without first obtaining permission is a defect or irregularity falling within that Rule. Accordingly it is necessary for the court to consider whether a substantial injustice has been caused by the failure first to seek permission and whether that injustice can be remedied by the grant of retrospective permission. All the matters as to injustice including those specific matters referred to on behalf of the Appellant can be dealt with under this head at the hearing for permission and in my judgment do not render it necessary to dismiss the further petition in any event before such hearing.
21 	However, I put little emphasis upon Miss Meech’s submission that if the petitioning creditor were required to seek the dismissal of the second petition, seek permission and if granted present a further petition it would be prejudiced because there would be a further significant period during which the debtor would be able to dispose of his assets to the detriment of creditors. If this were what Rule 6.26 required, the detriment would be the petitioning creditor’s own fault and would arise as a result of a failure to comply with the Rules. Accordingly, it is difficult to see how such a result takes the matter much further forwards. 
22 	Lastly, I come to whether the second petition issued without permission is an abuse of process as the principles set out in Henderson v Henderson and whether the failure to require the service of a further Statutory Demand has caused injustice to the debtor. In my judgment it is difficult to see that the mere recital that the evidence was read is sufficient to elevate the 2010 order into a hearing on the merits. However, this is something which could be explored at a permission hearing if necessary and in relation to which I did not hear detailed submissions. If the first petition was dismissed purely for a failure to attend by the creditor, which at least appears to be the case from the witness statement of Mr Bowden, it is not possible to characterise it as a reasoned decision, which the Respondent seeks to avoid, or a full hearing at which the Respondent ought to have put forward all its points and failed to do so. In those circumstances therefore I cannot see that the presentation of a further petition without first obtaining permission is an abuse of process in the Henderson v Henderson sense in such circumstances. However, as I have already said, this matter may be explored further at a permission hearing. 
23 	As I have already mentioned, Miss Meech also drew attention to the fact that the Appellant debtor in the Omgate case argued that the fifth and most recent petition in that case was an abuse of process, the previous petition having been analogous to proceedings struck out for want of prosecution. This was rejected by Anthony Mann QC at para. 13 of his judgment on the basis that failure to attend the hearing was not analogous on the facts of that case to a very serious delay in relation to one or more steps in the action. In this regard I accept Miss Meech’s submission that in this case only one hearing was missed albeit that it was in 2010.  There was a reason for failure to attend which the court below should be able to consider on its merits at the full hearing of the application under Rule 6.26.
24 	I have already dealt with the issue of whether the Statutory Demand was served. In any event it seems to me that in this regard the Appellant is in no different position than the position that obtained before the second petition was issued. In both circumstances there will be a hearing at which he can raise the issues of which he complains and as a result may be successful in having the second petition dismissed. The Appellant has not complained of any detriment in having the petition on foot in the meantime.  
25 	For the above reasons, and given that the District Judge did not give permission retrospectively in relation to the second petition but ordered that the matter be adjourned and heard and also did not order a petition, which would have been the third, be presented and served in the meantime, I dismiss the appeal.