Harrison v Ancketell

• Jurisdiction: Ireland
• Judge: M. R.
• Judgment Date: 25 November 1904
• Court: Chancery Division (Ireland)
• Docket Number: (1902. No. 372.)
• Date: 25 November 1904

Harrison

and

Ancketell.

M. R.

(1902. No. 372.)

CASES

DETERMINED BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1905.

Arranging debtor — Right to sue — Official assignees — Right to property — Vesting of estate — Locus standi — Bankruptcy — Staying proceedings.

An action to set aside a mortgage transaction affecting property in which the plaintiff claimed an interest was brought by an arranging debtor, and a statement of claim was delivered. By resolution, accepting the proposal in the arrangement matter, it was provided that the plaintiff should pay twenty shillings in the pound on all his unsecured debts and engagements. The payment was to be secured by vesting the plaintiff's estate in the official assignees as trustees, with power, in default of lodgment, to realize the estate. After payment of costs and creditors' claims out of the proceeds, the surplus was to be paid to the plaintiff. Default was made in carrying out the arrangement. An order for realization was made, and a vesting certificate issued and registered. The official assignees were not parties to the action, which was commenced after the default and vesting order. After delivery of defence and reply an application was made by one of the defendants to stay the proceedings. The fact of the plaintiff being an arranging debtor was not stated in the pleadings:—

Held, that the plaintiff had no locus standi to carry on the action, and that the proceedings therein should be stayed.

The following authorities were cited:—Collins v. Shirky (1); Heath v. Chadwick (2); Kaye v. Fosbrooke (3); Major v. Auckland (4); Rochfort v. Battersby (5); Dyson v. Hornby (6); Molion v. Moojen (7); Metropolitan Bank v. Pooley (8); Warder v. Saunders (9); Tildesley v. Harper (10); Lloyd v. Hatham Station Brick Company (11); Cowell v. Taylor (12); Doran v. Moore (13); Re Somerville (14); Re Guilfoyle (15); Ex parte Doyle (16); Rhodes v. Dawson (17); Cropper v. Smith (18); Australian Steam Navigation Company v. Smith (19); Wearing v. Ellis (20); and counsel referred to Bankruptcy Act, 1857, sections 267, 268, 304, 349; Bankruptcy Act, 1872, sect. 65; Baldwin on Bankruptcy (1904 ed), pp. 345–347; Judicature Act, sect. 27, sub-sect. 5: Order XXV., Rr. 2, 3, 4.

O'Connor, K.C. (with him Wilson, K.C., and Arthur C. Meredith), for the defendants Guedalla and Baker, applied for an order staying the proceedings in the action, and asking alternatively that these defendants might be at liberty to amend their defence by pleading that all the estate and interest of the plaintiff in the matters in question became and are now vested in the official assignees in bankruptcy, and that the plaintiff be ordered to give security for costs.

The circumstances of the case are fully explained in the judgment.

Matheson, K.C., Molony, K.C., and T. S. M'Cann, for the plaintiff.

D. M. Wilson, for C. R. Cordner, one of the trustees of the Harrison estate.

R. D. Megaw, for Annie Young, executrix of another of the trustees of the Harrison estate.

D. M. Wilson, for C. R. Cordner, one of the trustees of the Harrison estate.

R. D. Megaw, for Annie Young, executrix of another of the trustees of the Harrison estate.

The Master of the Rolls:—

The action was commenced by writ of summons of the 19th April, 1902, the statement of claim being launched in the following July. Mr. Henry Harrison is the sole plaintiff, and there are a number of defendants, two of them being Mr. Florence Montefiori Guedalla and Mr. John W. Baker. The statement of claim is a very long and elaborate document, which covers over forty pages of print, and impeaches a mortgage transaction affecting property in which the plaintiff claims an interest; but I need not go

into it further, because apart from the question of the status of the plaintiff, and his right to sue, it discloses a cause of action, which he is entitled to have litigated. The defence of Mr. Guedalla and Mr. Baker was delivered on the 19 th November, 1902. The plaintiff delivered his reply on 24th November. 1903.

This application is brought forward at a late stage of the case. The notice of motion of the 25th October, 1904, asks “(1) That the proceedings herein be stayed on the ground that the plaintiff has no locus standi, all his estate and interest (including the alleged cause of action herein) having become and being now vested in the official assignees in bankruptcy. (2) Alternatively, (a) that the said defendants be at liberty to amend their defence, delivered herein on the 19th day of November, 1902, by adding thereto, as a further defence to this action, the defence that all the estate and interest of the plaintiff in the matters in question herein (including his alleged cause of action) before action became and are now vested in the official assignees in bankruptcy; (b) that the plaintiff be ordered to give security for costs.”

The plaintiff filed a petition for arrangement in bankruptcy on 7th December, 1896. A protection order was made on the same day. By resolution of 5th February, 1897, accepting the proposal in the arrangement matter, it was provided that the plaintiff should pay twenty shillings in the pound on all his unsecured debts and engagements, by lodging with the official assignee within two months from the confirmation of his proposal, or within such extended time as the Court might allow, a sum sufficient to pay same, such payment to be secured by vesting the plaintiff's estate in the official assignees as trustees, with power, in the event of default in lodgment of the money, to realize the estate; and, after payment of costs and creditors' claims out of the proceeds, the surplus was to be paid to the plaintiff. That resolution was adopted and confirmed by the Court, and on the 15th February, 1897, a vesting certificate was obtained and registered. The plaintiff made default in lodging the first instalment on 15th April, 1897, and on 16th July there was an order to the trustees to realize. On 30th July, 1897, a further vesting certificate was issued and duly registered. One shilling in the pound has been paid to the creditors, the balance remaining over, the total amount of indebtedness being about £11,000. Both Mr. Guedalla and Mr. Baker, who reside in England, the executors of the assignee of the mortgage for £12,000, swore that they did not know of the vesting of Mr. Harrison's estate till June last, and that they then came forward with reasonable diligence to act in the matter. Neither of them has been cross-examined, and I am bound to assume that they are telling the truth, and that neither of them had any personal knowledge of the matter. I was not aware that the fact of the vesting of the property in the assignees had ever been brought before me; but on looking through the large mass of documents dealing with the litigation in reference to this estate, I find that it was brought forward, and that it is mentioned in the affidavits. But the matter did not arise before me in regard to the question of the vesting of any property, or the right of Mr. Harrison to sue. It came before me simply in reference to the carriage of proceedings. I found Beattie v. Cordner in a derelict state with no one to carry it on to a final issue; I knew from the proceedings that Mr. Harrison was willing and anxious to do so, and the carriage of the proceedings was given to him. That, of course, was not a decision in any way affecting the present question, or the legal question now raised, because the duty of a person having carriage of proceedings is usually in great part merely ministerial; and all I had to do was to get some one to lift the case out of the position into which it had sunk. The appointment of Mr. Harrison to have carriage of the proceedings here, and a similar appointment made by the Land Judge in reference to the real estate, do not decide any question as to his right to sue in the present action.

Another branch of the litigation went to the House of Lords, and something is supposed to have happened there which settled the present question. But when it is considered, what happened does not involve any decision on the point in question. There the objection was made before the Committee of Appeals that Mr. Harrison was not competent to carry on the appeal. There was argument, and the decision appeared to have overridden the objection to his status, but no reasons are given. There was no argument in the House of Lords itself as to his status. He was heard on the appeal, and the appeal was dismissed. That only decides that he was a competent person under the circumstances to be heard on the appeal, and is a very different thing from deciding, as matter of law, that an arranging trader who has no authority from his assignees, in whom his property is vested, has power to litigate without the assignees being parties to the litigation.

The official assignees did not appear in the present proceedings. They are not parties to the action. The statement of claim does not disclose that Mr. Harrison is an arranging trader. Since the commencement of the proceedings the official assignees have been applied to in reference to the proceedings, and they very cautiously, whether prudently or not, abstained from interference, thinking perhaps that it would be time enough to intervene if the litigation resulted in any benefit to the estate.

Now, what is the effect of the arrangement proposal, acceptance, default, and vesting order, and certificate?

Section 349 of the Act of 1857 provides:—“From and after the date of the approval and confirmation of such resolution or agreement, all the estate and effects of such petitioning trader shall vest in the official assignees (if such shall be required by virtue of such resolution, and either alone or jointly with any person or persons, as may be expressed in such resolution) as fully as if such official...