Hurst v Green: Bankruptcy and Extended Civil Restraining Orders

Introduction

In this case, the High Court refused a bankrupt permission to make a number of applications (the effect of which would have been to annul his bankruptcy and overturn a summary judgment against him) and instead exercised its jurisdiction to extend an Extended Civil Restraining Order (ECRO) against him.

Background

Mr Hurst had been the sole executor of his mother's estate. In this capacity, he had sold her house and distributed the proceeds without taking into account that the house had been placed into two trusts. In distributing the proceeds, Mr Hurst failed to consider the views of the trustees of those trusts. The trustees brought a claim against Mr Hurst seeking to recover some of the proceeds and obtained summary judgment against him, precipitating his bankruptcy in February 2018.

Since then, he had sought to challenge his bankruptcy on a number of occasions. The grounds for doing so, which remained essentially the same throughout the different applications, were that transfer of the house into trust was invalid due to the operation of undue influence on his mother. Accordingly, he asserted that the trustees' views were not relevant. On 28 May 2021 an ECRO (an order preventing an applicant from taking further action for a specified  period) was made against Mr Hurst. This would last for two years until May 2023.  

In the current application, Mr Hurst sought permission to bring four different applications, the effect of which would have been the annulment of his bankruptcy. This was his fifth attempt to do so, the most recent previous attempt having failed only a matter of weeks previously.

Issues

The court considered the following issues.

  1. The primary issue before the court was whether to allow Mr Hurst to make the applications.
  2. For the reasons set out below, the court also went on to consider whether it was appropriate to extend the ECRO.

Decision

The court refused to grant Mr Hurst the permission he sought and instead found his application to be totally without merit. Mellor J considered that Mr Hurst had been blinded by a perceived conspiracy, lacked any objectivity and that his applications were totally without merit

Because of Mr Hurst's "repeated groundless applications", Mellor J then considered whether the ECRO should be extended. The court considered that it had the jurisdiction to both make and extend ECROs of its own motion but noted that the in the case of an extension the requirement was that it was appropriate in all of the circumstances to do so. When looking at all of the circumstances, the court must look at the recent conduct in light of the fact that an ECRO had initially been needed. In doing this, Mellor J followed the approach in Ashcroft v Webster and asked whether Mr Hurst had been irrational in his refusal to take no for an answer. The conclusion was that he had. This was based on the fact that Mr Hurst had made three applications which had been certified as totally without merit and yet had still persisted. Given this, and the fact that the ECRO only had around six months left to run, Mellor J made an order extending it for a further two years.

Conclusion

This case provides a useful authority on the approach the court may take in an extreme case involving a vexatious applicant and when considering whether to extend an ECRO.  It also highlights the Court's ability (and willingness in appropriate cases) to extend ECROs of its own motion where it thinks fit.