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Reynard v Fox (2018)

Mr Reynard, a Bankrupt, made a claim against Mr Fox, his Trustee. Mr Reynard issued proceedings for alleged breach of contract and negligence against the Trustee. He alleged that the Trustee had not assessed claims properly, and had incorrectly valued them.

Mr Reynard asserted that a contract existed between him and his Trustee under which the Trustee would pay the balance of the estate to him, after payment of creditor claims and costs and expenses. He claimed that it was an implied term that reasonable care and skill would be exercised by the Trustee, but did not detail any particulars of the alleged breach of this implied term.

The Trustee made an application to strike out Mr Reynard’s claim under the CPR, as he had failed to comply with an existing court order and there were no reasonable grounds for bringing the claim, among other reasons.

Mr Reynard had made a previous application under s303 IA 1986 and the court had made decisions on several factual and legal issues raised. The Trustee considered this an abuse of process by attempting to reopen the issues which had already been decided by that s303 application.

A supplementary skeleton argument was also submitted by Mr Reynard, seeking permission to bring a claim under s304 IA 1986 (alleging misfeasance and/or breach of duty by the Trustee) as an alternative to his breach of contract and negligence claims.

The court found that there was no contract between Mr Reynard and Mr Fox as Trustee and this claim was struck out.

The court concluded that the negligence claim should have been made under s304 IA 1986. This was also struck out.

They also considered the later skeleton argument to bring a claim under s304, and stated that Mr Reynard could not change his claim in the middle of a hearing. He had represented himself throughout, and claimed that he did not have detailed knowledge of insolvency regulations.

Trustees should be careful what advice is given outside of the Trustee-Bankrupt relationship, as this could open up the Trustee to negligence claims similar to the above.

This case was discussed in more detail in our recent CPD Tap webcast.

Posted: 17.07.2018
Tags:  newsletter
 


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