The debtor challenged the bankruptcy petition and receiving order saying that the creditor had attempted in connection with the proceedings to extort andpound;8 15s from the debtor in excess of the sums lawfully due under a court judgment. He said that this was ‘extortion’ in bankruptcy law, ie the oppressive use or threat of proceedings in order to obtain some collateral advantage, such that the court would not permit the creditor to make use of the process which he had abused.
Held: The court considered, obiter, the issue of a strike out of an action as an abuse of process.
Lord Evershed MR said: ‘The so-called ‘rule’ in bankruptcy is, in truth, no more than an application of a more general rule that court proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which such proceedings are properly designed and exist, and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualifed from invoking the powers of the court by proceedings he has abused.’
Judges:
Lord Evershed MR
Citations:
[1955] Ch 600
Jurisdiction:
England and Wales
Cited by:
Approved – Speed Seal Ltd v Paddington CA 1985
The court was asked whether the defendant should be permitted to add to his pleadings a counterclaim asserting that the action was brought in bad faith for the ulterior motive of damaging the defendants’ business, and not for the protection of any . .
Cited – Pitman Training Ltd and Another v Nominet UK and Another ChD 22-May-1997
The defendant had received a request to register the domain name ‘pitman.co.uk’ from the claimants, who held the trade mark. The domain was not activated, and was de-registered by the defendants and then re-registered by another company. Action was . .
Cited – Land Securities Plc and Others v Fladgate Fielder (A Firm) CA 18-Dec-2009
The claimants wanted planning permission to redevelop land. The defendant firm of solicitors, their tenants, had challenged the planning permission. The claimants alleged that that opposition was a tortious abuse because its true purpose was to . .
Cited – Hays Plc v Hartley QBD 17-May-2010
Mr Hartley operated a news agency, and provided to the publisher of the Sunday Mirror, MGN Ltd, allegations of racism that had been levelled at the claimant company by former employees. The allegations were reported in an article headed ”KKK . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice, Insolvency
Updated: 13 May 2022; Ref: scu.190158