Chapter 31.9 – ANNEX L – Table of key right of action cases


Chapter 31.9 – ANNEX L – Table of key right of action cases


Rights of action is an area which has been largely driven by case law.  To assist official receivers in understanding how the law has developed this table lists the key cases that have had some impact on rights of action.  The table is in rough chronological order and has links to the paragraph within the Chapter where the point made in the case in discussed more fully.  The (very) brief summary of the decision in each case should not be relied on its own but should, instead, be considered alongside the more detailed information in the Chapter.





Howard v Crowther (1841) 8 M&W 601


“Personal” actions do not vest


Paragraph 31.9.37


Rogers v Spence (1846) 8 ER 1586

Example of personal action staying with bankrupt (personal annoyance).


Paragraph 31.9.37


Beckham v Drake (1849) 2 HL Cas 579


“Personal” actions do not vest


Paragraphs 31.9.37 and 31.9.38


Kitson v Hardwick (1872) LR 7 CP 473

Trustee can assign right of action to bankrupt


Paragraphs 31.9.106 and 31.9.116


Ex parte James (1874) LR 9 Ch App 609

Obligation on officers of the court to act honourably and fairly.


Paragraph 31.9.28


Jackson v North Eastern Rly Co (1877) 5 Ch D 844

Trustee must, at least, become co-claimant on a vesting action.  Bankrupt cannot continue it alone.


Paragraph 31.9.71



Re Wilson ex parte Vine (1878) 8 Ch 364

Cannot intercept personal monies, but can claim fruits of investment, etc.


Paragraph 31.9.196


Leeming v Lady Murray (1879) 13 ChD 123

Trustee is not precluded from bringing or defending an action simply because he/she has not obtained sanction of committee.


Paragraph 31.9.135


Seear v Lawson (1880) 15 ChD 426, CA

Trustee can sell a right of action by assignment – does not constitute champerty or maintenance


Paragraph 31.9.106


Re Park Gate Waggon Works Co (1881) 17 Ch D 234

Liquidator can sell a right of action


Paragraph 31.9.106


Metropolitan Bank v Pooley (1885) 10 App Cas 210 HL

Action can be dismissed as frivolous or vexatious if bankrupt carries it on after vesting.


Paragraph 31.9.71


Guy v Churchill (1889) 40 ChD 481

Action may be sold by the trustee on the basis that some part of the fruits may come back to the estate.


Paragraph 31.9.107


Whitwood Chemical Co v Hardman [1891] 2 Ch 416, CA

Court will normally award damages (rather than reinstatement) for a wrongful dismissal.


Paragraph 31.9.166


Rose v Buckett [1901] 2 KB 449

Claim that gives rise for aggravated damages would remain with bankrupt



Re White ex parte Nichols (1902) 46 Sol Jo 569

Trustee will lose right to be paid out of estate if he/she does not get sanction.


General Billposting Co Ltd v Atkinson [1909] AC 118

Employee is released from contract in a wrongful dismissal.


Paragraph 31.9.167


Glegg v Bromley [1912] 3 KB 474

Right of action should be assigned without any conditions attached (e.g., a right to interfere in the action).


Paragraphs 31.9.06 and 31.9.108


Bannister v Bannister [1948] 2 All ER 133


Explanation of a constructive trust


Paragraph 31.9.200


Wilson v United Counties Bank [1920] AC 102

There can be two rights of action from the same breach of contract


Over-ruled by Ord v Upton.


Paragraph 31.9.42


Re Kavanagh [1950] 1 All ER 39

If claim settled before court and there has been no evidence to show the shares in which the settlement should be apportioned (between the causes of action – personal v property) it will be split equally.


Paragraph 31.9.192


Ramsey v Hartley [1977] 2 All ER 673

Trustee is entitled to assign claim back to bankrupt for a share of the net proceeds.


Paragraph 31.9.107



Re Papaloizu [1999] BPIR 106


14 December 1980

Trustee should exercise the power to assign causes of action to bankrupts with circumspection – where, for example, to do so would leave the defendant open to vexatious litigation.


Paragraph 31.9.118


R v East Berkshire Health Authority ex parte Walsh [1985] QB 152

Correct forum for a wrongful dismissal claim is Employment Tribunal.


Paragraph 31.9.166


Weddell v Pearce [1988] Ch 26

Since vesting is by operation of law, trustee does not have to give notice to potential defendants.


Paragraph 31.9.36


Assignment on terms that trustee is to receive part of the proceeds requires sanction of creditors’ committee


Paragraph 31.9.107


Re Hans Place [1992] BCC 737

Court will only overturn official receiver’s decision (e.g., not to assign) if decision mala fides or perverse.


Paragraph 31.9.117


Heath v Tang; Stevens v Peacock [1993] 4 All ER 694

Bankrupt has no locus standi to bring a cause of action that vests in trustee without consent of trustee or by order of court.


Paragraph 31.9.71


The appeal of any judgement on which bankruptcy order founded is a vesting action.


Paragraph 31.9.57



Linden Gardens Trust v Lenesta Sludge Disposals Ltd [1994] 1AC 85

Action may be non-assignable where there is an express contractual prohibition on assignment.


Paragraph 31.9.119


Re Oasis Merchandising Services Ltd [1995] 2 BCLC 493

Cannot assign rights of action that arise as a result of the insolvency order (preferences, transactions at an undervalue, etc.).


Paragraph 31.9.106


Re Rae [1995] BCC 102

Fishing licence (or similar) is a ‘personal’ asset.


Paragraph 31.9.62


Royal Bank of Scotland v Farley [1996] BPIR 638

Action seeking to overturn judgment on which bankruptcy founded is vesting asset.



Re Campbell [1996] 1 All ER 537

Can’t claim right to criminal injuries compensation.


Paragraph 31.9.60


Stein v Blake [1996] 1 AC 243

Value of claim is the difference between the claimed amount and any counter-claim.


Paragraph 31.9.8


Net difference between claim and counter-claim can be assigned.


Paragraphs 31.9.114 and 31.9.120



Three Rivers DC v Bank of England [1996] QB 292

Court will usually require that equitable assignor is joined as a party to the proceedings before judgment is given.


Paragraph 31.9.110


Re Edennote Ltd [1996] BCC 718

Trustee should not accept first offer (if there are multiple potential offers) without first testing the market.  Should offer settlement to defendant.


Paragraph 31.9.84


Citicorp and others v Official Trustee in Bankruptcy and Another [1996] FCA 1115


Frivolous claim (one that is unlikely to succeed) should not be assigned.


Paragraphs 31.9.153 and 31.9.118


RBS v Farley [1996] BPIR 638

Bankrupt has no locus standi to challenge judgment on which order is based.


Wordsworth v Dixon [1997] BPIR 337

Right of appeal in a vesting action would also vest.


Paragraph 31.9.57


Griffiths v Civil Aviation Authority [1997] BPIR 50

Pilot’s licence is ‘personal’ property.


Paragraph 31.9.62


Re Ng (a bankrupt) [1997] BCC 507

Trustee should not be used as a ‘hired gun’ – as a name in which to bring an action.


Paragraph 31.9.80



Seven Eight Six Properties v Ghafour [1997] BPIR 519

Assignment does not give retrospective right to bring an action if bankrupt had no previous right to bring action (e.g. where statute barred, seeking to overturn judgement on which order based).


Paragraph 31.9.121


Khan v Official Receiver [1997] BPIR 109

Trustee not obliged to assign action where only offer is derisory and seeking other offers would be an unjustifiable expense.


Paragraphs 31.9.101 and 31.9.114


Vickery v Modern Security Systems Ltd 1997 WL 1104285

Consequences of trustee continuing claim.


Paragraph 31.9.130


Griffiths v Civil Aviation Authority [1997] BPIR 50

Aviation licence is non-transferable and is personal.  Right to appeal against decision to withdraw licence is personal.


Paragraph 31.9.62


OR v Davis [1998] BPIR 771

Trustee can assign action to defendant.


Paragraph 31.9.115


Cummings c Claremont Petroleum [1998] BPIR 187

Right of appeal in a vesting action would also vest.


Paragraph 31.9.57


Re Bell [1998] BPIR 26

Lump sum awarded as periodic payment would simply be considered as lump sum (not, for example, income).


Paragraph 31.9.205



Vickery v Modern Security Systems Limited [1998] BPIR 164

Official receiver, as trustee, may be exposed to costs if he/she allows bankrupt to continue claim.


Paragraph 31.9.72


Morris v Morgan [1998] BPIR 754 CA

A right of appeal may constitute a right of action if it has an economic value in its own right.


Paragraph 31.9.57


Hamilton v OR [1998] BPIR 602

Bankrupt may request re-assignment of cause of action where trustee does not take it on.


Paragraph 31.9.116


Assignment should be absolute.  Trustee may remain vulnerable to an adverse costs order, if he/she retains an interest in the outcome – but not if sold outright.


Paragraph 31.9.108


Re Landau [1998] Ch 223

A provision prohibiting assignment of a right of action is not infringed by the vesting in the estate as the action passes into the estate without assignment [s306(2)], but is deemed to have been assigned [311(4)].


Paragraph 31.9.119


Artbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426

Court may not allow claim ‘out of time’ where, to do so would allow a ‘second bite of the cherry’.



Oasis Merchandising Services [1998] Ch 170

Official receiver, as trustee, may not assign right of action that arises as a consequence of insolvency order (e.g. a preference).


Paragraph 31.9.106

Osborn v Cole [1999] BPIR 251

Bankrupt may appeal, under s303 of the IA1986, decision not to re-assign.


Paragraph 31.9.117


Official receiver, as trustee, can seek indemnity (e.g., against costs) from assignee.


Paragraph 31.9.124


Craig v Humberclyde Industrial Finance  [1999] BPIR 53

Trustee can seek direction from court as to terms in which he/she can enter into assignment.


Paragraph 31.9.122


If the value of the counter-claim is higher than the value of the claim this will, effectively, be a bar on assignment.


Paragraph 31.9.120


Stock v London Underground Ltd 30 July 1999 CA


Times, August 13 1999


One claim can have two heads of damage – a “hybrid” claim.


Paragraph 31.9.43

Ord v Upton [2000] 1 All ER 193

Hybrid action vests in trustee.


Paragraph 31.9.43


Glenister v Rowe [2000] Ch 76

Costs after bankruptcy not a bankruptcy debt.


Paragraph 31.9.82



Mulkerrins v Price Waterhouse Coopers [2001] PNLR 5

It is open to bankrupt to apply for order that action does not vest.


Paragraph 31.9.78


Edmonds Judd v Official Assignee CA(NZ) [2001] BPIR 468

Trustee should not ‘traffic’ frivolous or vexatious claims.


Paragraph 31.9.118


Patel v Jones [2001] EWCA Civ 779

Limit claim for future lost earnings to three years.


Paragraph 31.9.181


Haq v Singh [2001] 1 WLR 1594

Assignment should be made before the expiration of the relevant limitation period.


Paragraph 31.9.123


Cork v Rawlins [2001] BPIR 222

Permanent disability benefit paid under insurance policies in respect of an accident suffered by the debtor before bankruptcy is bankruptcy asset.


Paragraphs 31.9.59 and 31.9.207


Faryab v Smith [2001] BPIR 246

Bankruptcy should not be used as a means to stifle a claim.


Trustee should be careful to seek advice re merits of assignment in complex claims.


Paragraph 31.9.100 and 31.9.102


Quadmost Ltd v Reporotech (Pebsham) Ltd [2001] BPIR

Action may be non-assignable where express contractual prohibition.


Paragraph 31.9.119



Hamilton v Official Receiver [2002] BPIR 582

Trustee should accept offer for assignment if it is reasonable and does not prejudice him/her.


Paragraph 31.9.101


Cummings v OR [2002] BPIR 246

Trustee should see that case has merit before assigning and if it does have merit he/she should seek payment.


Paragraph 31.9.101


Official Receiver v Mulkerrins [2002] BPIR 582

Loss of future earnings a property claim.

(though see Patel v Jones).


Paragraph 31.9.181


Grady v Prison Service [2003] 3 All ER 745


Particularly, paragraphs 25-27

Unfair dismissal is a claim for reinstatement, so cannot vest in trustee.  Wrongful dismissal is a claim for breach of contract for which a compensatory payment can be made.  That action would vest (i.e. not seeking reinstatement)


Paragraph 31.9.164


Mulkerrins v PricewaterhouseCoopers [2003] UKHL 41

Bankrupt can apply for an order declaring that a right of action does not vest, but only those party to the application would be bound by its effect.



Shepherd v Legal Services Commission [2003] BCC 728

Trustee has a duty to consider how best to deal with a claim, so it would not be stifled by bankruptcy.


Paragraphs 31.9.21 and 31.9.115


Re Shettar [2003] BPIR 1055

Official receiver, as trustee, should not carry out an assignment that would leave defendant open to vexatious litigation.


Paragraph 31.9.118


Official receiver, as trustee, can seek indemnity (e.g., against costs) from assignee.


Paragraph 31.9.124


Khan v Trident Safeguards Ltd [2004] EWCA Civ 624

Claim for racial discrimination will not vest.


Paragraph 31.9.174


Claimant can limit claim to avoid it vesting – probably only in discrimination cases.


Paragraph 31.9.44


Ultraframe (UK) Ltd v Rigby and others (CA) BILD 2001050178




Liquidators should not assign without proper consideration of the value of the claim.


Paragraph 31.9.112


Ajahot v Waller [2005] BPIR 82

Tax appeal is a vesting asset.


Paragraph 31.9.57



James v Rutherford-Hodge [2005] EWCA Civ 1580

Bankrupt’s standing to (not) bring claim is unaffected by him/her having been awarded legal aid.


Paragraph 31.9.74


Skinner v Hood [2005] EWCA Civ 1634

Bankrupt cannot have a vesting order in disclaimed property.


Paragraph 31.9.222


Allan v Newcastle-upon-Tyne City Council; Degnan v Redcar and Cleveland Borough Council [2005] ICR 1170

Compensation for non-economic losses cannot be awarded in a claim for equal pay


Paragraph 31.9.180


Shepherd v Official Receiver [2006] All ER (D) 72 (Nov)

Court will apply “reasonableness” test when considering a s303 application against trustee’s decision not to assign.


Paragraph 31.9.117


James v Rutherford-Hodge [2006] BPIR 973

Inability of bankrupt to bring legal action unaffected by him/her having being granted legal aid.


Paragraph 31.9.74


Horton v Sadler [2007] 1 AC 307

Court can allow claim after expiration of limitation where there has been, for example, a technical failure on the part of the claimant.


Paragraph 31.9.149


Wilson v Specter Partnership [2007] BPIR 649

Official receiver, as trustee, not obliged to assign right of action where no worthwhile offer.


Paragraph 31.9.101



Dadourian Group v Simms [2008] EWCA Civ 474

Bankrupt has no locus standi even where trustee has yet to be appointed.


Paragraph 31.9.73


Nomura International plc v Granada Group Ltd [2008] Bus LR 1

Protective claim may be challenged if it does not meet procedural requirements.


Paragraph 31.9.146


Calvert v William Hill Credit Limit Limited [2008] EWCA Civ 1427

Action against bookmaker for allowing debtor to gamble is likely to be without merit.


Paragraph 31.9.26


Hellard v Michael [2009] EWHC 2414 (Ch)

Official receiver, as trustee, should be fair to all parties when negotiating assignment of right of action.


Paragraph 31.9.113


Gold Shipping Navigation Co SA v Lulu Maritime Ltd [2009] EWHC 1365 (Admlty)

A poorly worded ‘standstill agreement’ may leave claimant unable to bring claim.


Paragraph 31.9.150


Pickthall v Hill Dickinson LLP [2009] PNLR 31

Person with no interest in a claim cannot bring it (which, of course, would include bankrupt in a vesting claim).


Paragraph 31.9.71


Young v OR (unreported) 23 March 2010

Denial of a bankrupt’s right to bring an action not contrary to ECHR or HRA.


Paragraph 31.9.75