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Attorney Has ‘Nil’ Chance To Defeat Bankruptcy Ruling

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian attorney’s bid to overturn his bankruptcy adjudication has been rejected by the Court of Appeal because its prospects of succeeding “are nil”.

Richard Boodle, trading as Richard Boodle & Company, had sought an extension of time to appeal Supreme Court Justice Gregory Hilton’s refusal to set aside the Order declaring him a bankrupt over his failure to pay a $37,000 award.

This was obtained by a former client, Rebecca Valrejean, who Mr Boodle had represented in an action against her former employers. She obtained an award for $2,000 plus damages to be assessed on February 18, 2014, after Mr Boodle and his attorney, Julika Thompson, failed to submit a defence within the time stipulated by Supreme Court rules.

The Supreme Court’s deputy registrar subsequently determined the damages to be $35,000 at an October 2014 hearing, with the final judgement set down in February 2015. Mr Boodle’s failure to pay resulted in Ms Valrejean taking out a debtor summons against him in June 2015, but payment of the award remained outstanding.

This prompted Mr Boodle’s former client to seek a Supreme Court adjudication order that he be declared bankrupt, which was duly granted on June 8, 2016. Yet Mr Boodle sought to have the bankruptcy order “annulled or set aside” just three weeks later, along with a previous default judgment obtained against him by Ms Valrejean.

When the case was eventually heard before the Supreme Court, Justice Hilton ruled that the only issue he had to determine was whether Mr Boodle was properly served with the bankruptcy proceedings.

Rejecting Mr Boodle’s assertions that he was not, the judge said he preferred the sworn testimony of the two police servers - Sergeant Eric Burrows and reserve police officer Charles Gibson - given that it “was not shaken under cross-examination”.

Justice Hilton added that he found Sergeant Burrows “particularly convincing” when it came to recalling the time and place of service, and therefore up held the adjudication Order that affirmed Mr Boodle’s bankruptcy.

Sir Michael Barnett, in a unanimous verdict supported by his two fellow Court of Appeal justices, said it was “unfortunate” that Justice Hilton confined the hearing to whether the attorney was properly served as his pleadings “did raise other issues concerning the validity of the judgment debt, and whether it could form the basis of a debtor summons”.

Finding that this was “an error” by the Supreme Court judge, Sir Michael said the Court of Appeal had considered whether the matter should be sent back to the lower court for a new hearing.

However, he argued that this “would be an unwise use of judicial time” as the Court of Appeal had the power to decide whether the bankruptcy order should be overturned.

Turning to the other arguments advanced by Mr Boodle and his attorneys, Sir Michael said his argument that the bankruptcy order was “irregular” because it was filed without leave and “in default of appearance” was “factually incorrect”.

Pointing out that the bankruptcy Order was instead obtained after Mr Boodle failed to file a defence, Sir Michael wrote: “There is nothing in our Rules which required the respondent [Ms Valrejean] to obtain leave before entering the default judgment.

“Moreover, after the judgment was entered, the appellant [Mr Boodle] - knowing of its existence - did not apply to set it aside and agreed that the interlocutory default judgment for damages to be assessed should be agreed in the sum of $37,000.”

The Court of Appeal added: “The appellant asserts that he instructed his attorney to apply to set it aside. There is only his averment made after the adjudication Order and, if correct, may give him a claim against his former attorney.

“However, unless and until it was set aside he was obliged to comply with the judgment. Given that he was aware of the bankruptcy proceedings as the judge has found, that would not be a basis for the court to exercise its discretion to set aside or annul the adjudication Order.”

Sir Michael also rejected the argument that the proceedings violated the Bankruptcy Act because the judgment was obtained against “Richard Boodle trading as Richard L. Boodle & Company”, whereas the proceedings were brought against him personally.

The Court of Appeal ruled that this was “without merit” because Mr Boodle’s law firm, which court documents listed as being based at Columbus House at the junction of Nassau’s East and Shirley Streets, was “not a separate legal entity”.

The Court of Appeal also rejected arguments by the attorney, who was said to live at Port Del Mar in eastern New Providence, that the bankruptcy proceedings were full “of defects and irregularities” that had created a “substantial injustice”.

Sir Michael, though, concluded that there was “no basis” for such a complaint because Mr Boodle’s debt was not “disputed” - since he had agreed the amount owed, and never sought to set it aside.

“The appellant is a counsel and attorney of this court,” Sir Michael ruled. “With knowledge of the debtor summons he failed to apply to set it aside. With knowledge of the bankruptcy proceedings he did not take any steps to set aside the judgment or assert any defence to the petition.

“It is only after he was served with the adjudication Order that he [leapt] into action with the false claim that he was not served with the papers and was unaware of the proceedings.

“The court’s power to annul is a discretionary power. This is not a case in which it would be appropriate to exercise that power...... The prospects of a successful appeal are nil.”

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