COURT OF APPEAL

Church of Scientology Advanced Organisation Saint Hill Europe and South
Africa v. Scott and Others

[1997] BPIR 418

JUDGES: Neill, Millett and Phillips LJJ

DATE: 26 JUNE 1996

Bankruptcy ­ Right of bankrupts to prosecute or defend appeals ­ Whether
subject matter of appeals excepted property ­ Insolvency Act 1986, s 283(2)

S and L were former members of the Church of Scientology ('the Church'). In
1983 they obtained by unlawful means certain documents belonging to the
Church, which issued proceedings against them seeking an injunction,
delivery up and damages on the basis that the documents were confidential. S
and L admitted that the Church was entitled to the return of the originals
but alleged a right to retain copies which they had taken. Summary judgment
was entered against S and L in relation to the original documents with
damages to be assessed. On 22 February 1994, the first day of the trial, the
copies having been returned to the Church's solicitors in 1984 to abide the
result of the proceedings, the Church applied for leave to discontinue the
action. S and L opposed the application on the grounds that they wished to
establish their right to use the copies by publishing their contents for the
purpose of denigrating the Church. The judge gave leave to discontinue upon
terms that the copies were returned to L upon his undertaking not to use
them or publish their contents. An injunction was granted against S in the
same terms and the Church was also ordered to return copies to S. The judge
ordered the Church to pay S and L's costs of the action. On 23 July 1994 the
damages were assessed against S and L at nil. The Church appealed against
the orders directing return of the copies and against the assessment of
damages. S and L appealed against the imposition of the undertakings and
injunctions. It subsequently transpired that on 6 April 1992 a bankruptcy
order had been made against S. On 25 August 1995 a bankruptcy order was made
against L and on 15 December 1995 a second bankruptcy order was made against
S. The question whether S and L continued either alone or with their
trustees in bankruptcy to have any interest in the further prosecution or
defence of the appeals arose as a preliminary issue in the appeals. S and L
argued that the copy documents were 'tools, books, vehicles and other items
of equipment ... necessary ... for use personally [in their] employment,
business or vocation' within the meaning of the Insolvency Act 1986, s
283(2)(a), which had not vested in their trustees in bankruptcy.

Held -

(1) There was no evidence that possession of the copy documents was
necessary for the carrying on of any vocation or business by either S or L.

(2) Notwithstanding the personal nature of the undertakings and injunction,
the right to pursue the appeals and to resist the Church's appeals had
vested in the respective trustees in bankruptcy to the exclusion of S and L.
Statutory provisions considered

Insolvency Act 1986, ss 283, 306, 436
Cases referred to

Beckham v Drake (1849) 2 HL Cas 579

Dence v Mason (1879) WN 177, CA

Heath v Tang; Stevens v Peacock [1993] 1 WLR 1421, [1993] 4 All ER 694, CA

The first defendant appeared in person.; The second defendant appeared in
person.; R. Reid for the offical receiver of the first defendant; Jonathan
Russen for the trustee in bankruptcy of the second defendant; The third and
fourth defendants did not appear and were not represented.; Stephen Nathan
QC for the plaintiffs
Harkavys for the trustee in bankruptcy of the second defendant; Hodkin & Co
for the plaintiffs
26 June 1996

MILLETT LJ

There are pending in the Court of Appeal the following appeals and
applications:

(1) An appeal by the plaintiffs and by the first and second defendants in
the action from an order of his Honour Judge Sumner dated 8 March 1994
granting the plaintiffs leave to discontinue the action against them on
terms. Leave to appeal was granted by this court on 13 November 1994.

(2) An appeal by the plaintiffs from an order of Master Turner dated 23 July
1994 assessing damages against the first and second defendants at nil.

(3) Applications by both the plaintiffs and both defendants for leave to
adduce further evidence on the hearing of the appeals. The defendants no
longer wish to adduce such evidence.

(4) Applications by two third parties, who are licensees and copyright
owners of certain documents, to intervene in the proceedings. All these
applications have been directed by this court to be heard at the same time
as the appeal. None of them is before us today.

We have to decide a preliminary issue whether the defendants have locus
standi to prosecute or defend the appeals. The issue arises because both
defendants are or have become the subject of bankruptcy orders. I will try
to summarise the facts as shortly as I can.

The plaintiffs are a Danish corporation which forms part of the Church of
Scientology. There were originally four defendants to the action, but the
various appeals and applications which I have described concern only the
first two defendants, Mr Scott and Mr Lawley. They, like the other two
defendants, are former members of the church who became disenchanted and
left the church in 1981 or 1982. In 1983 Mr Scott set up what the judge
described as a splinter group of the church in Scotland.

The proceedings concern documents described in the order of Judge Sumner as
'the NOT's documents'. These are the property of the plaintiffs and relate
to the training practices of the church and counselling techniques used by
the church which the plaintiffs allege and the defendants deny contain
information which is confidential to the plaintiffs.

In 1983 the first two defendants obtained access to and removed the subject
documents. It is not denied by the defendants that they obtained the
documents by unlawful means. Indeed, Mr Scott was prosecuted and convicted
in Denmark in relation to the affair. Some 3 months after the defendants had
obtained the documents, the plaintiffs brought proceedings in the Queen's
Bench Division for an injunction to restrain the defendants from dealing
with or copying the documents which they had obtained and for delivery up
and damages.

By their defence the defendants admitted that the documents were the
property of the plaintiffs and that the plaintiffs were entitled to the
return of the originals. But they denied that the contents of the documents
were confidential to the plaintiffs or that the plaintiffs were entitled to
injunctive relief, and claimed the right to retain the copies which they had
made. Their defence was based on a variety of grounds which it is not
necessary to rehearse, but they included allegations that publication of the
contents of the documents was in the public interest, that the information
which they contained was already in the public domain, and that the
defendants were able to publish the material which they contained without
making use of the copies in their possession.

The plaintiffs obtained various interlocutory orders for the return of
documents and copies, and on 13 July 1984 Kennedy J gave summary judgment
for the plaintiffs under Ord 14 for the originals to be returned to the
plaintiffs and for damages for wrongful interference to be assessed. He gave
the defendants unconditional leave to defend the remainder of the claim,
that is to say the part of the claim which related to the return of the
copies and the claim for injunctive relief. The existing interlocutory
orders, however, which related to the copy documents remained in force
pending the trial. The result of the various orders was that the plaintiffs
obtained the return of all the documents, both original and copies. In the
case of Mr Scott, however, this was not by virtue of any court order. The
documents, both original and copies, which were in his possession had been
returned by his wife before the commencement of the proceedings. The rest of
the documents, both original and copies, were returned by Mr Lawley, whether
they had been in his possession or in the possession of the third or fourth
defendants, without any distinction between them. The copy documents were
retained by the plaintiffs' solicitors to abide the result of the
proceedings. The defendants did not counterclaim for the return of the
copies.

After a long and unexplained delay the trial of the action was listed for
hearing before his Honour Judge Sumner sitting as an additional judge of the
High Court on 22 February 1994. During the previous week the action against
the third and fourth defendants was settled. They abandoned all claims to
the copy documents, and these were returned to the unconditional possession
of the plaintiffs. On 22 February 1994, which was the first day of the
trial, the plaintiffs applied to the judge for leave to discontinue the
action against the remaining defendants, Mr Scott and Mr Lawley. The
application, which came as a surprise to them, was opposed.

The plaintiffs submitted that the trial could achieve nothing. They had
obtained judgment under Ord 14 for the return of the originals, and the
originals had been returned; all copies had been either returned or
destroyed; the defendants were not counterclaiming for the return of the
copy documents; there was no point in continuing with the trial; and the
defendants' wish to do so was motivated by a desire to indulge in
mud-slinging. That was the substance of the plaintiffs' submissions.

The defendants opposed the application. They wished to argue their right to
the copy documents and to make use of the information which they contained.
But they were willing to offer undertakings not to use them for the purpose
of running training courses or anything of that kind. Their stance was
entirely consistent with the attitude which they appeared to have adopted
throughout. It seemed that they were not alleging that they wished to use
the documents themselves in order to carry on their work or to emulate the
plaintiffs in any way, but rather to denigrate the plaintiffs and show them
up. The judge thought that there was a strong case for discontinuance and
gave the plaintiffs leave to discontinue. But he was concerned to impose
terms designed to ensure that the plaintiffs should obtain no advantage from
the proceedings other, of course, than that which they had already obtained
from the summary judgment. This involved the return of the copy documents to
Mr Lawley (though not to Mr Scott) and the extraction of undertakings or the
imposition of injunctions so that neither of the defendants could not make
any improper use of the documents which Mr Lawley would obtain.

I will read from the judgment of the judge in order to show the
considerations which he had in mind. He said:

'In my judgment and in the exercise of the discretion granted by [the
relevant] rule, I consider that I should permit the plaintiffs to
discontinue, unless it can be shown that the plaintiffs have gained some
advantage from the litigation to date, or the defendants have suffered from
disadvantage from the litigation at this stage which it would not be right
and proper that that party should keep or have to bear. If I make the order
for discontinuance at this stage and without terms ..., the plaintiffs will
retain the copies, that is the copies surrendered by court order by Mr
Lawley ... It is important to note that it is the defendants' case that,
though they were unlawfully in possession of those documents, they claim
they are entitled to them in any event.'

Then the judge said:

'I am satisfied that the litigation to date has had this advantage for the
plaintiffs, namely, that they have, by an order properly obtained, had
returned to them copies of the documents; to that extent they have obtained
an advantage in this litigation. I am equally satisfied that if the
defendants win, it may possibly depend upon what grounds, there is a
prospect that the court will not only discharge the injunctive orders so far
made, but also, were there then an application, order the return of the
documents which had been handed over if that were not going to be
voluntarily done. Thus to deny the defendants a trial when they wish to
recover those documents and have arguments in support on which there is a
chance that they could succeed, and when discontinuance deprives them of
that argument, is to give the plaintiffs an advantage in the litigation ...
Just because that may be that position does not, in my judgment, justify
refusing the plaintiffs the right to discontinue these proceedings. On the
other hand, it does justify in imposing terms that leave neither party with
such an advantage in the event of discontinuance. I consider that I am
justified in this instant in imposing such terms in order not to permit the
plaintiffs to obtain an advantage from the litigation to date which if the
case continued they might lose.'

Accordingly, by an order, which was not drawn up until after a further
hearing on 8 March 1994, the judge ordered as follows. He first extracted an
undertaking from Mr Lawley that he should not do any of the following acts:

'(a) use the copies of the NOT's materials ("the copy NOT's documents") to
assist him in running courses in Scientology or any system of similar
beliefs or in counselling any persons whether for financial gain or
otherwise;

(b) infringe any third party's copyright in the use of the NOT's documents;

(c) make any other use of the copy NOT's documents which may be an unlawful
use (including photocopying the copy NOT's documents).'

There were no procedural provisions included to enable disputes about the
undertakings to be resolved.

Next the plaintiffs were given leave to discontinue the balance of the
action as against the first and second defendants upon terms thereinafter
set out, and for the avoidance of doubt it was declared that the order for
summary judgment dated 24 August 1994 (the date was an error) in the action
should stand.

The judge then granted an injunction against Mr Scott in the terms of the
undertaking given by Mr Lawley and made an order that the plaintiffs should
within 7 days give to Mr Lawley one copy of each of the NOT's documents
which he delivered to the plaintiffs' solicitors pursuant to the order of 29
March 1984. I should interpose to say that, because it was not possible to
identify which of the documents delivered by Mr Lawley belonged to him and
which belonged to the third and fourth defendants, the order was that one
copy of each of the documents should be delivered.

Finally, the judge ordered the plaintiffs to pay the defendants' costs of
the action and stayed the orders pending an appeal to this court.

The plaintiffs appeal from the order requiring them to return copies of the
documents to Mr Lawley. Mr Scott appeals against the judge's refusal to
order delivery of copies of the documents to him even though the plaintiffs
had not obtained their return from him by virtue of any court order. Both
defendants appeal from the injunctions or undertakings which restrict the
use which they can make of the copies which either of them may obtain under
the judge's order or on appeal. In their notices of appeal both defendants
have offered more limited undertakings in the following terms:

'[not to] use the copies of the NOT's materials ... in running courses in
Scientology ... or counselling for financial gain ...'

It should be observed that the defendants' appeals from the judge's order
would be frustrated by the success of the plaintiffs' appeal, since in that
event there would be no documents on which the undertakings or injunctions
could bite.

On 23 July 1994 Master Turner assessed the damages under the Ord 14 judgment
at nil and ordered the defendants to pay the plaintiffs' costs. The
plaintiffs appeal from the master's assessment.

The present preliminary issue arises because of bankruptcy proceedings which
have followed the making of the order below. On 25 August 1995 a bankruptcy
order was made against Mr Lawley. On 28 November 1995 Mr Ian Franses was
appointed trustee in bankruptcy. On 15 December 1995 a bankruptcy order was
made against Mr Scott in the Truro County Court on the petition of the
plaintiffs. The official receiver in Plymouth is acting as trustee in
bankruptcy. It has since transpired that a bankruptcy order had previously
been made against Mr Scott on 6 April 1992 by the Sunderland County Court.
The official receiver in Newcastle was the trustee in bankruptcy. That
bankruptcy was automatically discharged on 6 April 1995. The official
receiver was not informed about these proceedings.

The plaintiffs submit that all the rights of the defendants, whether as
appellants, applicants or respondents, are now vested in their respective
trustees in bankruptcy; the defendants dispute this. In the case of Mr
Scott, the question whether the rights vested in the first or second trustee
in bankruptcy is not for decision today. It depends on the precise
identification of the rights in issue, and it is hoped that the two trustees
in bankruptcy can resolve this issue by agreement. If they cannot, they will
have to make an application at first instance for the question to be
resolved. So far as we are concerned the only question for decision is
whether the defendants continue, either alone or jointly with their trustees
in bankruptcy, to have any interest in the further prosecution or defence to
the various appeals.

In the case of Mr Lawley, the official receiver has sanctioned the exercise
of various statutory powers, including the power to appear in the present
appeals and to compromise them. The trustee does propose to compromise them.
He has reached agreement with the plaintiffs which is conditional upon the
court determining that the trustee has locus standi in the appeals to the
exclusion of Mr Lawley. In essence, the terms of compromise are that the
trustee will assign to the plaintiffs all the rights and interests of the
bankrupt in relation to the copy NOT's documents, the subject matter of the
respective appeals, for the sum of £ 25,000. No such compromise is yet in
prospect in the case of the first defendant, Mr Scott, but it self-evident
that the prospects of a settlement would be enhanced if the trustee in
bankruptcy were the party with the exclusive power to compromise the
appeals.

I turn to the law. Section 306(1) of the Insolvency Act 1986 provides:

'The bankrupt's estate shall vest in the trustee immediately on his
appointment taking effect or, in the case of the official receiver, on his
becoming trustee.'

Section 283(1) defines the bankrupt's estate and it provides, so far as
relevant:

'(1) Subject as follows, a bankrupt's estate for the purposes of any of this
Group of Parts comprises-

(a) all property belonging to or vested in the bankrupt at the commencement
of the bankruptcy, and

(b) any property which by virtue of any of the following provisions of this
Part is comprised in that estate or is treated as falling within the
preceding paragraph.

(2) Subsection (1) does not apply to-

(a) such tools, books, vehicles and other items of equipment as are

necessary to the bankrupt for use personally by him in his employment,
business or vocation; ...'

Subsection (2)(b) is not relevant, nor is the proviso, nor subs (3).

Section 436 defines expressions used generally in the Act. It contains a
definition of property as including:

'... money, goods, things in action, land and every description of property
wherever situated and also obligations and every description of interest,
whether present or future or vested or contingent, arising out of, or
incidental to, property ...'

So it includes choses in action. Although all choses in action vest in the
trustee by virtue of s 436, in fact the courts have long placed a gloss upon
the predecessors of the section so that certain causes of action which are
personal to the bankrupt do not in fact vest in his trustee. These include
cases in which:

'... damages are to be estimated by immediate reference to pain felt by the
bankrupt in respect of his body, mind, or character, and without immediate
reference to his rights of property' (Erle J's judgment in Beckham v Drake
(1849) 2 HL Cas 579).

So actions for personal injury or defamation, for example, do not vest in
the trustee in bankruptcy, but may continue to be litigated by the bankrupt.
Where the bankrupt is a defendant, there is no question of any property as
such vesting in the trustee but, nevertheless, since any claim for monetary
relief or for the return of property will be a claim which will have to be
brought against the trustee in bankruptcy, since the subject matter of the
proceedings will have vested in the trustee in bankruptcy, the bankrupt has
no continuing interest in defending the proceedings. On the other hand
again, some actions seeking relief such as injunctions against the bankrupt
personally which do not directly concern his estate can still be maintained
against the bankrupt himself, and he is entitled to defend them and, if he
loses, to appeal.

This distinction was the basis of the decision of the Court of Appeal in
Dence v Mason (1879) WN 177, in which a bankrupt wished to appeal against an
order made before the bankruptcy granting an injunction to restrain passing
off and ordering him to pay costs. His trustee in bankruptcy declined to
appeal but the court said that the bankrupt himself could appeal against the
injunction:

'... which was a personal order against him [although of course the
bankrupt] had no interest in the order as to costs, his estate being now
vested in the trustee.'

A modern exposition of these rules is given by Hoffmann LJ as he then was in
Heath v Tang; Stevens v Peacock [1993] 1 WLR 1421.

Since the vesting of the estate takes place on the date of the appointment
of the trustee in bankruptcy, or of the official receiver when he is the
trustee in bankruptcy, it is plain that the identification of the property
which vests must be made as at that date.

At first sight it appears, and it is submitted by both defendants, that they
must be entitled to appeal, since their whole purpose in appealing is to
dispose of an undertaking or an injunction made personally against them and
which restricts their future activities. But if the position is examined
more closely it is very different.

The defendants are concerned in the following outstanding appeals and
applications. First, the plaintiffs' appeal against the order of Master
Turner dated 2 August 1994 assessing damages at nil. It is plain that
neither defendant has any locus standi at all in resisting that appeal. Any
damages to which the plaintiffs may be found on appeal to be entitled will
constitute a bankruptcy debt which must be proved for in accordance with the
1986 Rules. The trustee in bankruptcy has the power to compromise the claim
and the bankrupts themselves have not. Next, there is the application by two
third parties, copyright owners and licensees, for leave to intervene in the
proceedings. Their application is ancillary to the substantive appeals and
need not be considered separately; similarly, of course, with the various
applications for leave to adduce further evidence and so on.

I turn then to the substantive appeals from the order of Judge Sumner.
Taking them in the logical order in which they would necessarily be taken by
the Court of Appeal, there is first the plaintiffs' appeal against the order
that the plaintiffs should deliver the copy documents to Mr Lawley. Mr Scott
himself is not directly involved in that appeal, though he is vitally
interested in its outcome because he has an appeal against Judge Sumner's
refusal to make a similar order in his favour. Mr Lawley has obviously the
stronger case for an order for the delivery of the documents than has Mr
Scott, but as regards locus standi the two are in the same case. Neither of
them has a legal interest in the result of the appeals, since any documents
which may be ordered to be returned will have to be delivered, not to Mr
Scott or Mr Lawley, but to their respective trustees.

Finally there are the appeals by both defendants from the extraction of
undertakings or imposition of injunctions against their use of the documents
if and when returned. At first sight this does appear to be a matter of
personal interest to them in which they ought to be able to maintain an
appeal, but that is not in fact the case. If the plaintiffs succeed on the
appeal, they will not be returning any documents, and no question of
injunctions or undertakings will arise. They can be discharged as
superfluous. If on the other hand the documents are returned, they will be
returned to the trustee in bankruptcy, and again no question of any
undertakings or injunctions will arise. The defendants' appeals are, I
think, properly described by the trustees in bankruptcy as parasitic, and
only the trustees in bankruptcy have a right to be involved.

This, however, is subject to one argument which has been advanced by the
defendants. They accept that their estates have vested in their respective
trustees in bankruptcy, but they submit that the documents fall within the
exception provided by s 283(2) (tools and equipment necessary for the
carrying on of the bankrupt's trade, vocation or employment). The trustees
in bankruptcy made a preliminary submission of law that the subsection does
not extend to tools and equipment not in the possession of the bankrupt at
the date of vesting, since the right to obtain possession is a mere chose in
action and not the goods themselves.

This raises a question of some importance which I would be reluctant to
decide on this appeal unless it were necessary do so. I would tentatively
question the correctness of the submission on the basis that, given the
width of the definition of the estate which does vest in the trustee in
bankruptcy and, in particular, the fact that the property which vests
includes choses in action, it may be necessary to give a similarly wide
definition to the exception in subs (3). If so, it would extend not only to
the tools, books, vehicles and other items of equipment in the actual
possession of the bankrupt, but also to the rights to recover their
possession by action if necessary. The consequences of a decision to the
opposite effect would be very odd. But I do not decide the point because, in
my judgment, it is unnecessary to do so.

I turn to the defendants' submissions that the right to pursue the appeals
or resist them have not vested in the trustees in bankruptcy. Mr Scott's
submissions are very wide-ranging, and I shall probably not do justice to
them by attempting to summarise them. He has made a large number of
different submissions including the following: that it would be a denial of
justice to deny him the right to appeal Judge Sumner's order; that he has
won the moral high ground and the argument, demonstrated by the fact that
the plaintiffs have discontinued; that there is a strong public interest in
the case; that the materials represent an important aspect of his own
long-standing intellectual studies and his work in counselling and
psychotherapy; that he was fighting for the right to use what he had learned
in Scientology freely and without impediment; that he ought not to have been
made bankrupt, and that the documents represent an important aspect of his
work in counselling and psychotherapy and as a minister of religion.

Mr Scott's submission that the bankruptcy order was not properly made is not
a matter which can be raised in this court in this way on the hearing of a
preliminary issue as to locus standi in a forthcoming appeal. Unless and
until the bankruptcy order is annulled, it stands, and with it the vesting
of the property in the trustee in bankruptcy and the loss of locus standi if
that be the consequence. With one exception all the other grounds represent
arguments which might validly be put forward on the hearing of the appeal
and might - I do not say would - be grounds for disturbing the order made by
Judge Sumner. But they are irrelevant to the question whether Mr Scott or
his trustee in bankruptcy has the right to pursue or defend the appeals. The
only submission which is relevant to that question is whether the right to
pursue the appeals or to resist the plaintiffs' appeals, which are plainly
within the property which vests in the trustee in bankruptcy, are excluded
from the vesting by the operation of subs (2); and that depends on whether
the documents are tools, books, vehicles or other items of equipment
necessary to the bankrupt for use personally by him in his employment,
business or vocation.

Mr Scott left the church in the early 1980s and worked thereafter on an oil
rig and later as a financial services consultant. He became financial
director of a small company in the construction industry which became
insolvent at the time of the recent recession. At approximately the time of
the bankruptcy order which was made against him, Mr Scott gave up that
employment, and he has been unemployed for several years since, living on
government income support. He did not disclose any occupation to the
official receiver and told his trustee that he had not traded since April
1992.

In his affidavit evidence and before us he has stressed that he carries on a
vocation as a minister of religion, and that involves him in counselling and
giving psychotherapy to persons who have problems of various kinds. He
claims that the documents are necessary for the purpose of enabling him to
carry on his vocation as a minister of religion or as a counsellor or
psychotherapist.

The problem with this submission seems to me to be that Mr Scott's wife
returned the copy documents before the proceedings commenced, and Mr Scott
has not counterclaimed for their return. In other words, so far as these
proceedings are concerned, Mr Scott is asserting no proprietary claim. If
the action had continued without discontinuance and the first defendant had
succeeded completely, he would still not have recovered possession of the
copies because of the absence of a counterclaim, and because they were not
documents which could be said to be held by the plaintiffs' solicitors to
his order; they were simply documents which Mr Scott's wife had returned to
the plaintiffs before the commencement of any proceedings.

So far as Mr Scott is concerned, the proceedings are not concerned with the
right to possession of the physical documents at all, but rather about his
right to make use of the information which they contain. Even if the
documents could properly be described as equipment necessary for Mr Scott's
use in his vocation, they are not the subject of the present proceedings.
Accordingly, it seems to me impossible to maintain that he has any
continuing interest in the appeals by virtue of subs (2). Even if I were
wrong about that, I would say that I am not at all satisfied that they would
come within the exception.

The problem, of course, is that Mr Scott has not been in possession of or
had access to the documents for the past 12 years. He has carried on his
vocation without possession or use of the documents. It follows that their
possession cannot be properly described as necessary for the vocation which
he was carrying on. Mr Scott told us that he has an interest in obtaining
the documents because he might wish to write a book about counselling
techniques and would find them useful for that purpose. That would not make
them equipment necessary to the carrying on of the vocation of writer.

Mr Scott has told us that he is very concerned to make use of the
intellectual property in the documents, that is to say the information which
they contain and that for this purpose must be regarded as separate
property. But the plaintiffs do not seek to restrain him from making use of
any information which is in his possession. Their claim to injunctive relief
to restrain him from using confidential information has been abandoned, and
Mr Scott does not need to pursue an appeal in order to be able to continue
to make use of such information as he may have obtained during his
membership of the church, or that he may recall from his temporary ownership
of the copy documents 12 years ago. He will remain free to make use of it.

I turn then to Mr Lawley. He has similarly set out a number of different
grounds upon which he claims to be entitled to maintain the appeals or to
resist the plaintiffs' appeals. He says that the documents are part of his
religious beliefs and they are necessary to enable him to carry on his
religious practices. He told us today that some of them contain extracts
from or are copies of his own psychological records. He told us that they
are important to his mental health; and that they are material upon which he
was counselled. He said variously that they are of no value but also that
they are necessary to enable him to carry on his trade or vocation as a
counsellor and a person who runs a helpline. He has also made the point that
they are important in the public interest; that the information they contain
should be made public and brought into the public domain, and he claims that
in 1995-96 he earned £ 705 from carrying on his vocation as a counsellor or
from his helpline of which, as I understand it from his submissions today,
£ 100 or thereabouts was earned in 1995.

Mr Lawley's position is different from Mr Scott's because the copies were in
his possession and prima facie at least belonged to him, since he had made
them before the writ was issued. Possession was only obtained by the
plaintiffs by virtue of a court order, and they are held by the plaintiffs'
solicitors to the order of the person ultimately found to be entitled to
them. Accordingly, if the action had continued and Mr Lawley had succeeded,
he would have obtained a recovery of the documents. So, although like Mr
Scott he did not counterclaim, his case differs from Mr Scott's because he
did not need to.

Most of these grounds which Mr Lawley puts forward on the locus standi issue
are not relevant to it. They might be material if the appeals proceeded.
They might provide grounds upon which the court would intervene to set aside
the order of the judge or the injunction which he imposed, but they have no
relevance at all to the question which we have to decide, which is whether
the right to pursue the appeals or resist the plaintiffs' appeals have
vested exclusively in Mr Lawley's trustee in bankruptcy. Again the only
question is whether the copy documents can properly be described as tools,
books or equipment of Mr Lawley's vocation of running a helpline or a
counselling service.

The evidence on this includes an affidavit from a principal in the
insolvency practice of which the trustee in bankruptcy is a partner. He
deposes to the fact that on 9 January 1996 he conducted an oral examination
of Mr Lawley. In the course of his examination, he inquired about the
history of his business, occupation and source and pattern of earnings. In
his answer Mr Lawley gave no indication that he pursued any business, trade
or vocation other than that of a dentist since the mid-1980s.

There are other grounds for seriously doubting whether Mr Lawley has ever
carried on, or carried on before the date of the bankruptcy order, the
vocation which he claims. He has sworn a large number of affidavits in the
course of the various proceedings, in which he has made a number of comments
which are, it seems to me, inconsistent with his present evidence. In his
affidavit on 2 April 1984, for example, he deposed that:

'All we wanted was a copy of the originals for research, for our archives,
for our research and for slight verification of certain points ...',

and by 1994 he said that he and Mr Scott had:

'... no intention of using upper level materials for any courses whatever.
They are, in our opinion, very harmful ... I do not feel there is any value
in any of it ... It is gobbledegook ...'

On 6 April 1994 he claimed to need the copies to:

' ... protect the public and expose the fraud that has been afflicted on
them.'

He told Judge Sumner on 22 February 1994 that he had no interest in the
documents personally whatsoever. He swore an affidavit in 1984 that:

'... because we know the material so well we can in fact use it and
propagate it without the actual texts',

and in answer to interrogatories he said:

'(1) I have never claimed, and cannot recall any specific times I have
claimed to be able to provide courses based on or including the NOT's
material.

(2) I have never provided courses based on or including the NOT's material.'

It will be remembered that an undertaking was extracted from him that he
would not make use of the copies of documents to be delivered to him for the
purposes of counselling, whether for reward or otherwise. That undertaking
was extracted from him, but he is willing to give an undertaking in similar
terms on the appeal. It seems to me that to volunteer an undertaking not to
use the documents for the purposes of counselling, whether for reward or
otherwise, is difficult to reconcile with his claim that the use of the
documents is necessary for just such a business. I am certainly very far
from satisfied that Mr Lawley's is a bona fide claim to be carrying on a
vocation of counsellor or running a helpline at all. But, assuming for this
purpose that it is, I cannot be satisfied that possession of the copy
documents is necessary for it to be carried on. Again the simple fact is
that Mr Lawley has not had possession or use of the documents in question
for over 12 years, and that any practice which he has carried on during that
time has been without them. I am left to conclude that what he really wants
to do is obtain the information contained in them, and that is a very
different matter.

Accordingly, I have come to the conclusion that, on the evidence before this
court and on the submissions which we have heard, it is not made out in
either case that these documents are within s 283(2). It follows that the
rights to pursue the appeals and to resist the plaintiffs' appeals have
vested in the respective trustees in bankruptcy of the defendants to the
exclusion of those defendants, and I would so declare.

PHILLIPS LJ

I agree.

NEILL LJ

I also agree.

Costs of the trustee for Mr Lawley to come out of the estate; similar
provision in the case of costs of the official receivers acting as the two
trustees of Mr Scott. On any taxation of the plaintiffs' costs, they should
be taxed on the basis that counsel's part in these proceedings was similar
to that of an inter-pleading party and costs should only be taxed on that
assumption; to be drawn to attention of the taxing master if necessary.