Bankruptcy orders—to rescind or to annul? (Yang v Official Receiver and others)

Bankruptcy orders—to rescind or to annul? (Yang v Official Receiver and others)

Karen Troy, barrister at Exchange Chambers in Manchester, and who acted in the case, explains the implications of the Court of Appeal’s decision in Yang v Official Receiver and others.

Original news

Yang v Official Receiver and others [2017] EWCA Civ 1465, [2017] All ER (D) 65 (Oct)

The subsequent setting aside of council tax liability orders was not a ground for the annulment of a bankruptcy order made in respect of the appellant. So ruled the Court of Appeal, Civil Division, in dismissing the applicant's appeal against a judge's order upholding a district judge's decision by which he had dismissed her application to annul a bankruptcy order. That order had been made on a petition by the second respondent local authority. The appellant had argued that the bankruptcy order should be annulled because, while the liability orders had been extant at the time of the bankruptcy order, they had subsequently been set aside.

The Court of Appeal held, among other things, that the lower courts had correctly concluded that the statutory demand relating to the liability orders had properly been served. Further, it held that the only sensible interpretation of section 282(1)(a) of the Insolvency Act 1986 (IA 1986) was that regulation 49(1) of the Council Tax (Administration and Enforcement) Regulations 1992, SI 1992/613 (CTR 1992), deemed the liability orders to constitute a legally enforceable debt, regardless of the underlying factual position relating to the relevant property, unless and until those orders were set aside, under the specific statutory procedure laid down for doing so.

The court ruled that a bankruptcy court should not go behind liability orders, except in the event of fraud or some miscarriage of justice and held that, since the liability orders in the present case had not been set aside at the date that the bankruptcy order had been made, the effect of CTR 1992, reg 49(1), was, statutorily, to deem them as constituting a legally enforceable debt from the

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.