Conduct meriting a bankruptcy restrictions order (Official Receiver v Baxendale-Walker)

Conduct meriting a bankruptcy restrictions order (Official Receiver v Baxendale-Walker)  

Four allegations of a bankrupt’s failure to co-operate with the official receiver (OR) were held to be proven and of sufficient seriousness to merit the making of a bankruptcy restrictions order (BRO). The case sheds light on the kind of conduct required for a BRO to be made, and what actions might be considered an effort to frustrate the administration of a bankruptcy estate.

Written by Daniel Webb, barrister, at Selborne Chambers.

Official Receiver v Baxendale-Walker [2020] EWHC 195 (Ch)

What are the practical implications of this case?

The case is an example of the court considering allegations of a bankrupt’s failure to co-operate with their trustees in bankruptcy and determining that a BRO was merited. The jurisdiction can be found in paragraph 1 of Schedule 4A to the Insolvency Act 1986 (IA 1986). IA 1986, Sch 4A, para 2(2) sets out the kinds of behaviour of which the court should take particular account, but Insolvency and Companies Court Judge Mullen noted in this case that the list is not exhaustive. The list includes failing to co-operate with the OR or trustee in bankruptcy but does not give further detail of what that might include.

The allegations proven in this case show how serious the failure to co-operate will be to merit the BRO. The judge stated that the bankrupt’s failure to disclose the extent of his assets and deliver up electronic devices was not mere inadvertence or misunderstanding. Since they were part of an effort to frustrate the administration of his estate, they merited a BRO.

It is important to note that the bankrupt did not file evidence and the matter proceeded as an uncontested disposal. That is, the bankrupt was limited to submissions on the law and the OR’s evidence. In that context, the court regarded allegations of nominee arrangements and loans with suspicion, and ultimately found them to be unproven.

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About the author:

Zahra started working as a paralegal at Lexis Nexis in Banking and Insolvency teams in April 2019. Zahra graduated with a 2.1 honours in a BA French and Spanish, completed the GDL at BPP University and is seeking some experience before commencing the LPC. She has undertaken voluntary work for law firms in London, Argentina and Colombia.