Discharge from bankruptcy—co-operation must be real (Keely v Bell)

Discharge from bankruptcy—co-operation must be real (Keely v Bell)

In what circumstances will a court discharge an individual’s discharge from bankruptcy, and what level of co-operation is a bankrupt expected to provide to his trustee inbankruptcy? Anna Metcalfe, barrister at St Philips Chambers, considers the appeal decision inKeely v Bell.

Original news

Keely v Bell [2016] EWHC 308 (Ch), [2016] All ER (D) 191 (Feb)

The Chancery Division dismissed the appellant's appeal against an order that his discharge from bankruptcy be suspended for 12 months. Even if one removed from consideration the failure to co-operate inthe provision of particular bank statements, a 12-month suspension was entirely appropriate looking at the appellant's breaches of obligation inthe round.

What was the background to the appeal?

Mr Keely was made bankrupt on 4 July 2014 as a result of a number of costs orders made against him inunderlying probate proceedings.

The trustee inbankruptcy (trustee), Mr Bell, applied on 30 June 2015 to postpone Mr Keely’s discharge from bankruptcy pursuant to section 279 of the Insolvency Act 1986 (IA 1986) on the basis that Mr Keely had failed to comply with a number of the obligations imposed upon him. As a result, the administration of Mr Keely’s bankruptcy estate was far from completion. Mr Keely opposed the application on the basis that he had fully complied with his obligations.

Following an interim order postponing discharge until a substantive hearing, the matter was eventually heard on 16 October 2015 before District Judge Bever inthe County Court hearing centre at Manchester. The district judge found that Mr Keely had failed inhis obligations insix respects:

  • he failed to give notice of an increase inhis income as required by IA 1986, s 333(2) nor had he provided records of employment
  • he failed to disclose the existence of a bank account to Mr Bell, inbreach of IA 1986,

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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.