Are Income Payment Agreements and Income Payment Orders mutually exclusive?

Are Income Payment Agreements and Income Payment Orders mutually exclusive?

Frances Coulson, a partner at Moon Beaver, examines the decision in Re Edmondson where the bankrupt entered an income payment agreement and the court had to decide whether the trustee could obtain a further income payment order.

Original news

Re Edmondson Thomas and another (joint trustees in bankruptcy of Stephen John Edmondson) v Edmondson [2014] All ER (D) 96 (May), [2014] EWHC 1494 (Ch)

The Chancery Division held that, on the true construction of s 310 of the Insolvency Act 1986, the fact that an income payments agreement (IPA) had been made in respect of a bankrupt, did not mean that a court had no jurisdiction to grant an income payments order (IPO) under the Act.

What issue did this case raise?

The bankrupt had entered into a five month nil tax only IPA with the Official Receiver. One issue which did not seem to give rise to any problem was that this IPA was entered into by the Official Receiver one day after bankruptcy trustees had been appointed. The Trustees then sought an IPO of some £10,000 per month for three years from the date of the order.

The bankrupt argued that under the Insolvency Act 1986, the section 310 (the order route) and section 310A (the agreement route) were mutually exclusive. It was not possible to have both he said.

The District Judge considered they were not entitled to an order in addition t

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About the author:

Frances gained her LLB (Hons) at Kings’ College, London University in 1983. She then attended Chester College of Law to take what were then the Solicitors’ Final Examinations. She has been at Moon Beever since 1984 where she trained, qualifying in 1986, and a partner since 1988 becoming Managing Partner in 2000. She is also a founder partner of ShawnCoulson, an international association, of which Moon Beever is the London office. She is Head of Insolvency and Business Recovery at Moon Beever running a substantial team of insolvency specialists. She undertakes most areas of personal and corporate insolvency, specialising in contentious insolvency especially cases involving fraud, as well as provisional liquidations and injunctive work generally.

She is Chairman of the Appeal Committee at ACCA and a member of the Insolvency Law Evaluation Panel at the Insolvency Service, and CBI Insolvency Panel as well as a member of Insol, and the IBA and, veering towards the personal, of the NFU, and the Carlton Club.

Frances is a regular speaker in the UK and abroad on insolvency and practice management.

Frances was formerly Chairman of the SPG Committee of R3, the Insolvency trade body representing 97% of licensed insolvency practitioners. She is President of R3 for 2011-2012, and remains a member of its R3 Policy Group.

She is interested in all things equestrian as are her three daughters and her husband, and spends her free time (such as it is) with her family and other animals, riding and trying to improve her strokes at Real Tennis.