Interests of a bankrupt’s creditors remain of paramount importance (Pickard and another (Joint Trustees in Bankruptcy of Constable) v Constable)

Interests of a bankrupt’s creditors remain of paramount importance (Pickard and another (Joint Trustees in Bankruptcy of Constable) v Constable)

Lina Mattsson, barrister at Hardwicke, outlines the recent restructuring and insolvency case, Pickard and another (Joint Trustees in Bankruptcy of Constable) v Constable. She explains that this appeal reaffirms that even in situations with exceptional circumstances, the interests of a bankrupt’s creditors remain of paramount importance and that cogent evidence is crucial to support any application to suspend possession.

Original news

Pickard and another (Joint Trustees in Bankruptcy of Constable) v Constable [2017] EWHC 2475 (Ch), All ER (D) 99 (Oct)

A district judge had failed properly to consider the alternative of a shorter period of suspension on the sale and possession of a house in which the bankrupt had a 50% interest, and which she shared with her husband (who was in his 60s and had a health condition). The district judge had ordered that the sale of the property be postponed until the death of, or earlier permanent vacation of the property by, the husband, with a parallel postponement of the order for possession. However, there was no evidence which justified the district judge's conclusion and findings and, taking the evidence as a whole, it did not pass the threshold necessary to justify a postponement of the length which the district judge had ordered. Accordingly, the district judge's decision could not stand. The Companies Court so ruled in allowing an appeal by the trustees in bankruptcy of the wife (the trustees), who sought to enforce the orders for possession and sale that had been granted. The court ruled that those orders would be postponed until 12 months.

What practical lessons can those advising take away from this appeal?

The lesson to be learnt from Pickard v Constable is the importance of cogent and detailed evidence in support of any application to suspend possession. Relevant evidence includes:

  • medical evidence as to the effect of any medical condition of the applicant, any effect that an eviction would have on the applicant’s health (particularly

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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.