Registrar Baister looks at what circumstances justify a s 313 charge on a bankrupt's home as an alternative to realising the property

Registrar Baister looks at what circumstances justify a s 313 charge on a bankrupt's home as an alternative to realising the property

On 8 April 2014, Chief Registrar Baister gave judgment in the case of Neale v Parkins  [2014] Lexis Citation 47 , where the court looked at the circumstances which would justify an application being made under IA 1986, s 313 (placing a charge on a bankrupt's home) due to an inability to be able to apply to realise the trustee's interest in the property by way of application for possession and sale.

What happened in the case?

A bankruptcy order was made against Parkins on 13 October 2010 following a petition presented by the Commissioners for Her Majesty’s Revenue and Customs (HMRC). Shortly after the bankruptcy order was made, Parkins made an application seeking to annul the bankruptcy order and that application was, following a full hearing, dismissed.

In October 2013, Parkins' trustee in bankruptcy (Neale) made an application to court seeking a charge under IA 1986, s 313 over Parkins' property. The application was adjourned so the court could consider why that application was being made, as such applications are only made where there is an inability for the trustee to realise his interest in some other way (typically by way of an order for possession and sale). The court needed to consider the scope of IA 1986, s 313 which provides where the property:

'...is comprised in the bankrupt’s estate and the trustee is, for any reason, unable for the time being to realise that property, the trustee may apply to the court f

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