Suspension of discharge from bankruptcy (Weir (as trustee in bankruptcy of Claire Elisabeth Hilsdon) v Hilsdon)

Suspension of discharge from bankruptcy (Weir (as trustee in bankruptcy of Claire Elisabeth Hilsdon) v Hilsdon)

Richard Ascroft, barrister at Guildhall Chambers, discusses the case of Weir (as trustee in bankruptcy of Claire Elisabeth Hilsdon) v Hilsdon, which provides a worthwhile clarification on the suspension of discharge from bankruptcy.

Original news

Weir (as trustee in bankruptcy of Claire Elisabeth Hilsdon) v Hilsdon [2017] EWHC 983 (Ch), [2017] All ER (D) 33 (May)

The Chancery Division allowed, on one ground only, a bankrupt’s appeal against a district judge's order, suspending her discharge from bankruptcy until her trustee in bankruptcy confirmed to the court that she had complied with her duties. The court held, among other things, that a suspension of the discharge until the trustee confirmed to the court that the bankrupt had complied with his duties and obligations, or until the court otherwise ordered, satisfied the statutory requirement that the suspension be until the fulfilment of a specified condition. Accordingly, such an order was not always wrong in principle. However, the court held that, in the present case, the district judge's decision to impose an order in the form that he had was flawed for the failure to take into account the range of orders that could have been made, under s 279(3) of the Insolvency Act 1986 (IA 1986), and for the failure to consider whether the bankrupt’s failings had really justified an order in that form. The order was set aside and replaced with one imposing a fixed period of six months.

What was the background to the appeal?

On 9 February 2016 District Judge Payne (sitting in the County Court at Oxford) made an order suspending Mrs Hilsdon’s otherwise automatic discharge from bankruptcy in response to an admitted failure by her to comply with her statutory obligations under IA 1986. The order was expressed as follows:

‘The relevant period for the purposes of section 279 of IA 1986 and Schedule 19 to the Enterprise Act 2002 (EnA 2002) shall cease to run until such time as

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