The need for care when dealing with vulnerable persons in bankruptcy—Brister v The Official Receiver

The need for care when dealing with vulnerable persons in bankruptcy—Brister v The Official Receiver

In Brister v The Official Receiver, the county court was asked to annul a bankruptcy order on the basis that it would not have been made had the court known of the mental and physical condition of the debtor.

Original news

Brister v The Official Receiver [2015] Lexis Citation 161

The applicant personal representative sought to annul a bankruptcy order made against the deceased person (Mr Brister), arguing that the order would not have been made had the court known of Mr Brister’s mental capacity prior to his death.

The county court made the annulment order. The petitioning creditor was aware from its process server that Mr Brister was suffering from dementia. The court was not aware of this background when it made the bankruptcy order—if it had been made aware, the bankruptcy order would not have been made. Further, it was right for the deputy district judge to exercise his discretion in making the annulment order when there was a genuine argument on the evidence before him that the petition debt was disputed. It could not be said there was no point in annulling the bankruptcy order, as it did not automatically follow that a new bankruptcy order would be made.

Briefly, what were the facts of the case?

Mr Brister entered into three fixed-sum loan agreements in 2010 in relation to new windows at his property. Until August 2012, payments were apparently made under the agreements. Following cessation of the payments, the finance company’s solicitors sent a letter before action to Mr Brister, and thereafter served a statutory demand on him. The process server reported back to the finance company’s solicitors that Mr Brister was in his eighties, could hardly see or stand, and looked very unwell.

The finance company subsequently issued a bankruptcy petition against Mr Brister. Following service of the petition, the process server again reported back to the finance company’s solicitors stating

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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.