Too late to annul a bankruptcy order? (Taylor v The MacDonald Partnership)

Too late to annul a bankruptcy order? (Taylor v The MacDonald Partnership)

In Taylor v The MacDonald Partnership and others, Lord Justice Kitchen had to decide whether to grant permission for a second appeal to be brought in respect of a discharged bankrupt’s failed application to have her bankruptcy annulled.

Original news

Taylor v The MacDonald Partnership and others [2015] EWCA Civ 921

Briefly, what were the facts of the case?

Mr and Mrs Taylor were said to have been in partnership together. The partnership got into financial difficulties. Individual voluntary arrangements (IVAs) were proposed by both Mr and Mrs Taylor, and these were approved by creditors in January 1996.

About four years after Mrs Taylor’s IVA had been approved, the supervisor of her IVA petitioned for her bankruptcy due to Mrs Taylor being in breach of her IVA obligations. However, the terms of the IVA provided that the supervisor should not present any bankruptcy petition unless that had first been agreed upon by a meeting of creditors—no such meeting had taken place in this case.

Mrs Taylor was subsequently adjudged bankrupt, and discharged from her bankruptcy three years later.

Nine years after discharge, Mrs Taylor applied to annul her bankruptcy under section 282(1)(a) of the Insolvency Act 1986 (IA 1986) on the basis that the bankruptcy order ought not to have been made, relying upon a number of grounds. That application was dismissed—the district judge did not consider that any of the grounds had any substance, including that the supervisor did not have standing to present the bankruptcy petition as no meeting of creditors had been held. Mrs Taylor appealed.

The appeal was heard by His Honour Judge Hodge QC sitting as a Judge of the High Court. Judge Hodge found that the district judge had fallen in error in failing to have regard to the fact that no meeting of creditors had taken place. However, the district judge had said that, even if he had

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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.