Part 2 Dealing with the court and checking the bankruptcy order
From 6 April 2011 some of the responsibilities of the High Court of Justice bankruptcy court have been transferred to Central London County Court. The Central London County Court can now deal with creditor’s petitions below the value of £50,000 and debtor’s petitions below £100,000.
The court should send at least two sealed copies of the bankruptcy order to the official receiver in both creditor and debtor petition cases [Note 1].
A local court should notify the official receiver when a bankruptcy order is made. The notification may be by secure email, fax or by post. The official receiver is able to monitor the progress of bankruptcy petitions by using the Case Pending Hearing Search tab in ISCIS which can be found under the Case tab. The Petitions and Transfers Team will notify the local official receiver where a bankruptcy order is made in the High Court and where a bankruptcy order is made in the Central London County Court on a creditor’s petition. The Central London County Court will notify the local official receiver where a bankruptcy order is made on the debtor’s own petition.
The official receiver must send one copy of the sealed bankruptcy order to the bankrupt as soon as reasonably practicable [Note 2]. The official receiver must keep a note of how he/she served the bankruptcy order, normally by endorsing the file copy.
The court will notify the official receiver of a new bankruptcy order via a secure email. The email will include the title of the proceedings, the full bankrupt’s description, the name of any trustee appointed, the bankrupt’s contact details and an electronic copy of the bankruptcy order. The court, having provided an electronic copy of the order, may only send one sealed copy to the official receiver.
The court on the making of a bankruptcy order on a debtor’s petition will usually hand a sealed copy of the order to the bankrupt. The official receiver need not send a sealed copy of the order to the bankrupt where he/she is satisfied that a copy has already been served. Where the official receiver is not satisfied the bankrupt has received a sealed copy of the bankruptcy order he/she should send a copy to him/her as soon as reasonably practicable [Note 3]. If the official receiver sends a copy of the bankruptcy order to the bankrupt he/she must keep a note of how it was served, normally by endorsing the file copy.
To present a bankruptcy petition a debtor must be:
A debtor who is unable to attend court on the day of the hearing may be represented by a solicitor or by Counsel. Any other person, may at the discretion of the court, be granted a right of audience to speak to the court on behalf of the debtor. This discretion includes any person holding a power of attorney. Whilst it is the within the court’s discretion to hear any person other than the debtor or his/her legal representative it is a discretion that should only be used in exceptional circumstances [Note 5]. The court has the discretion to hear a petition from an absent debtor and subsequently to make a bankruptcy order.
It has been held “that a party cannot carry out by an attorney some act the competency to do which arises by virtue of some duty of a personal nature requiring skill or discretion for its exercise” [Note 6]. To present a bankruptcy petition the petition and the statement of affairs must be sworn by the debtor.
Where the official receiver believes a bankruptcy order has been made where the petition and statement of affairs have been completed and lodged by a person acting for the bankrupt under a power of attorney the official receiver should make an application to the court to annul the order. If the debtor lacks capacity to manage their affairs and, in particular, is unable to swear the petition and statement of affairs the person holding the power of attorney should apply to the court for an order appointing him/her as the incapacitated person’s representative [Note 7].
The court clerk will ensure that the debtor has answered every question in the statement of affairs. This does not mean that the court clerk will check the contents of the statement of affairs, for example, ensuring all the creditors’ addresses and references have been fully completed. The court clerk’s responsibility is only to ensure that the statement of affairs contains sufficient information to allow the Registrar or District Judge to consider and make a decision on the debtor’s petition.
For the reasons shown in paragraph 4.24 the official receiver may receive an incomplete statement of affairs from the court. In this instance the official receiver could consider asking the bankrupt to complete a further statement of affairs. The statement of affairs, form 6.28 is available here.
The petition must contain sufficient information about the debtor to enable him/her to be correctly identified [Note 8]. The petition shall include the following:
The above details are referred to as the full title of the proceedings [Note 9].
There may be circumstances where the disclosure or continuing disclosure to other persons (whether to the public generally or to specific persons) of the bankrupt’s current address or whereabouts might lead to violence against the bankrupt or a family member who resides with him/her. The court may, on the application of the bankrupt, the official receiver, the trustee or the Secretary of State, order that his/her current address be withheld from specified documents and public sources of information [Note 10]. The bankrupt’s “current address” means his/her current place of residence and any address at which he/she carries on business [Note 11].
An application to court by any of the parties mentioned in paragraph 4.27 to restrict the publication of a bankrupt’s “current address” must be accompanied by a witness statement referring to rule 6.235B. The witness statement should contain sufficient evidence to satisfy the court that the bankrupt, or his/her family member, would be at risk of violence or harm should his/her “current address” be disclosed [Note 12].
Where the court accepts that a bankrupt, or a family member, may be at risk from violence it may order one or more of the following, that:
Where the court makes an order on grounds 2 to 6 listed in paragraph 4.29 it may made additional orders. The court may order that a previous residential and/or trading address be included in the description in the bankruptcy order; be included in the full title of the proceedings; be included in the contents of any gazette notice or advertisement; or be kept on or be entered onto the individual insolvency register [Note 14].
The official receiver must ensure that immediate action is taken to comply with the terms of any court order made e.g. updating the ISCIS ‘Case Header’ tab to show ‘address withheld’ as this links to the Individual Insolvency Register (see paragraph 4.73). The official receiver should ensure when issuing any bankruptcy restriction proceedings that the application complies with the court order and that, if applicable, the current address does not appear on the bankruptcy restrictions register if an undertaking is given or an order made. In appropriate cases the attention of the Authorisations Team Bankruptcy should be drawn to the court order restricting disclosure of the “current address” when reporting the result of a bankruptcy restrictions hearing or a bankrupt’s consent to a bankruptcy restrictions undertaking.
Where the court has made an order to amend the title of the proceedings the official receiver must immediately send notice of the order to the Chief Land Registrar who will amend his/her register, where appropriate. The official receiver has the discretion either to gazette, or to gazette and advertise, the court order [Note 15]. Any notice, gazette or advertisement should contain the standard contents with the exception of the bankrupt’s current address. The amended title of the proceedings and the date of the bankruptcy order should be included. The notice should not include the description under which the proceedings were previously published [Note 16].
When checking the bankruptcy order the official receiver may discover that the court has made an error when compared to the details on the petition, for example, an incorrect spelling of bankrupt’s name. The official receiver should contact the court and ask for the order to be corrected under the slip rule, and an amended version issued. The Civil Procedure Rules allow the court, at any time, to correct an accidental slip or omission in a judgment or order. A party, for example, the bankrupt, the official receiver or a petitioning creditor’s solicitors, may apply for a correction without notice [Note 17]. The court has the general power to rectify matters where there has been an error of civil procedure [Note 18].
Where the information is incorrect or is insufficient to enable creditors to identify the bankrupt. For example, the description may be missing trading addresses or trading styles, or may be incomplete because the bankrupt has used multiple aliases [Note 19], the official receiver should apply to the court to amend the title of the proceedings, commonly referred to as amending the description [Note 20]. There is no fee payable to the court where the official receiver makes the application to amend the description as himself/herself rather than as trustee in bankruptcy.
The official receiver should take into account the following specific matters when deciding whether to make an application to amend the title of proceedings:
The official receiver has the discretion to gazette and/or advertise the amended description where the petition was presented on or after 6 April 2009 [Note 22]. In deciding whether to advertise the amended description the official receiver should balance the benefit to the administration of the case against the cost of the gazette and advert. Paragraph 5.41 explains the circumstances where advertising the amended description may be appropriate. Further general information on the discretionary publication of insolvency information on or after 6 April 2009 can be found in Part 3 of Chapter 5.
Where the petition was presented before 6 April 2009 the official receiver would have to make an application to the court to enable the amended description to be gazetted and/or advertised. In making a decision to apply to the court to gazette and/or advertise the amended description the official receiver should balance the benefit to the administration of the case against the cost of the gazette and advert. Annex 1 of Chapter 5 provides further general guidance on the publication of insolvency information in the Gazette in cases where the petition was presented before 6 April 2009. Annex 2 of Chapter 5 provides similar guidance in relation to advertising.
It is usual that where a transfer of the bankruptcy proceedings to another court is imminent that any application for an amended description will be made by the recipient official receiver. However the official receiver may consider combining the transfer application with an application to amend the description. Where the official receiver makes such an application he/she will responsible for sending notice to the Land registry, gazetting and/or advertising the amended description. Paragraph 4.36 provides guidance on when to gazette and/or advertise the amended description. See Chapter 7 for further information on the transfer of proceedings.
It is possible that two or more bankruptcy petitions are presented against the same debtor. The petitions may be presented in different courts. If the orders are made the official receiver should make an application to the court for an order consolidating the proceedings. Where the orders have been made in different courts the official receiver may consider waiting until the proceedings have been transferred into the local court before making the application. The application should, generally, include a request that the proceedings are consolidated under the distinctive court number of the earliest bankruptcy order and that the petition deposits are retained by the official receiver to set against the costs and fees incurred. The subsequent bankruptcy orders and proceedings will be merged into the first order and care should be taken that the application requests that the court provide for this in the order. In considering the official receiver’s application the court may make an order on such terms as it thinks fit [Note 23]. If the court does not consolidate the orders on the above terms an application to annul the second bankruptcy order should be made.
Where two or more bankruptcy orders are made against the same person they should be consolidated under the court number of the earliest bankruptcy order. The official receiver should not record any further information on ISCIS for the subsequent order(s). Further ISCIS guidance on consolidation will be issued on the ORBS area of the Intranet in due course.