June 2008
Part 1 - Bankruptcy – Appeals
The procedure for appeals in insolvency proceedings is outlined in the Civil Procedure Rules 1998 (CPR), Practice Direction on Insolvency Proceedings, part 4. The Practice Direction is applicable to appeals in insolvency proceedings under the Act, the Insolvency Rules, the Administration of Insolvent Estates of Deceased Persons Order 1986, the Insolvent Partnerships Order 1986, the Insolvent Partnerships Order 1994 and the Limited Liability Partnerships Regulations 2001.
6.7 Appeal against a decision of the court
(Amended December 2010)
Any appeal against a decision of the county court or of a High Court registrar lies to a single High Court judge [Note 1]. This is a true appeal, the purpose of which is to consider whether the jurisdiction of the court has been properly exercised, and is not a rehearing [Note 2]. The official receiver should be aware that the permission of the court is required for all appeals in insolvency proceedings, in accordance with Insolvency Rules 1986 rule 7.49A(1) (for post 6 April 2010 petition cases) and Part 52.3 of the CPR as applied by the Rules. This also applies where there is an appeal against a decision of a High Court judge to the Court of Appeal. Permission of the court may only be sought from the court which made the decision or the court which has jurisdiction to hear the appeal.
Due to the updating of advice and guidance in this part, the information previously contained in this paragraph is no longer available.
6.9 Transcript and skeleton argument to accompany appeal notice
The CPR Practice Direction – Insolvency Proceedings, requires the appellant in insolvency proceedings to provide both an approved transcript of the judgment of the lower court, or if not available a suitable record of the judgment as detailed in paragraph 5.12 of the Practice Direction supplementing CPR Part 52 [Note 3], and also a skeleton argument and written chronology [Note 4]. Where it is impracticable for the appellant to file these items with the appeal notice, they must be filed and served on all respondents within 14 days of filing the notice [Note 5].
An appellant who is not represented is not required to file a skeleton argument or a written chronology but is encouraged to do so to assist the court. [Note 6]
6.10 Appeal procedure - notice of appeal
(Amended December 2010)
The appeal procedure is that set out in CPR Part 52 – Appeals and the CPR Practice Direction – Insolvency Proceedings [Note 7]. The appellant must file at the appeal court his/her notice of appeal within such period as directed by the court, or where there is no direction not later than 21 days from the date of the decision of the lower court which the appellant wishes to appeal. The appellant is also required to serve the notice of his/her appeal on all parties directly affected (including the official receiver) as soon as possible, but in any event not later than 7 days after the notice is filed at court [Note 8] [Note 9].
Any request for an extension of time in which to file an appeal notice must be included in the appeal notice, and should include the reason for the delay, and any steps taken prior to the application being made [Note 10]. Time for service can be extended or abridged on application to a High Court judge (the appeal court) [Note 11].
6.11 Appeal procedure - respondent’s notice
Following receipt of the appellant’s notice of appeal, the respondent may file at court a respondent’s notice, not later than 14 days after the date on which the respondent is served with the appellant’s notice, or within such period as may be directed by the lower court. A respondent who wishes to ask the appeal court to uphold the order of the lower court for different or additional reasons to those given by the lower court must file a respondent’s notice.
The respondent’s notice (unless ordered otherwise), must be served on the appellant and any other respondent(s) not later than 7 days after it is filed at court [Note 12].
6.12 Appeal against bankruptcy order
When he/she receives notice of an appeal against a bankruptcy order, the official receiver should only notify Technical Section if he/she requires legal representation at the appeal hearing. The official receiver should normally attend the hearing in case he/she can assist the court, bearing in mind that the appeal is between the bankrupt and the petitioner and, where the appeal is successful, to seek his/her costs of the bankruptcy proceedings to date (see paragraph 6.22). Notice of appeal does not act as a stay of advertisement (see paragraph 6.31) and, where necessary (e.g. where the bankrupt is a trader), the official receiver must remind the bankrupt and/or his/her solicitors of this and continue to take the necessary steps to protect the bankruptcy estate and to act under the bankruptcy order (but see paragraph 6.14).
6.13 Appeal against judgment founding bankruptcy order
A bankrupt cannot pursue an appeal against a judgment debt on which the bankruptcy order was made against him/her [Note 13]. Instead his/her rights of action, except for any rights which are personal to him/her (such as for defamation or assault), vest in the trustee (see Chapter 31.9 concerning rights of action generally). If a bankrupt wishes to contest a decision by the trustee not to pursue an action which has vested in him/her, he/she may apply to the court for a direction that the trustee pursue the matter [Note 14]. In cases where the official receiver is trustee and no insolvency practitioner is willing to be appointed in his/her place, the official receiver is not expected to pursue a bankrupt’s claim unless adequate funds or indemnities can be obtained to meet the costs involved and any adverse costs that may be awarded against him/her as trustee (similar considerations will usually also apply to insolvency practitioner trustees).
When an appeal hearing is pending the official receiver should not routinely seek any order affecting the bankrupt, or requiring him/her to carry out some duty, which might prove to be undesirable or unnecessary if the appeal succeeds (e.g. a public examination [Note 15] or the seizure of property [Note 16]). But in assessing this situation the official receiver must attempt to come to a balanced view as to whether the bankrupt is pursuing a series of largely vexatious or frivolous appeals (perhaps with similar applications) merely to delay the proceedings without offering any co-operation to the official receiver and/or trustee in bankruptcy and/or the estate may be in jeopardy. The directions of the court may be sought as to how, in all the circumstances, the matter ought to proceed. Furthermore, an order under appeal remains valid and in the case of the bankruptcy would leave the disabilities of a bankrupt and the duties of the official receiver unaffected over the period it takes to conclude the appeal. An appeal does not operate as a stay of any order or decision of the lower court, unless the appeal court or lower court orders otherwise [Note 17].
6.15 Oral court hearings where initial application for leave to appeal is refused
Where a bankrupt has applied for permission to appeal which is initially refused on paper, the court may offer the bankrupt an oral court hearing to re-consider his/her application. The official receiver and petitioner may be invited to attend such a hearing to consider the bankrupt’s application for permission to appeal. As at paragraph 6.12, the official receiver may consider attending the hearing in case he/she can assist the court, whilst bearing in mind that the appeal is between the bankrupt and the petitioner. Should permission to appeal be granted by the court and the appeal is subsequently successful, the official receiver should seek his/her costs of the bankruptcy proceedings to date.
If an appeal against a bankruptcy order is successful, it is likely to lead to the annulment of the bankruptcy order by the appellate court [Note 18]. In that event the order made should include provision permitting the vacation of the registration of the bankruptcy petition as a pending action and of the bankruptcy order at the Land Charges Department and a direction regarding the disposal of the deposit on the petition. If either of these matters is overlooked by the court, the official receiver should draw it to the court’s attention. Although an appeal may be successful, there may be instances when the court does not dismiss the petition and it is then relisted for hearing. The registration of the bankruptcy order will be dealt with at the (new) petition hearing. In that event the only matter for the official receiver is the question of his/her costs (see paragraph 6.22). The official receiver should not decline to deal with the issue of his/her costs if he/she believes that another bankruptcy order will be made. The official receiver’s costs should be collected at each stage of the proceedings.
6.17 Recovery of costs on appeal
Where the official receiver has been unsuccessful in recovering costs awarded to him/her on a successful appeal, he/she should provide full details of the costs awarded, together with details of the efforts made to recover the costs, to Technical Section who will then consider whether The Treasury Solicitor should be instructed to seek recovery. Unrecovered costs of an unsuccessful appeal can be met from the bankruptcy estate (although they might be ordered to be paid by the bankrupt or a third party).
6.18 Appeal against decision of Secretary of State or official receiver
(updated October 2013)
An appeal under the Act or Rules against a decision of the Secretary of State or official receiver must be made within 28 days of the notification of the decision (e.g. when acting as creditors’ committee to sanction legal proceedings) [Note 19]. Where an appeal has been lodged, the official receiver should report the full facts to Technical Section and provide a copy of the notice of appeal. Technical Section will consider how the matter should proceed.
An appeal against the official receiver’s decision to reject an objection to the issue of a notice under section 279(2) that an investigation of the conduct and affairs of a bankrupt is unnecessary or concluded must be made within 14 days of the date on form EDOBJ which notified the complainant of the official receiver’s decision [Note 20] [Note 21]. Section 279(2) is not applicable where the bankruptcy order is made on or after 1 October 2013 (see Chapter 22 Part 2).
For further information on appeals/objections against early discharge see Chapter 22 paragraphs 22.17 - 22.18
For further information on the appeals procedure in insolvency proceedings see CPR Practice Direction on Insolvency Proceedings Part 4 www.justice.gov.uk/.../insolvency_pd.htm#IDAZROVB.
6.19 Appeal against decision on proof of debt for meetings purposes
If a creditor is dissatisfied with the chairman’s decision admitting or rejecting his proof of debt for the purpose of his entitlement to vote or in respect of any matters arising under rule 6.93, he/she may apply to the court for the decision to be reversed or varied [Note 22]. If, on appeal, the chairman’s decision is reversed or varied, or a creditor’s vote is declared invalid, the court may order that another meeting be summoned, or make such other order as it thinks just [Note 23]. For cases with petitions on or after 6 April 2010 the Rules state that an application by way of an appeal against a decision of the chairman must be made within 21 days of the date of the meeting [r 6.94(4A)]. Where the chairman is the official receiver, and the petition was presented before 6 April 2010, the appeal period is as set out in paragraph 6.18. Where the chairman is the official receiver as trustee, the provisions of section 303 can be applied which state that if a bankrupt or any of his/her creditors is dissatisfied by any act, omission or decision of a trustee of the bankrupt’s estate, he/she may apply to the court and, on such application, the court may confirm, reverse or modify any act or decision of the trustee, may give him/her directions or may make such other order as it thinks fit.
6.20 Appeal against a decision on proof of debt for dividend purposes
If a creditor is dissatisfied with the trustee’s decision with respect to his/her proof of debt (including any decision on the question of preferential status), he/she may apply to the court for the decision to be reversed or varied [Note 24]. The application must be made within 21 days of his/her receiving the written statement from the trustee of his/her decision to reject a proof for dividend purposes either in whole or in part (form PRFFU) [Note 24] [Note 25]. The bankrupt or any other creditor, if dissatisfied with the trustee’s decision admitting or rejecting the whole or any part of a proof, may also make such an application within 21 days of becoming aware of the trustee’s decision [Note 26].
6.21 Appeal by Secretary of State
The Secretary of State may appeal against any order of the court made on an application to rescind or annul a bankruptcy order or for a bankrupt’s discharge [Note 27]. Where the official receiver considers that an appeal should be lodged, he/she should report the facts to Technical Section for consideration (see also Chapter 19 part 4 and paragraph 6.8 regarding permission to appeal).
6.22 Payment of fees - successful appeal
The Enterprise Act 2002 introduced a modernised financial regime. The calculation and treatment of fees is dependent on the date of the bankruptcy order.
(a) Bankruptcy order made before 1 April 2004
The official receiver’s costs in respect of an appeal are calculated on the same basis as annulment costs (see paragraph 6A.68). Disbursements should be charged to the individual estate and sent to Estate Accounts Services (EAS) for payment. See Chapter 36 Part 1 for further information on fees and disbursements payable.
(b) Bankruptcy order made on or after 1 April 2004
The full administration fee (fee B1) should only be charged when it can reasonably be said that the official receiver has undertaken material work on a case. The full administration fee should not be charged where, for example, the official receiver has not issued initial notices or committed other expenditure in the case. Where the full administration fee is not justified, a reduced administration fee could be charged with sanction of the court. The reduced administration fee could range between £0 and £1,715 (i.e. the full bankruptcy administration fee level) according to the circumstances of the case. The official receiver should calculate the administration fee to be charged and seek payment of that sum, requesting that the court orders the permitted level of administration fee to be reduced to the level calculated. The administration fee in the case of a successful appeal should be calculated by multiplying the time the official receiver and his/her staff have spent undertaking work by the hourly rates set out in the Insolvency (Amendment) Regulations 2004 and adding to this the centrally paid disbursements (advertising costs, gazette, travel and subsistence) (see Chapter 36 Annex E) The time and rate calculation should exclude VAT in this instance as it is being used as a guide where the administration fee is not chargeable to its full extent. The amount charged should not exceed the full administration fee (B1) of £1,715 (as at June 2008) [Note 28]. The administration fee does not include the cost of any disbursements associated with the realisation of assets or the distribution of funds to creditors, these should be charged separately.
The amount of the maximum administration fee chargeable is regularly re-assessed. It is advisable to check for the relevant figure to use, dependent on the date of the bankruptcy order.
6.23 Bankruptcy Order annulled and petition dismissed
Where the bankruptcy order is annulled and the petition dismissed, the deposit shall be repaid to the extent that it is not required for payment of the relevant administration fee (unless a fee has become payable to an insolvency practitioner appointed under section 273) or unless the court orders otherwise, perhaps following an agreement between the parties. See Chapter 36 Part 1 for more information on fees and disbursements.
6.24 Bankruptcy Order annulled and petition not dismissed
If the petition is not dismissed but is to be re-listed for hearing then the official receiver should ensure that the deposit is not included in the payment of the annulment costs. After the payment of the costs the deposit should be retained and transferred to the new deposit suspense account. For more information concerning bankruptcy annulments see paragraph 6A.8 regarding treatment of the petition and deposit.
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