A bankrupt subject to the automatic discharge provisions cannot apply to the court for discharge.
The following guidance applies only in the following circumstances;
(see Annex 1 for further guidance on the transitional provisions of the Enterprise Act 2002)
1 Where the automatic discharge provisions do not apply, the bankrupt may obtain his discharge by applying to the court, but he cannot do so until the expiration of five years from the making of the bankruptcy order. No view must be expressed to the bankrupt or any adviser on the likelihood or success of an application for discharge or of the attitude the official receiver is likely to take.
Note: [s.280(1); R6.217(1)]
Note: [s289(3); R6.218(1)]
4 The report should also contain any other information which the official receiver feels should be brought to the court’s attention. Subject to the following, unless there are matters equivalent to those which would, in the case of an automatic discharge, lead the official receiver to apply for its suspension, he/she should not seek to persuade the court to refuse the discharge. In the High Court, London a Registrar has expressed the view that were the bankrupt to have obtained credit whilst undischarged or to have acted as a company director without permission, such matters should be reported to the court by the official receiver on all applications for discharge as breaches of a negative obligation (i.e. not to do something) on the bankrupt’s part. It remains to be seen whether this view will be accepted by other courts.
Information from trustee
6 The evidence on which the report is based need not, as a rule, be quoted at length. Brevity and lucidity are essential, and comments, arguments and expansion into detail which add little or nothing to the basic facts should be avoided.
Copies of report
7 A copy of any report to creditors made by the official receiver in current or previous bankruptcy proceedings may be exhibited to the report to avoid the unnecessary repetition of detail. If a public examination has been held, relevant extracts from the written record of the examination may be quoted or referred to by the question and answer numbers.
Note: [R6.73] [s290]
8 If there has been non co-operation, a mere statement that a bankrupt has not complied with any provision of the Act or the Rules is not enough. The only proper evidence is a statement of the facts or information on which the official receiver relies. If a point depends on the legal effect of a document, the material part of the document should be set out in the report, and the document, or a copy of it, should be at hand for production if required.
Report prima facie evidence
10 The official receiver’s report is prima facie evidence of the facts stated in it. He/she should not make any allegations against the bankrupt unless he/she is satisfied that they are justified. Where the contents of the report are based on information provided by the trustee, the official receiver must make this clear. The same applies to all opinions given by, and facts ascertained from, third parties.
Evidence of creditors, etc
11 If the official receiver includes in his/her report matters in addition to the basic requirements of Rule 6.218(1(a)-(d) and his/her comments are based on information received from creditors or others, he/she must, before adopting any of it for the report, satisfy himself/herself as to its truth. If the matters concerned are particularly contentious, the official receiver should consider having the evidence of the parties taken on oath and filed in court, or be able to support his/her statements by other evidence.
Notes of private examination
12 The notes of section 366 examinations of other persons cannot be used against a bankrupt on his/her application for discharge but information obtained at such an examination may be separately verified by the examinee, or, alternatively or additionally, inquiries may be made of the bankrupt, and a statement taken from him/her, in relation to such matters.
Conclusions of report
13 If the official receiver has no reason to believe that the bankrupt’s conduct has been such as to justify the court’s refusing, suspending or qualifying an order for his/her discharge, he/she should expressly say so in his/her report but he/she should not make any recommendation as to the terms of the order to be made.
Notice to trustee
14 The court will give the official receiver at least 42 days notice of the time, date and place appointed for hearing the application and the official receiver must give at least 14 days notice of it to any trustee. In partnership cases notice to the trustee is required in respect of each applicant.
Note: [R6.217(2)] [R6.217(3) and (4)]
Notice to creditors
Note: [R6.217(3) and (4)
Filing of report
16 The official receiver must file his/her report in court not less than 21 days before the hearing. He must also send a copy of it to the bankrupt and the trustee not less than 14 days before the hearing.
Note: [R6.218(1) and (2) ] [forms DSA and DSNOT]
Delay in filing report
17 If for any reason the report is not filed in time, the official receiver should point this out to the court and consent to a reasonable adjournment if one is requested. Where an adjournment or an appeal is caused by failure on the part of the official receiver to file the report in time, the court may order the costs occasioned by that failure to be paid out of the estate; no costs can fall personally on the official receiver.
Challenge by bankrupt
18 Form DSNOT advises the bankrupt of the procedure to be adopted where he/she wishes to dispute statements in the report. If he/she wishes to do so, the bankrupt must file in court a notice specifying the statements proposed to be challenged. The notice must be filed not less than 7 days before the hearing and the bankrupt must, not less than 4 days before the hearing, serve a copy of the notice on the official receiver and any trustee.
Note: [Form 6.75] [R6.218(3)]
19 The official receiver’s report should be as complete as possible but if, after the report is lodged, further facts come to light, he/she should submit a further report, copies of which should be sent to the bankrupt and the trustee. The further report should indicate the reason for its submission and at the hearing the official receiver should, if the further report was sent to the bankrupt only a short time before the hearing, ask the court to consider whether the hearing should be adjourned to enable the bankrupt, if he/she wishes to do so, to have more time to consider the information contained in it.
Hearing of application
Attendance of bankrupt
21 Since the Act and Rules do not specifically require the attendance of the bankrupt on the application the court appears to be able to proceed in his/her absence if it wishes. Normally the court will not proceed unless the bankrupt is present or represented.
Attendance of official receiver
22 The official receiver should always be present or adequately represented in court at the hearing of the application. His/her report, or at least a substantial portion of it, may be read publicly either by the court or, if so directed by the court, by the official receiver. The court may hear oral representations by the official receiver (and the trustee and any creditor) in addition to considering the report.
23 The official receiver should make representations on any new aspects of the case which may have been imported into it at the hearing by the bankrupt or his/her advocate and, if he/she thinks it necessary or expedient, in defence of any part of his/her report which may have been criticised.
24 When the official receiver has reported matters which, if proved, would normally lead to a refusal or qualification of the bankrupt’s discharge, and an attempt is made at the hearing of the application to dispute the official receiver’s statements, he/she should satisfy himself/herself by cross-examination of the bankrupt that the evidence given is reliable. If he/she is unable to do so, or requires further information in order to form a proper conclusion, he/she should apply for an adjournment with a view to making further inquiries. If necessary, he/she should make a further report embodying the results of such inquiries.
Terms of discharge order
26 The court has discretion to grant an absolute order of discharge or to refuse an order, or to grant an order of discharge subject to certain conditions. While the official receiver’s report itself should not, as mentioned in paragraph 13, suggest in any way the terms on which the discharge should be granted, the official receiver may, if invited by the court to do so, be able to indicate a form of conditional order (beneficial to the creditors).
Note: [s280(2);R6.219(1)][Form 6.76]
Note: [Form 6.76]
Present circumstances of bankrupt
28 The hearing of the application gives an opportunity to examine the bankrupt as to his/her means of livelihood at the time and his/her prospects and expectations in the future, if the information has not already been furnished.
General adjournment to be avoided
Compliance with order
30 Where the court makes an order under section 280(2)(c) (with conditions) the official receiver must ensure strict compliance by the bankrupt with any duty to provide information about his/her earnings, after-acquired property and income and, if requested, to file in court a statement of truth giving particulars of any relevant details, liaising with any insolvency practitioner trustee. When a bankrupt’s discharge is granted subject to conditions as to property or income acquired after the discharge, the official receiver, where he/she is trustee should ensure compliance with the requirements of the order.
31 If the bankrupt defaults, the official receiver should require his/her attendance to explain and perhaps remedy his/her default before any application is made to the court. The official receiver may require the co-operation of the bankrupt even after his/her discharge. It might be necessary to liaise with any insolvency practitioner trustee where the bankrupt’s conduct related to matters raised by him/her.
Action following making of order
32 As soon as possible after the discharge hearing the official receiver should (or should arrange for the trustee to) write to the bankrupt reminding him/her of the terms of the order. The letter should inform the bankrupt that if he/she does not obey the court’s order, application will be made for the order to be varied. In addition, in very exceptional circumstances, application may be made for his/her committal.
Note: [s375(1)] [s363(4)]
Effect and preparation of order
33 The court’s order of discharge may provide for it to have immediate effect, or for its effect to be suspended for a period, or until the fulfilment of any condition. An order of discharge will be drawn up by the court. Although dated at the day it is pronounced, the order does not take effect until the date of its being drawn up, but it may then have retrospective effect. Copies of the order must be sent by the court to the bankrupt, any trustee and the official receiver.
Note: [s280(3)] [Form 6.76] [R6.219]
Appeal against order
Variation of order or appeal
35 The official receiver should draw the attention of Technical Section to any exceptional or special features, whether lenient or severe, of the decision of the court on such an application so that it may consider the possibility of an appeal. If the official receiver recommends the Secretary of State to appeal, the reasons for the recommendation should be stated. In any such case, a copy of the official receiver’s report to the court should be forwarded to Technical Section.
Notice to Headquarters
Note: [R7.49(1), 7.49A : CPR, Part 52]
Review as a result of new facts
37 If after a bankrupt has obtained his/her discharge facts come to light which, had they been known earlier, might have caused the court to reach a different decision, the official receiver should consider whether to apply to the court to review, rescind or vary the order.
Review as a result of default
38 Similarly, the official receiver should consider, as soon as possible, applying to the court for a review of the discharge order where a bankrupt has failed to comply with any conditions contained in it. It is frequently the practice, if the original discharge order is revoked (thus making the debtor a bankrupt again), for the court to order that this will be without prejudice to payments already made, which will form part of the estate. If the debtor does not appear on the review hearing, the official receiver should write to him at his last known address telling him of the result of the hearing.
Official receiver’s expenses
40 In important cases or where further material evidence is likely to be given at the hearing, the official receiver should arrange to have a shorthand record taken of the evidence and the judgment, but the cost of transcribing the notes should only be incurred when it becomes necessary for the purposes of an appeal, or following a request from Technical Section. The cost of the written record is paid as part of the expenses of the official receiver in the proceedings, so is payable from the administration fee.
41 Any expense incurred in relation to a shorthand writer is payable from the administration fee.