Insolvency

Supervisor's petition for bankruptcy order - debtor paying sums due before hearing - court having jurisdiction to make bankruptcy order neverthelessCarter-Knight (a Bankrupt) v Peat: ChD (Neuberger J): 17 July 2000

The bankrupt was in arrears with her contributions under an individual voluntary arrangement and the supervisor petitioned for her bankruptcy.

A bankruptcy order was made notwithstanding that by the time of the hearing the money due had been paid.

The bankrupt applied pursuant to s.375(1) of the Insolvency Act 1986 for a review of the bankruptcy order.

The district judge dismissed the application without giving reasons.

The bankrupt appealed on the grounds that under rr.6.6 and 6.25 of the Insolvency Rules 1986 (SI 1986 No 1925) the court had no jurisdiction to make a bankruptcy order on a supervisor's petition where the amount due had been paid; and that in dismissing her application the district judge had exercised her discretion wrongly.Peter Shaw (instructed by The Rosling Partnership) for the bankrupt.

Shanti Mauger (instructed by Llewellyn Gomersall, Bournemouth) for the supervisor.Held, remitting the application to another district judge for a fresh hearing, that when rr.6.6 and 6.25 were read in conjunction with the relevant sections of the Insolvency Act 1986 the court could grant a bankruptcy order where arrears on an individual voluntary arrangement had been paid by the time of hearing; that where the court made an order on a bankruptcy petition it was particularly important that it should give reasons for its decision; and that, accordingly, since the district judge's failure to give reasons was wrong in principle, it was appropriate to remit the s.375(1) application to another district judge.