Official Receiver applying for suspension of automatic discharge of bankruptcy - application made ex parte - court having power to make ex parte order of suspension

Bagnall v Official Receiver: ChD (Mr Justice Evans-Lombe): 18 June 2003

The appellant bankrupt would have obtained the automatic discharge of his bankruptcy, pursuant to section 279(1)(2) of the Insolvency Act 1986, on 6 August 2002, three years after the date of the bankruptcy order.

The respondent, the Official Receiver, applied for a suspension of that discharge on 23 July 2002, which was less than the requisite period of 21 days before the discharge was due to come into effect.

Since the application was urgent, it was made ex parte.

The district judge ordered that the automatic discharge be suspended until the substantive hearing of the application.

After his application to strike out the proceedings had been dismissed, the bankrupt appealed.

The bankrupt in person; Richard Ritchie (instructed by the Treasury Solicitor) for the Official Receiver.

Held, dismissing the appeal, that the court had the power, pursuant to the Insolvency Rules 1986 (SI 1986/1925), to make an ex parte, interlocutory order suspending a bankrupt's automatic discharge where it regarded the making of the order as urgent and appropriate, considering the balance of convenience between the Official Receiver, as representing the interests of the creditors, and the bankrupt; that suspension of discharge was one of the weapons available to those administering insolvent estates to coerce a bankrupt into duly performing his duty to co-operate with the trustee in bankruptcy in realising his assets for the benefit of his creditors; that had the ex parte order not been made, that weapon would have been removed before proper consideration could take place, at a full hearing, of the question of whether the Official Receiver was justified in seeking suspension.