High Court considers the correct procedure for committal proceedings brought by a Trustee in bankruptcy

Simmonds v Pearce [2017] EWHC 35 (QB) (1 December 2017) provided a clear case of deliberate and calculated non–co-operation with the Trustee and of calculated attempts to obstruct him in his functions. The Court had directed that the respondent answer questions and to co-operate with the Official Receiver and the trustee, but he failed to obey the court’s directions and persisted in telling lies at public examinations despite making a solemn and binding promise, to tell the truth.

The High Court has considered the procedure for a trustee in bankruptcy to apply to commit a bankrupt who has failed to comply with his statutory obligations under the Insolvency Act 1986 (IA 1986).

On the making of a bankruptcy order, the IA 1986 imposes various obligations on a bankrupt; such as to deliver up his estate, co-operate with his trustee and provide information on his affairs.

In this case, the bankrupt had repeatedly failed to comply with sections 333 and 363 of the IA 1986. Both sections provide that a bankrupt who fails to comply without reasonable excuse is guilty of contempt of court. The trustee applied to the Administrative Court, under CPR 81.15, to determine the sanction.

On the facts, the court held that the bankrupt had failed to comply with his statutory obligations without a reasonable excuse. This amounted to an extremely serious case of criminal contempt and a committal order (a Court order sending a person to prison to serve a custodial sentence) was appropriate.

The court stated that the CPR is unsatisfactory and unclear and that the whole procedure should be reviewed by the Civil Procedure Rule Committee. We can, therefore, anticipate new guidance in due course.

Our specialist lawyers in our Dispute Resolution and Insolvency Department at Chadwick Lawrence would be delighted to discuss matters with you to allow them to gain a complete understanding as to how they can assist you.

If you would like to receive some further information, please do not hesitate to call 0113 225 8811 or email zoeallen@chadlaw.co.uk