Levy v Legal Services Commission
| Jurisdiction | England & Wales |
| Judgment Date | 04 February 2000 |
| Date | 04 February 2000 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Evans-Lombe
Insolvency - costs order arising out of family proceedings
A costs order arising out of family proceedings was not an obligation arising under an order made in family proceedings for the purposes of rule 12.3(2)(a) of the Insolvency Rules (SI 1986 No 1925) and could therefore form the basis of a bankruptcy petition.
Mr Justice Evans-Lombe so held in a reserved judgment in the Chancery Division, dismissing the appeal of Raymond Harvey Levy from the dismissal by District Judge Hewitson-Brown at St Albans County Court on September 20, 1999, of his application to set aside a statutory demand served by the Legal Aid Board in respect of some Pounds 62,732.53 due under an order for costs made by Mr Justice Thorpe on October 19, 1994 in proceedings brought by Mr Levy's estranged wife.
Miss Marcia Shekerdemian for Mr Levy; Mr Richard Evans for the Legal Aid Board.
MR JUSTICE EVANS -LOMBE said that the district judge, relying on a number of authorities, including In re a Debtor (No 5883 of 1979)TLR(The Times February 20, 1981), had erroneously held that the Legal Aid Board occupied a position separate from Mr Levy's ex-wife and that therefore their claim for costs fell outside rule 12.3(2)(a) of the 1986 Rules.
The board had no rights which derived other than from the original costs order, the benefit of which was assigned to them at the time the order was made by operation of regulation 91(1)(b) of the Civil Legal Aid (General) Regulations (SI 1989 No 339), and the nature of the assigned debt was in no way affected by this assignment.
An order in family proceedings could form a valid petitioning debt for the purposes of a bankruptcy petition: see Russell v Russell([1999] BPIR 259), Galoppa v Galoppa ([1999] BPIR 352) and In re MordantFLR ([1996] 1 FLR 334).
While the court might decline to make a bankruptcy order based on a non-provable petitioning debt, it might equally decide to do so because of special circumstances such as the debtor having other provable debts.
As it would not be known until the petition was heard whether special circumstances justifying the making of a bankruptcy order existed, the challenge mounted by Mr Levy was premature, although it clearly would need to be considered when a bankruptcy petition based upon that demand came to be heard.
There was a second basis on which the district...
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Levy v Legal Services Commission
...Harvey Levy appealed with permission of Peter Gibson LJ granted on 25 May 2000 from the order of Evans-Lombe J on 4 February 2000 ([2000] 1 FCR 642) dismissing his appeal from the order of District Judge Hewetson made in the St Albans County Court on 20 September 1999 dismissing his applica......