Re A Debtor, ex parte the Debtor v Allen
| Jurisdiction | England & Wales |
| Date | 1967 |
| Court | Chancery Division |
Bankruptcy - Debt - Ability to pay - Judgment debt payable by instalments - Whether “debt” presently payable total sum or instalments accrued due -
A. lost the sight of an eye as the result of being hit by a pellet from an airgun held by J. J. admitted liability and A. recovered judgment for £2,400 damages in the Queen's Bench Division of the High Court. The order as drawn up was corrected under the slip rule and in its final form (which the court treated as in force at all material times) provided for that sum to be paid by weekly instalments of 25 shillings. Both parties were infants. On March 8, 1966, a consent order was made in Reading County Court for the payment of the weekly instalments into that court. On the advice of his solicitors J. presented his petition in bankruptcy on April 12, 1966, and on the same day a receiving order was made against him and he was adjudicated bankrupt, pursuant to section 6 of the Bankruptcy Act, 1914. A. applied to the county court and the registrar annulled the adjudication and rescinded the receiving order.
On appeal from the registrar's order:—
Held, (1) that on the true construction of section 6 of the Bankruptcy Act, 1914, only those debts which were presently payable were relevant for the purpose of determining ability to pay debts; that only the weekly instalments accrued due and unpaid were immediately payable and since, on the facts, the debtor was able to meet these instalments he had not shown that he was unable to pay his debts.
(2) That the debtor had had no reasonable grounds for alleging that he was unable to pay his debts, so that the adjudication ought not to have been made and should be annulled under section 29 of the Bankruptcy Act, 1914.
Per curiam. The presentation of the petition was an abuse of the process of the court (post, p. 596D).
APPEAL from Reading County Court.
Tony Allen (hereinafter called the respondent) was hit in the eye by a pellet shot from an airgun held by Brian Ronald Josey (the appellant) and lost the sight of that eye. On February 11, 1966, in an action in the Queen's Bench Division before Widgery J., on an admission of liability by the appellant, the respondent recovered judgment for £2,400 damages. That order as drawn up was, on October 13, 1966, corrected by Widgery J. under the slip rule, and as so corrected provided (so far as is material to this report):
“IT IS THIS DAY ADJUDGED that the plaintiff [the present respondent] recover from the defendant [the present appellant] £2,400. 0. 0. and costs to be taxed. AND IT IS ORDERED that the defendant do have no present liability for the payment of such costs and that payment thereof be not enforced without leave of the courts. AND IT IS FURTHER ORDERED that execution herein be stayed pending a further direction by the Honourable Mr. Justice Widgery. AND IT IS FURTHER ORDERED that the amount of the said judgment be paid to the Reading County Court by instalments of £1 5s. per week. AND IT IS FURTHER ORDERED that there be liberty to apply regarding the stay of execution and as regards any variations of the said instalments.”
Both parties were at all material times, and still are infants. On March 8, 1966, by consent, an order was made in the Reading County Court for payment of weekly instalments of £1 5s. into that court. The appellant, Josey, did not in fact make any payment to the county court but he, apparently, put aside the amount of the instalments or some part thereof.
On April 12, 1966, on the advice of his solicitors, the appellant presented his own petition in bankruptcy and on the same day a receiving order was made against him and he was adjudicated bankrupt pursuant to section 6 of the Bankruptcy Act, 1914. In his statement of affairs the appellant gave as his debts the £2,400, a further £34 0s. 9d. for clothing purchased through a clothing club and £8 balance due in respect of a moped. His assets were £10 cash in hand and £10, the estimated value of the moped. The respondent applied, on July 28, 1966, to the registrar of the county court for...
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