Tucker (Applicant/Claimant) v Atkins (Respondent/Defendant)
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Aspin |
| Judgment Date | 15 April 2014 |
| Neutral Citation | [2014] EWHC 2260 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH/2013/0591 |
| Date | 15 April 2014 |
[2014] EWHC 2260 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Rolls Building
7 Rolls Buildings
Fetter Lane
London
EC4A 1NL
Mrs Justice Aspin
Case No: CH/2013/0591
Miss Parker appeared on behalf of the Claimant
Miss Hallett appeared on behalf of the Defendant
Approved Judgment
This is the hearing of Ms Tucker's application on 27 September 2012 pursuant to section 252 of the Insolvency Act, 1986 for an interim order so as to allow her to put an IVA proposal to her creditors. There is an endorsement on the proposal itself by John Edmond Taylor dated 21 September 2012 confirming his willingness to act as a nominee. Mr Taylor is an insolvency practitioner.
The proposal is based on the re-mortgage or sale of the applicant's properties. It is said that within six months of approval of the proposals by the creditors she will pay over a lump sum sufficient to discharge all the costs and the agreed creditor's claims from the proceeds of a re-mortgage of two properties, one which is residential and the other of which is stables and land with planning permission, failing which she will offer them for sale on the open market. In any event, arrangements will be concluded within 12 months unless there is an application to extend that time and it is anticipated that there will be a dividend of 100 pence in the pound. It is not disputed that the stable and land is worth between £1.1 million and £1 million and has a £70,000 charge against it and that the dwelling is valued in the region of £700,000 and has a charge in the region of £200,000 against it. Although the extent of the debts due to the creditors is in dispute, it is accepted for the purposes of this hearing that the costs of the trustee are in the region of £163,000 but it is said that there is still plenty of headroom, if I can call it that, in relation to the value of the properties which it is proposed should be sold.
The application is nevertheless opposed by the trustee in bankruptcy on the basis that the proposal is not viable. In fact, this matter has a long history and I shall give a very short summary which is not intended to be entire or fulsome in any way.
The first proposals for an IVA were on the 21 August 2007 and in fact, it was actually approved by creditors at a meeting on 4 October 2007. Thereafter, in February 2008, Ms Tucker's properties were put on the market. However, the supervisor discovered a material non-disclosure possibly in the region of £1.6 million in relation to the property. In fact, on 16 January 2009 a supervisor's report to the Insolvency Service under section 262 of the Insolvency Act was made in relation to non-disclosure and in February of that year the Insolvency Service declined to take any further action in relation to it against Ms Tucker. On 8 May 2009 there was an application for variation and there was a variation of the IVA which was approved by the creditors. Ms Tucker was required to pay £500 per month until the property was sold and then a lump sum to settle the voluntary arrangement. In fact, it said in the chronology prepared by the trustee that only two instalments of £250 each were paid.
A petition was presented for bankruptcy on 22 April 2010 and on the seventh hearing of that petition, on 21 October 2011, a bankruptcy order was made. In fact, there had been a large number of hearings which had been adjourned for various reasons, for example, the fourth hearing on 17 December 2010 was adjourned because Ms Tucker attended with an unissued application for an interim order and a new IVA proposal. The petition was adjourned and as I say it is described in the chronology prepared by the trustee as "Last chance and to enable re-mortgage".
The fifth hearing on 1 March 2011 is recorded in the chronology as being attended by Ms Tucker with an offer in principle of re-mortgage. The petition was adjourned for the length of the offer and it is then noted "Ms Tucker in difficulties with no firm offer of re-mortgage by next hearing". All of that came to nothing and as I have said the bankruptcy order was made in October 2011. In any event, Ms Tucker appealed the bankruptcy order by an Appellant's Notice of 28 October 2011 and on 19 July 2012 Mr Richard Sheldon QC sitting as a Deputy High Court Judge refused Ms Tucker's permission to appeal and/or dismissed the appeal against the bankruptcy order.
Thereafter, on 21 September 2012 Ms Tucker issued an application for an interim order pending IVA proposals and that is the application which is before me today. On 8 October 2012 she also issued an application to suspend her automatic discharge from bankruptcy which was due to take effect at midnight between 20 and 21 October 2012. The application to suspend her discharge was heard on 19 October 2012 by District Judge Gill in the Medway County Court. That application was refused but her automatic discharge was suspended for 21 days in order to allow her to seek permission to appeal from the High Court, permission having been refused by the District Judge.
In fact, Ms Tucker did appeal that decision and there is an Appellant's Notice of 12 November 2012 appealing against District Judge Gill's decision. Thereafter, there were numerous orders which were made extending time to file the appeal bundle and on 30 April 2013 District Judge Green adjourned Ms Tucker's interim order generally by consent and gave a long stop date of 30 September 2013 against which Ms Tucker also appealed out of time on 26 June 2013.
On 28 November 2013, Barling J gave permission to appeal on the first appeal and permission to appeal out of time, and dealt with the appeal on the second appeal. The following day, on 29 November 2013 he gave judgment granting Ms Tucker's first appeal, staying the automatic discharge. Further, on 13 January 2013, Barling J adjourned the interim order application which had been due to be heard on 15 January 2014 and released the case. As I have said that is what I have heard today, the application for an interim order.
It is not disputed that the law relating to interim orders, at least the statutory law is found at sections 252 to 256 of the Insolvency Act, 1986. Sections 252 and 253 provide as follows:
"252(1) In the circumstances specified below, the court may in the case of a debtor being an individual make an interim order under this section.
252(2) An interim order has the effect that during the period for which it is enforced,
(a) no bankruptcy petition relating to the debtor may be presented or proceeded with;
(aa) no landlord or other person to whom rent is payable may exercise any right of forfeiture by re-entry in relation to premises let to the debtor in respect of failure by the debtor to comply with any term or condition of his tenancy of such premises, except with the leave of the court; and
(b) no other proceedings and no execution or other legal process may be commenced or continued and no distress may be levied against the debtor or his property, except with the leave of the court.
253(1) Application to the court for an interim order may be made where the debtor intends to make a proposal under this part, that is a proposal to his creditors for a composition in satisfaction of his debts, or a scheme of arrangement of his affairs from here on referred to in either case as, "The voluntary arrangement".
253(2) The proposal must provide for some person, (the nominee) to act in relation to the voluntary arrangement, either as trustee or otherwise for the purpose of supervising its implementation and the nominee must be a person who is qualified to act as an insolvency practitioner or authorised to act as nominee in relation to the voluntary arrangement.
253(3) Subject as follows, the application may be made,
(a) if the debtor is an undischarged bankrupt by the debtor, the trustee of his estate or the official receiver and,
(b) in any other case by the debtor."
253(4) An application shall not be made under section 3(a) unless the debtor has given notice of the proposal to the Official Receiver and if there is one, the trustee of his estate.
253(5) An application shall not be made while a bankruptcy petition presented by the debtor is pending if the court has, under section 273 below, appointed an insolvency practitioner to inquire into the debtor's affairs and report."
It is not in dispute that the requirements of section 253 have been satisfied in this case. Section 255 provides as follows:
"255(1) The court shall not make an interim order on an application under section 253 unless it is satisfied,
(a) that the debtor intends to make a proposal under this part and
(b) that on the day of the making of the application, the debtor was an undischarged bankrupt or was able to petition based on the bankruptcy
(c) that no previous application has been made by the debtor for an interim order in the period of 12 months ending with that day and
(d) that the nominee under the debtor's proposal is willing to act in relation to the proposal."
It is not suggested that those requirements are not met here. Sub-section 2 provides:
"255(2) The court may make an order if it thinks fit that it would be appropriate to do so for the purposes of facilitating the consideration and implementation of the debtor's proposal."
The relevant case law is also not in dispute and it is agreed that the test is whether a proposal is serious and viable. It appears to have been the touch stone since at least the case of Hook v Doosan Ltd [1997] BCC 752, a...
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