Chancery Division

Published March 25, 2008

Halabi (a Bankrupt) v Camden London Borough Council and Another

The current practice in some county courts of annulling a bankruptcy order, on the basis of an undertaking from the bankrupt’s solicitor to pay the debts, costs and expenses of the bankruptcy, was not within the jurisdiction of the court.

Mr John Jarvis, QC, sitting as a deputy Chancery Division judge, so held on February 14, 2008, when annulling a bankruptcy order, subject to a direction that it should not take effect until a later date, made against the applicant, Hala Halibi, on a petition presented by Camden London Borough Council in respect of unpaid rates.

HIS LORDSHIP said that there was a divergence of view between the practice in the High Court Registry and the practice in some county courts where annulment orders had been made on the basis of undertakings to pay.

Section 282(1)(b) of the Insolvency Act 1986 and rule 6.211(2) of the Insolvency Rules (SI 1986 No 1925) were very clear and provided that the bankruptcy debts and the expenses of the bankruptcy had to have been paid and that all bankruptcy debts which had been proved had to have been paid in full.

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