Hurst v Bennett & Ors

A general statutory power to review, rescind or vary an order cannot be used to evade an express statutory prohibition. Where an earlier application for an interim order was heard and dismissed, a later application supported by a different proposal and nominee was a fresh second application. The 12-month bar in Insolvency Act 1986 section 255(1)(c) therefore applied.

The review power in section 375(1) was not held to be unavailable in every interim-order case. It could not, however, achieve an outcome which Parliament had prohibited. Estoppel cannot confer jurisdiction contrary to such a prohibition. Permission for a second-tier appeal requires the prescribed threshold to be met; an obvious, fact-specific application of the statute raised no important point of principle or practice.

A bankruptcy order was made against the appellant on a petition by former partners. Before the bankruptcy hearing, he sought an interim order for an individual voluntary arrangement under Insolvency Act 1986 section 252. The Registrar dismissed that application on 12 April 2001 and made the bankruptcy order.

The appellant later sought review under section 375(1), relying on a proposal and nominee that had not been available at the first hearing. The Registrar reviewed the matter but made no substantive order. Ferris J dismissed the appellant’s appeal on 30 July 2001, holding that the later application was barred by section 255(1)(c). The appellant then sought permission for a second-tier appeal. The central issue was whether section 375(1) could be used to avoid the statutory bar on a further interim-order application within 12 months.

Application for permission to appeal dismissed. Mummery LJ gave the reasons, with which Jonathan Parker LJ agreed.

1. This was a second-tier appeal. Under the Civil Procedure Rules 1998, permission was available only if the proposed appeal raised an important point of principle or practice, or there was some other compelling reason to hear it. The proposed appeal satisfied neither threshold.

2. The Registrar had heard and dismissed the appellant’s first application for an interim order on 12 April 2001. The later application, although framed as a review under section 375(1) of the Insolvency Act 1986, was substantively a fresh application. It relied on a nominee and materially more detailed proposal than those before the Registrar at the first hearing.

3. Section 255(1)(c) expressly prevented the court from making an interim order where the debtor had made a previous application within the preceding 12 months. Section 375(1) could not properly be used to circumvent that prohibition. The court did not decide that section 375(1) could never be used in relation to interim orders; its conclusion was confined to the circumstances in which a purported review was, in substance, a prohibited second application.

4. The alleged inaccuracies in a creditor’s evidence could have been relevant on an appeal from the original dismissal, but they did not answer the statutory bar. Nor did estoppel assist the appellant. There was no relevant representation, and estoppel could not confer a jurisdiction which the statute withheld.

5. The application was dismissed with costs, assessed at £2,969.81 inclusive of VAT, to be treated as the petitioning creditors’ costs under the Insolvency Rules 1986.

• Court of Appeal (Civil Division): Permission for a second-tier appeal was refused and the application dismissed: [2001] EWCA Civ 1398.
• High Court, Chancery Division (Ferris J): On 30 July 2001, dismissed the appellant’s appeal from the Registrar’s decision, holding that section 255(1)(c) barred the later application for an interim order.
• Registrar: On 11 July 2001, following review under section 375(1) of the Insolvency Act 1986, declined to make substantive relief in respect of the dismissed interim-order application.