Jackson v Bell

Permission to appeal may be granted after an earlier appeal where the application raises an important point of principle or another compelling reason. Questions concerning the balance under Insolvency Act 1986, section 335A, between creditors’ interests and the family’s rights in a former matrimonial home may satisfy that threshold. So may unresolved questions about whether a spouse is a creditor before a property adjustment order is made and whether such an order may constitute a transaction at an undervalue or preference. A real prospect of recovering sufficient damages to preserve the home may also support permission.

Mrs Bell’s former matrimonial home was jointly owned with her bankrupt husband. The trustee in bankruptcy obtained an order for sale under section 335A of the Insolvency Act 1986. A district judge refused postponement, and Mr Anthony Mann QC, sitting as a deputy judge of the Chancery Division, dismissed her appeal. Permission had previously been refused on paper. Mrs Bell renewed her application, raising questions about section 335A, Article 8, property adjustment orders, preferences and transactions at an undervalue.

1. The application for permission to appeal was allowed. The requirements of CPR 52 rule 13 and CPR 52.3(6) were satisfied because the proposed appeal raised important points of principle and other compelling reasons.
2. Section 335A of the Insolvency Act 1986 requires the court, when considering sale of land including the bankrupt’s or spouse’s home, to balance creditors’ interests against the other statutory considerations. After one year, creditors’ interests are presumed to outweigh those considerations unless the circumstances are exceptional. The interaction between that presumption, the meaning of exceptional circumstances and Article 8 raised an arguable point of principle. Article 8 protects the home, but paragraph 2 recognises the protection of creditors’ rights as a legitimate interest requiring consideration.
3. There were also unresolved questions about whether a spouse in whose favour a property adjustment order might be made is a creditor for the purposes of sections 382, 383 and 340, and whether a property adjustment order ordinarily made by the Family Division can be a transaction at an undervalue under section 339. The proper boundary between family law and insolvency law warranted consideration by the Court of Appeal.
4. There was a real prospect that Mrs Bell’s negligence claim against her former solicitors could produce sufficient damages to enable her to purchase the trustee’s interest. The appeal was therefore fit to be heard.

The stay of execution was granted. The trustee in bankruptcy was given liberty to apply in writing on seven days’ notice. There was no order as to costs.

• Court of Appeal (Civil Division): permission to appeal granted; stay of execution granted.
• Chancery Division: Mr Anthony Mann QC dismissed Mrs Bell’s appeal from the sale order.
• District Judge: ordered sale of the property under section 335A of the Insolvency Act 1986 and refused postponement.