Anwar v Afzal

For an application under section 282(1)(a) of the Insolvency Act 1986, the court must ask whether, on grounds existing when the bankruptcy order was made, the order ought not to have been made. An appellate court will not interfere with findings of fact and credibility supported by documentary evidence where there is no realistic prospect of success. Fresh evidence should not be admitted where it could have been obtained before trial and would not materially affect the findings. A person who delayed for several years after choosing not to give evidence cannot ordinarily reopen committal proceedings merely by attacking other witnesses’ credibility.

The applicant, a former solicitor, sought permission to appeal against a Leeds County Court order dismissing her application under section 282(1)(a) of the Insolvency Act 1986 to annul a bankruptcy order. She alleged that the bankruptcy petition had been presented without the creditor’s authority and sought to rely on further evidence concerning legal aid records.

She also sought permission to appeal out of time against a 1996 order of Sachs J finding her in contempt of court and imposing a fine. The applications raised issues concerning the authority for the bankruptcy proceedings, the admission and significance of further evidence, standing to challenge the bankruptcy debt, and whether the contempt proceedings could be reopened after substantial delay.

Lord Justice Chadwick, sitting alone, refused both applications for permission and made no order for costs.

1. Annulment of bankruptcy. Section 282(1)(a) of the Insolvency Act 1986 required the court to focus on whether, on grounds existing at the time of the bankruptcy order, the order ought not to have been made. The recorder had correctly treated the issue as whether the creditor’s solicitors had acted without authority in presenting and pursuing the bankruptcy petition.
2. The recorder had heard and seen the witnesses and had made clear findings that the creditor had authorised the proceedings. Those findings were supported by extensive contemporaneous letters, attendance notes and file notes. The Court of Appeal had no prospect of interfering with them, and the application for permission to appeal was therefore hopeless.
3. The proposed further evidence, consisting of a Legal Services Commission letter and legal aid certificates, failed the requirement that it could not have been obtained before trial. It had in any event been placed before the recorder before his order was drawn up, giving him an opportunity to review his findings. The evidence would not have materially affected the result, particularly because the recorder had been satisfied that the creditor’s evidence was false even without relying on the solicitor’s evidence. The application to adduce it, and the related applications, were refused.
4. Challenge to the 1996 order. So far as the order concerned payment and costs, the resulting debt had vested in the trustee in bankruptcy. Once the application to annul failed, the applicant had no standing or locus to challenge that debt, and that part of the application was struck out.
5. The applicant did have standing to challenge the contempt finding and fine. However, she had chosen not to give evidence before Sachs J, although entitled to take that course in committal proceedings. After five and a half years, she could not reopen the matter merely by seeking to challenge the credibility of other witnesses. Permission to appeal out of time was refused.

1. Court of Appeal (Civil Division): On 25 July 2002, Lord Justice Chadwick refused permission to appeal against the Leeds County Court order, refused permission to appeal out of time against the 1996 order of Sachs J, struck out the application concerning the bankruptcy debt, and made no order for costs. [2002] EWCA Civ 1261
2. Leeds County Court: Recorder Allen QC dismissed the application to annul the bankruptcy order under section 282(1)(a) of the Insolvency Act 1986, finding that the creditor had authorised the bankruptcy proceedings.
3. Blackburn County Court: A bankruptcy order was made against the applicant on 18 May 2000 on a petition based on the judgment debt and costs.
4. High Court, Queen’s Bench Division: Sachs J made an order on 25 September 1996 finding the applicant in contempt of court and imposing a fine of £1,500, together with an order for payment and costs.