Forder v Forder & Anor

A person affected by a bankruptcy order may apply for its annulment under section 282 of the Insolvency Act 1986, even if that person does not claim to be a creditor. The court must consider the applicant’s interest and the alleged grounds existing when the order was made. A decision about the convenient sequencing of an annulment application and related ancillary-relief proceedings is a case-management decision. Where the judge has properly addressed the overriding objective and reached a reasonable discretionary conclusion, the Court of Appeal should not substitute its own view.

The husband presented a debtor’s bankruptcy petition without notice while matrimonial ancillary-relief proceedings were due to begin. A bankruptcy order was made, and the wife applied under section 282(1)(a) of the Insolvency Act 1986 for annulment, disputing liabilities included in his statement of affairs.

Mr Justice Coleridge declined to determine the annulment application immediately. He ordered that the financial issues be addressed in the already listed ancillary-relief proceedings and stayed the bankruptcy proceedings pending that determination. The husband sought permission to appeal, arguing that the wife lacked standing and that the bankruptcy order was plainly justified.

1. Permission refused. The application had no prospect of success.
2. Section 282 of the Insolvency Act 1986 contains no requirement that an applicant for annulment be a creditor. A person affected by a bankruptcy order may apply where they contend that, on grounds existing when the order was made, it ought not to have been made. The court must consider the extent of the applicant’s interest and any prejudice.
3. The judge was entitled to postpone the annulment application while determining substantially overlapping financial issues in the ancillary-relief proceedings. The choice was a case-management decision within his discretion and was consistent with the overriding objective under the Civil Procedure Rules.
4. The Court of Appeal’s task was not to decide whether it would have adopted the same course. Applying the approach stated in Pallisers of Hereford Ltd v Reekie Manufacturing Ltd and Others [2002] EWCA Civ 959, it could interfere only if substitution of the judge’s decision was justified. The judge had identified the relevant issue and reached a sensible and pragmatic conclusion.
5. The application for permission to appeal was dismissed. Public funding costs assessments were ordered, together with an order under section 11 of the Access to Justice Act concerning the wife’s costs.

• High Court, Family Division: Mr Justice Coleridge ordered that the wife’s application to annul the bankruptcy order be considered after determination of overlapping financial issues in the ancillary-relief proceedings, and stayed the bankruptcy proceedings pending that determination.
• Court of Appeal (Civil Division): Permission to appeal was refused and the application dismissed.