Union Bank UK Plc v Pathak

Where an appeal allows an application to set aside a statutory demand to be reversed, the court has discretion over when a bankruptcy petition may be presented. The successful appellant is not necessarily entitled to present the petition immediately. The court may allow a short period for the debtor to consider payment proposals, particularly where the debtor has recently been seriously unwell.

Union Bank UK Plc appealed against the setting aside of a statutory demand served on Pathak. Having allowed that appeal, the court considered the consequential question of when the bank should be permitted to present a bankruptcy petition. Pathak sought a short postponement because of recent serious illness and recuperation. The bank relied on the delay since service of the statutory demand and sought the priority obtained by presenting a petition promptly.

1. The court had discretion as to when to permit presentation of a bankruptcy petition after allowing an appeal against the setting aside of a statutory demand.
2. Allowing the appeal created a new situation for the debtor, who had previously been in the more favourable position of having succeeded in setting aside the statutory demand.
3. A short period was appropriate to enable the debtor to consider whether to make proposals for payment. The debtor’s recent serious illness and period of recuperation were relevant to the exercise of that discretion.
4. The court ordered that a bankruptcy petition could not be presented for 10 days.

The judgment states that the court had allowed an appeal against the Chief Registrar’s decision setting aside the statutory demand. The citation of the appealed decision is not stated in the judgment.