Wilson v Williams

The court may suspend automatic discharge from bankruptcy until a bankrupt fulfils a specified condition, including full compliance with reasonable requests for information. The power under section 279 of the Insolvency Act 1986 is penal in character, but its exercise must remain connected with the bankrupt’s obligations and the trustee’s statutory functions. A condition requiring the trustee to report compliance, with liberty to apply to the court if necessary, is not invalid merely because it leaves the precise duration uncertain. An appellate court should not interfere with a discretionary decision unless there is an error of principle, a failure to consider a material matter, or a decision that is plainly wrong.

This was an appeal against an order suspending the appellant’s automatic discharge from bankruptcy until the trustee reported that he had complied with his obligations. The order also required disclosure concerning correspondence with a financial adviser, a credit union account and pension arrangements. The appellant had supplied some information but continued to withhold pension documents, asserting that the pension was excluded from the bankruptcy estate. The central issue was whether the suspension condition was impermissibly wide, insufficiently specific or disproportionate.

1. The appeal was dismissed, save that the order was corrected by replacing the fifth-last word in paragraph 3 with “or”.

2. Section 279 of the Insolvency Act 1986 permits the court to stop the running of the automatic discharge period until a specified condition is fulfilled. The power is penal in character and is intended to ensure that the bankrupt remains subject to the disabilities of bankruptcy until compliance with the statutory obligations.

3. The trustee’s requests for information concerning the pension were reasonable. Whether the pension ultimately vested in the trustee was a separate question. The trustee was entitled first to obtain the documents needed to investigate and decide whether that issue should be challenged. The appellant’s offer to cooperate only to the extent necessary did not comply with the order.

4. An order substantially in the form approved in Mawer v Bland was permissible. The appellant was protected by the express liberty to apply and by rule 6.216 of the Insolvency Rules 1986. The condition did not improperly delegate the court’s supervision to the trustee.

5. The court applied the restraint applicable to appeals from discretionary decisions. There was no material error of principle, failure to consider a relevant matter or decision that was wholly wrong. The suspension therefore remained in force until proper disclosure and information had been provided.

This was an appeal to the High Court against an order made by District Judge Edwards on 24 October 2014. Permission to appeal was granted only on the issue whether the suspension condition was too wide. The appeal was dismissed, subject to correction of the typographical error.