The Official Receiver v Brown

Non-compliance by a bankrupt with statutory duties under the Insolvency Act 1986 constitutes contempt of court where the breach is proved beyond reasonable doubt and there is no reasonable excuse. The duties include providing a statement of affairs, delivering up the bankrupt’s estate and records, attending on and providing information to the official receiver, and co-operating with the trustee. A bankrupt cannot avoid those duties by asserting that the bankruptcy order is invalid unless that order has been set aside or successfully appealed. Procedural non-compliance with a deadline will not necessarily defeat committal proceedings where no sanction was imposed, the respondent suffered no material prejudice, and extending time or waiving the breach is proportionate.

The Official Receiver applied for certification of nine instances of contempt against Clive Washington Brown, an undischarged bankrupt. The alleged breaches concerned statutory obligations to provide information and a statement of affairs, deliver up his estate and records, attend examinations, and co-operate with the trustees in bankruptcy.

Mr Brown contended that the bankruptcy order was invalid, that his bankruptcy had been discharged, and that the committal proceedings were procedurally defective. The court also considered the effect of a short delay in issuing the application and the jurisdictional wording of CPR 81.15. The central issues were whether the certified breaches were proved and whether Mr Brown had any reasonable excuse.

1. The court proceeded on the basis that a judge of the High Court outside the Administrative Court was not excluded from making orders under CPR 81.15. The provision was read inclusively and permissively. The certification, service and filing requirements had otherwise been complied with.
2. The delay in issuing the committal application was waived or time was extended. Although compliance with a committal deadline was important, no sanction had been attached to the order, the point had not previously been taken, Mr Brown had not been disadvantaged, and stopping the proceedings would have been disproportionate.
3. Mr Brown remained an undischarged bankrupt. His assertions that the bankruptcy proceedings had been struck out, that he had been automatically discharged, and that the bankruptcy order was void were misconceived. The order had not been annulled, set aside or successfully appealed. Those assertions did not provide a reasonable excuse for non-compliance.
4. The criminal standard of proof applied. The court accepted the evidence of the Deputy Official Receiver and the examining officer and found beyond reasonable doubt that Mr Brown had breached Insolvency Act 1986 sections 288(1), 291(1) and (4), 312 and 333(1). He had failed to provide a statement of affairs and information, deliver up his estate and records, attend when required, and co-operate with the trustees.
5. The Official Receiver’s certification was correct on every ground. Mr Brown was guilty of contempt of court and liable to punishment. Consideration of punishment, purging the contempt and mitigation was adjourned until his attendance at a further hearing. His entitlement to legal aid was continued.