Goremsandu v Thomas & Ors

A court will grant an injunction restraining the administration of a bankruptcy only in exceptional circumstances. Relief which would place the bankruptcy in limbo, or would substantially reproduce an earlier refused application for a stay, is inappropriate where it may prejudice creditors, trustees or third parties. A bankrupt remains subject to the statutory duty to co-operate with the trustees while the bankruptcy order stands. Practical concerns concerning bank accounts, rents, mortgages or property restrictions should ordinarily be addressed through that co-operation rather than by an injunction.

The applicant sought an interim injunction against her trustees in bankruptcy. She asked the court to restrain inquiries into her affairs, remove restrictions placed on properties, secure access to bank accounts for pension payments, prevent interference with tenancies and restrain administration of the bankrupt estate pending an application to annul her bankruptcy.

The bankruptcy order had been made on 20 May 2019. Applications to annul the bankruptcy and to stay its conduct had been adjourned by Insolvency and Companies Court Judge Jones to January 2020. The applicant had not co-operated with the trustees, relying on the pending annulment application and related judicial review proceedings concerning the tax liability underlying the bankruptcy.

1. Application dismissed. The injunction would achieve, by another route, a stay of the bankruptcy pending the annulment hearing. A stay of a bankruptcy order after it has been made is granted only in exceptional cases because it leaves the debtor, creditors and trustees in limbo and may seriously prejudice creditors and others dealing with the debtor.
2. Judge Jones had necessarily considered whether a stay should be granted pending the later hearing and had declined to grant one by adjourning both the annulment and stay applications. The present application therefore sought to revive an issue already decided against the applicant on an interim basis.
3. Restrictions placed on identifiable property in a bankruptcy were a basic step in administration of the estate and were not, without more, prejudicial. The court refused to order their removal.
4. The complaint about access to bank accounts had been raised for the first time in submissions. The trustees had not had an opportunity to address it, and a sensible arrangement for pension payments was likely if the applicant co-operated.
5. The applicant was required by statute to co-operate with the trustees while the bankruptcy order remained in force. Failure to do so might constitute criminal offences and lead to further orders. Information about rents and mortgages was also necessary to enable the trustees to protect the estate and address any risk of repossession.
6. The application was certified as totally without merit. The order and application notice were directed to be amended to remove Gareth Price and identify Nicholas O'Reilly as the correct joint trustee with Simon Thomas.

The judgment was a first-instance decision on an interim injunction application. The court recorded that applications to annul the bankruptcy and to stay its conduct had been adjourned by Insolvency and Companies Court Judge Jones to January 2020.