Ramesh Philippe Dusoruth v Orca Finance UK Limited (in liquidation)

Failure to satisfy a statutory precondition for presenting a bankruptcy petition does not automatically require annulment of a bankruptcy order. Under section 282 of the Insolvency Act 1986, the court retains a genuine discretion to annul or refuse to annul the order, including where the petition did not comply with section 267(2)(b). The requirements that the debt be liquidated and unsecured are equal statutory preconditions. Neither is a superior threshold condition. In exercising the annulment discretion, the court may consider the position of other creditors and the wider class-remedy nature of bankruptcy proceedings.

The appellant sought permission to appeal against orders of ICC Judge Mullen dated 16 September and 3 November 2022. The judge had held that the debt relied on for the bankruptcy petition was not liquidated, applying Hope v Premierpace, but had declined to annul the bankruptcy order.

The appellant argued that the absence of a liquidated debt meant the court lacked jurisdiction to make the bankruptcy order and was obliged to annul it under section 282 of the Insolvency Act 1986. The central issue was whether section 282 conferred a real discretion where the petition failed to satisfy section 267(2)(b).

1. The renewed application for permission to appeal was dismissed. The proposed appeal had no realistically arguable basis because Owo-Samson v Barclays Bank was binding authority on the interaction between sections 267(2)(b) and 282 of the Insolvency Act 1986.

2. Section 267(2)(b) contains two equal preconditions for presentation of a creditor’s petition: the debt must be for a liquidated sum and it must be unsecured. The court could not rationally treat the liquidated-debt requirement as a superior threshold condition to the security requirement. Both are statutory conditions of the same kind.

3. In Owo-Samson, the Court of Appeal held that failure to satisfy a statutory condition did not remove the court’s discretion under section 282. The word “may” gives the court a genuine two-way discretion whether to annul the bankruptcy order. The court may take account of the position of other creditors because bankruptcy is a class remedy.

4. Hope v Premierpace was not capable of displacing that binding authority. Although it treated the absence of a liquidated debt as going to the court’s jurisdiction, it did not establish that section 282 required automatic annulment whenever section 267(2)(b) was not satisfied.

5. Raiffeisenlandesbank Oberösterreich AG v Meyden did not govern the issue. It concerned territorial jurisdiction to open bankruptcy proceedings and had not considered the effect of a failure to satisfy section 267(2)(b). Its general procedural principle was, at least, qualified by the binding approach in Owo-Samson for statutory preconditions of a bankruptcy petition.

6. The exercise of the discretion below was not appealable on the proposed ground. Permission to appeal was therefore refused.

• Chancery Appeals: The renewed application for permission to appeal against orders of ICC Judge Mullen dated 16 September and 3 November 2022 was dismissed.