Insolvency Act 1986, section 282

Court’s power to annul bankruptcy order

Part IX Bankruptcy

(1)The court may annul a bankruptcy order if it at any time appears to the court—

(a)that, on any grounds existing at the time the order was made, the order ought not to have been made, or

(b)that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court.

(2)F698The court may annul a bankruptcy order made against an individual on a petition under paragraph (a)... or (c) of section 264(1) [F699or on a bankruptcy applicationF699] if it at any time appears to the court, on an application by the Official Petitioner—

(a)that the petition was pending [F700or the application was ongoingF700] at a time when a criminal bankruptcy order was made against the individual or was presented after such an order was so made, and

(b)no appeal is pending (within the meaning of section 277) against the individual’s conviction of any offence by virtue of which the criminal bankruptcy order was made;

and the court shall annul a bankruptcy order made on a petition under section 264(1)(d) if it at any time appears to the court that the criminal bankruptcy order on which the petition was based has been rescinded in consequence of an appeal.

(3)The court may annul a bankruptcy order whether or not the bankrupt has been discharged from the bankruptcy.

(4)F701Where the court annuls a bankruptcy order (whether under this section or under section 261 ... in Part VIII)—

(a)any sale or other disposition of property, payment made or other thing duly done, under any provision in this Group of Parts, by or under the authority of the official receiver or a trustee of the bankrupt’s estate or by the court is valid, but

(b)if any of the bankrupt’s estate is then vested, under any such provision, in such a trustee, it shall vest in such person as the court may appoint or, in default of any such appointment, revert to the bankrupt on such terms (if any) as the court may direct;

and the court may include in its order such supplemental provisions as may be authorised by the rules.

(5)F702. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions used in section 282 1

bankruptcy debt

(a) in relation to a bankrupt, means a person to whom any of the bankruptcy debts is owed (being, in the case of an amount falling within paragraph (c) of the definition in section 382(1) or “bankruptcy debt”, the person in respect of whom that amount is specified in the criminal bankruptcy order in question), and

Defined in s.383(1) · see it in the full Act

Cases considering section 282 109

Mohammad Razi Khan v Arvinder Singh-Sall & Anor

[2023] EWCA Civ 1119 · 6 October 2023Interprets

The court treated the discretion under section 282(1) as broadly stated and requiring consideration of all relevant circumstances. (see paras [60], [66]) The court interpreted section 282(1)(a) as conferring a discretion to annul a bankruptcy order that ought not to have been made, rather than imposing an automatic annulment rule. (see paras [58], [66], [72]) The court considered the provision’s power to include supplemental provisions in an annulment order, but found no basis in the rules for directing that limitation time had not run during bankruptcy. (see para [80])

Yang v The Official Receiver

[2017] EWCA Civ 1465 · 10 October 2017Interprets

Interprets the annulment power in the context of the distinction between grounds existing at the bankruptcy date and later events. The later setting aside of the liability orders did not engage annulment. (see paras [48]-[59]) Interprets the annulment power by distinguishing grounds existing when the bankruptcy order was made from matters arising later. The liability orders were extant at that date, so annulment was unavailable. (see paras [23]; [48]-[59]) Interprets the phrase concerning grounds existing when the bankruptcy order was made. A liability order subsequently set aside was still a legally enforceable debt when the order was made and did not support annulment. (see paras [49]-[59]) Interprets the contrast between annulment and the separate provision concerning payment or security after the bankruptcy order. The contrast supported treating later events as distinct from grounds existing at the order date. (see para [57])

Oraki & Anor v Bramston & Anor

[2017] EWCA Civ 403 · 24 May 2017Interprets

The court treated section 282 as the statutory source of annulment, with distinct alternatives under subsection (1). (see paras [52]-[56]) The court treated subsection (1) as containing two alternative grounds for annulment, directed to materially different circumstances. (see paras [53]-[56]) The court interpreted paragraph (a) as requiring grounds existing when the bankruptcy order was made which show that the order ought not to have been made. That provision framed the appellants’ fraud-based annulment application. (see paras [52]-[56]) The court treated paragraph (b) as a relatively simple route out of bankruptcy where debts and expenses are paid or secured. Disputed claims need not be adjudicated before annulment if they are secured to the court’s satisfaction. (see paras [53]-[60]; [193]) The court confirmed that annulment may be ordered whether or not the bankrupt has been discharged. (see para [54])

89 more judgments, and what each says about section 282, are in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Amendments

  1. F698Word in s. 282(2) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 13(a); S.I. 2016/191, art. 2 (with art. 3)
  2. F699Words in s. 282(2) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 13(b); S.I. 2016/191, art. 2 (with art. 3)
  3. F700Words in s. 282(2)(a) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 13(c); S.I. 2016/191, art. 2 (with art. 3)
  4. F701Words in s. 282(4) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 135(2)(a), 164(3)(i)(iv) (with s. 135(4))
  5. F702S. 282(5) repealed (1.4.2004) by 2002 c. 40, ss. 269, 278, 279, Sch. 23 para. 4(b), Sch. 26 (with s. 249(6)); S.I. 2003/2093, art. 2(2), Sch. 2 (with arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

Modifications

  1. C969S. 282(1) applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II
  2. C970S. 282(4) applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II