Insolvency Act 1986, section 305

General functions of trustee

Part IX Bankruptcy

(1)This Chapter applies in relation to any bankruptcy where either—

(a)the appointment of a person as trustee of a bankrupt’s estate takes effect, or

(b)the official receiver becomes trustee of a bankrupt’s estate.

(2)The function of the trustee is to get in, realise and distribute the bankrupt’s estate in accordance with the following provisions of this Chapter; and in the carrying out of that function and in the management of the bankrupt’s estate the trustee is entitled, subject to those provisions, to use his own discretion.

(3)It is the duty of the trustee, if he is not the official receiver—

(a)to furnish the official receiver with such information,

(b)to produce to the offical receiver, and permit inspection by the official receiver of, such books, papers and other records, and

(c)to give the official receiver such other assistance,

as the official receiver may reasonably require for the purpose of enabling him to carry out his functions in relation to the bankruptcy.

(4) The official name of the trustee shall be “the trustee of the estate of ............, a bankrupt” (inserting the name of the bankrupt); but he may be referred to as “the trustee in bankruptcy” of the particular bankrupt.

Cases considering section 305 28

Patley Wood Farm LLP & Ors v Kristina Kicks & Anor

[2023] EWCA Civ 901 · 28 July 2023Interprets

The court interpreted section 305(2) as preserving the trustee’s discretion in managing the bankrupt’s estate. The discretion allowed the Trustees to weigh the limited prospective benefit against the estate’s deficit, litigation burdens, costs and independence concerns; they were not required to act for creditors at all costs (see paras [37]; [73]-[76]).

Ahmed & Ors v Ingram & Anor

[2018] EWCA Civ 519 · 19 March 2018

Section 305 imposed an immediate obligation on the trustee in bankruptcy to realise the shares for creditors. That obligation made the transferees’ failure immediately to tender the shares a breach in the circumstances. (see paras [51]; [54]-[55])

Avonwick Holdings Ltd & Anor v Shlosberg

[2016] EWCA Civ 1138 · 18 November 2016Defines

The provision defines a bankruptcy trustee’s function as getting in, realising and distributing the bankrupt’s estate. Assisting a creditor’s separate claim merely because it might reduce that creditor’s proof does not fall within that function. (see paras [41]; [84]–[85])

8 more judgments, and what each says about section 305, are in the case-law panel in the full Act.

Amendments and notes

4 notes from legislation.gov.uk

Modifications

  1. C1016S. 305 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13, Sch. 1 para. 1(b)
  2. C1017Ss. 298–307 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II
  3. C1018S. 305 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 17
  4. C1019S. 305 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 19