Insolvency Act 1986, section 311

Acquisition by trustee of control

Part IX Bankruptcy

(1)The trustee shall take possession of all books, papers and other records which relate to the bankrupt’s estate or affairs and which belong to him or are in his possession or under his control (including any which would be privileged from disclosure in any proceedings).

(2)In relation to, and for the purpose of acquiring or retaining possession of, the bankrupt’s estate, the trustee is in the same position as if her were a receiver of property appointed by the High Court; and the court may, on his application, enforce such acquisition or retention accordingly.

(3)Where any part of the bankrupt’s estate consists of stock or shares in a company, shares in a ship or any other property transferable in the books of a company, office or person, the trustee may exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt.

(4)Where any part of the estate consists of things in action, they are deemed to have been assigned to the trustee; but notice of the deemed assignment need not be given except in so far as it is necessary, in a case where the deemed assignment is from the bankrupt himself for protecting the priority of the trustee.

(5)Where any goods comprised in the estate are held by any person by way of pledge, pawn or other security and no notice has been served in respect of those goods by the official receiver under subsection (5) of section 285 (restriction on realising security), the trustee may serve such a notice in respect of the goods; and whether or not a notice has been served under this subsection or that subsection, the trustee may, if he thinks fit, exercise the bankrupt’s right of redemption in respect of any such goods.

(6)A notice served by the trustee under subsection (5) has the same effect as a notice served by the official receiver under section 285(5).

Definitions used in section 311 1

the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act

Cases considering section 311 13

Avonwick Holdings Ltd & Anor v Shlosberg

[2016] EWCA Civ 1138 · 18 November 2016Interprets

The provision requires a trustee to possess privileged records and necessarily permits inspection for administering the estate. It does not authorise waiver or deployment against third parties. Its application to privileged third-party documents confirms that no wider power can be implied. (see paras [65]–[76]; [83])

Hunt v Harb & Anor

[2011] EWCA Civ 1239 · 27 October 2011

Section 311(4), together with section 306, is applied as confirming the personal vesting of the bankrupt’s estate in the trustee. The consequence is that the trustee is the party pursuing the vested claim and is in principle exposed to adverse costs (see paras [5], [19]).

Luc A. Despins v Ho Wan Kwok

[2023] EWHC 74 (Ch) · 20 January 2023Limits

The court applied the trustee’s power to take possession of books and records, including privileged documents, and ordered disclosure subject to safeguards (see paras [41]-[42]; [47]-[56]). The court held that the trustee may inspect privileged documents for the statutory purpose but cannot use them in a way that waives privilege (see paras [50]-[52]).

1 more judgment, and what each says about section 311, are in the case-law panel in the full Act.

Amendments and notes

1 notes from legislation.gov.uk

Modifications

  1. C1032S. 311 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II