Insolvency Act 1986, section 314

Powers of trustee

Part IX Bankruptcy

[F828 (1)The trustee may exercise any of the powers specified in Parts 1 and 2 of Schedule 5.F828]

(2)F829... the trustee may appoint the bankrupt—

(a)to superintend the management of his estate or any part of it,

(b)to carry on his business (if any) for the benefit of his creditors, or

(c)in any other respect to assist in administering the estate in such manner and on such terms as the trustee may direct.

F830(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F830(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Part III of Schedule 5 to this Act has effect with respect to the things which the trustee is able to do for the purposes of, or in connection with, the exercise of any of his powers under any of his Group of Parts.

(6)Where the trustee (not being the official receiver) in exercise of the powers conferred on him by any provision in this Group of Parts—

(a)disposes of any property comprised in the bankrupt’s estate to an associate of the bankrupt, or

(b)employs a solicitor,

he shall, if there is for the time being a creditor’s committee, give notice to the committee of that exercise of his powers.

(7)Without prejudice to the generality of subsection (5) and Part III of Schedule 5, the trustee may, if he thinks fit, at any time [F831seek a decision on a matter fromF831] the bankrupt’s creditors.

Subject to the preceding provisions in this Group of Parts, he shall [F832seek a decision on a matterF832] if he is requested to do so by a creditor of the bankrupt and the request is made with the concurrence of not less than one-tenth, in value, of the bankrupt’s creditors (including the creditor making the request).

(8)Nothing in this Act is to be construed as restricting the capacity of the trustee to exercise any of his powers outside England and Wales.

Cases considering section 314 8

Leopard v Robinson

[2020] EWHC 2928 (Ch) · 4 November 2020Interprets

The provision was considered in explaining the pre-25 May 2015 requirement for permission before exercising certain Schedule 5 powers. The later amendment removed that requirement. (see paras [49], [54], [56]) The provision enabled the trustee to appoint the bankrupt to assist in carrying on the business, but it was subject to Schedule 5’s limitation to beneficial winding up. The court found that Robinson traded as the trustee’s appointee. (see paras [49]-[58], [85], [103])

Gresham International Ltd & Anor v Moonie & Ors

[2009] EWHC 1093 (Ch) · 20 May 2009Limits

The court applied section 314(4), together with rule 4.184(2), as limiting retrospective sanction to cases involving urgency and an application for ratification without undue delay. (see paras [30]; [59]; [60]; [74]; [76])

Power v Brown & Ors

[2009] EWHC 9 (Ch) · 15 January 2009Interprets

Identifies trustee powers requiring the permission of the creditors’ committee or court, as specified in Part I of Schedule 5. The court considered the provision in assessing the alleged need for consent to the assignment (see para [46]). Confirms that the trustee may exercise the general powers in Part II of Schedule 5 without permission. That framework supported the conclusion that the assignment fell within the trustee’s power of sale (see para [47]).

What each judgment says about section 314 is in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Amendments

  1. F828S. 314(1) substituted (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 121(2)(a), 164(3)(i)(i)
  2. F829Words in s. 314(2) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 121(2)(b), 164(3)(i)(i)
  3. F830S. 314(3)(4) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 121(2)(c), 164(3)(i)(i)
  4. F831Words in s. 314(7) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 81(a); S.I. 2015/1329, reg. 3(d) text substituted for certain specified purposes only, see the commentary. Note: in some cases two versions of the measure may be present: the original version and substituted version.
  5. F832Words in s. 314(7) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 81(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications

  1. C1037S. 314 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II
  2. C1038S. 314(7) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 20