(1)With effect from the commencement of the later bankruptcy anthing to which section 334(3) applies which, immediately before the commencement of that bankruptcy, is comprised in the bankrupt’s estate for the purposes of the earlier bankruptcy is to be treated as comprised in the bankrupt’s estate for the purposes of the later bankruptcy and, until there is a trustee of that estate, is to be dealt with by the existing trustee in accordance with the rules.
(2)Any sums which in pursuance of an income payments order under section 310 are payable after the commencement of the later bankruptcy to the existing trustee shall form part of the bankrupt’s estate for the purposes of the later bankruptcy; and the court may give such consequential directions for the modification of the order as it thinks fit.
(3)Anything comprised in a bankrupt’s estate by virtue of subsection (1) or (2) is so comprised subject to a first charge in favour of the existing trustee for any bankruptcy expenses incurred by him in relation thereto.
(4)Except as provided above and in section 334, property which is, or by virtue of section 308 (personal property of bankrupt exceeding reasonable replacement value) or section 308A (vesting in trustee of certain tenancies) is capable of being, comprised in the bankrupt’s estate for the purposes of the earlier bankruptcy, or of any bankruptcy prior to it, shall not be comprised in his estate for the purposes of the later bankruptcy.
(5)The creditors of the bankrupt in the earlier bankruptcy and the creditors of the bankrupt in any bankruptcy prior to the earlier one, are not to be creditors of his in the later bankruptcy in respect of the same debts; but the existing trustee may prove in the later bankruptcy for—
(a)the unsatisfied balance of the debts (including any debt under this subsection) provable against the bankrupt’s estate in the earlier bankruptcy;
(b)any interest payable on that balance; and
(c)any unpaid expenses of the earlier bankruptcy.
(6)Any amount provable under subsection (5) ranks in priority after all the other debts provable in the later bankruptcy and after interest on those debts and, accordingly, shall not be paid unless those debts and that interest have first been paid in full.
Cases considering section 335 3
[2019] EWCA Civ 1289 · 19 July 2019Interprets
Section 335 applies where a later bankruptcy begins while the debtor remains undischarged from an earlier bankruptcy. It transfers the benefit of the income payments order to the later bankruptcy, subject to the statutory treatment of the earlier trustee’s claim. (see paras [17]-[18])
Section 335(1) treats money already paid under an earlier income payments order and held at the commencement of the later bankruptcy as part of the later estate. (see para [18])
The court interprets section 335(2) as dealing with payments under an income payments order where the later bankruptcy begins during the earlier undischarged bankruptcy. It rejects any implication that future payments remain enforceable outside the later bankruptcy after discharge. (see paras [23]-[29])
Section 335(6) subordinates the earlier trustee’s provable claim in the later bankruptcy to other provable debts. This forms part of the statutory policy favouring the later estate where the debtor remains undischarged. (see paras [18], [28])
[2018] EWHC 2766 (Ch) · 2 October 2018Interprets
Interprets section 335 as governing successive bankruptcies where the earlier bankruptcy is undischarged. Its application to that situation does not imply that an income payments order disappears where the earlier bankruptcy was discharged (see paras [18]–[22]).
Interprets section 335(2) as assuming that amounts payable under an earlier income payments order continue to be payable after a later bankruptcy. For undischarged bankruptcies, it makes those amounts part of the later estate; its absence in discharged cases does not extinguish the order (see paras [18]–[22]).
Confirms that property comprised in the earlier estate is not comprised in the later estate for the purposes of the successive-bankruptcy provisions (see para [18]).
Confirms that, where the first bankruptcy is undischarged, creditors in it are not creditors in the later bankruptcy, while the earlier trustee may prove for the unsatisfied balance (see paras [18], [20]).
Confirms that liabilities proved by the earlier trustee rank after debts payable in the later bankruptcy (see para [18]).
[2008] EWHC 1580 (Ch) · 20 May 2008Limits
The judgment considers the provision by analogy. It notes that exceptional circumstances may justify refusing or delaying sale in a bankruptcy context, while recognising that the provision is not directly applicable to the present charging-order application. (see paras [20]-[21])
What each judgment says about section 335 is in the case-law panel in the full Act.