Insolvency Act 1986, section 337

Rights of occupation of bankrupt

Part IX Bankruptcy

(1)This section applies where—

(a)a person who is entitled to occupy a dwelling house by virtue of a beneficial estate or interest is [F874madeF874] bankrupt, and

(b)any persons under the age of 18 with whom that person had at some time occupied that dwelling house had their home with that person at the time when the [F875bankruptcy application was made or (as the case may be) theF875] bankruptcy petition was presented and at the commencement of the bankruptcy.

(2)Whether or not the bankrupt’s [F876spouse or civil partner (if any) has home rightsF876][F877 under Part IV of the Family Law Act 1996F877] —

(a)the bankrupt has the followng rights as against the trustee of his estate—

(i)if in occupation, a right not to be evicted or excluded from the dwelling house or any part of it, except with the leave of the court,

(ii)if not in occupation, a right with the leave of the court to enter into and occupy the dwelling house, and

(b)the bankrupt’s rights are a charge, having the like priority as an equitable interest created immediately before the commencement of the bankruptcy, on so much of his estate or interest in the dwelling house as vests in the trustee.

[F878 (3)The Act of 1996 has effect, with the necessary modifications, as if—

(a)the rights conferred by paragraph (a) of subsection (2) were [F879 home rightsF879] under that Act,

(b)any application for such leave as is mentioned in that paragraph were an application for an order under section 33 of that Act, and

(c)any charge under paragraph (b) of that subsection on the estate or interest of the trustee were a charge under that Act on the estate or interest of a spouse [F880 or civil partnerF880] .F878]

(4)Any application for leave such as is mentioned in subsection (2)(a) or otherwise by virtue of this section for an order under [F881section 33 of the Act of 1996F881] shall be made to the court having jurisdiction in relation to the bankruptcy.

(5)On such an application the court shall make such order under [F881section 33 of the Act of 1996F881] as it thinks just and reasonable having regard to the interests of the creditors, to the bankrupt’s financial resources, to the needs of the children and to all the circumstances of the case other than the needs of the bankrupt.

(6)Where such an application is made after the end of the period of one year beginning with the first vesting (under Chapter IV of this Part) of the bankrupt’s estate in a trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt’s creditors outweigh all other considerations.

Cases considering section 337 3

Brittain v Haghighat & Anor

[2009] EWHC 90 (Ch) · 12 January 2009Interprets

The court treated the provision as engaging the exceptional-circumstances analysis in relation to the bankrupt husband’s occupation of the matrimonial home. (see para [27]) The court applied the corresponding just-and-reasonable discretion by considering creditors’ interests, the family’s needs and resources, and the other circumstances of the case. (see paras [19]-[20]; [79]-[83]) The court applied the corresponding creditor presumption and found that the exceptional medical and caregiving circumstances justified a balancing exercise rather than automatic priority for creditors. (see paras [19]; [27]; [82]-[83])

Barca v Mears

[2004] EWHC 2170 (Ch) · 24 September 2004Interprets

The provision was treated as imposing a similar creditors-first assumption where a minor had his or her home with the bankrupt at the relevant bankruptcy dates. Its application was left factually uncertain, but the appeal would fail even assuming it applied. (see paras [16], [43])

Turner v Haworth Associates & Anor

[2001] EWCA Civ 370 · 23 February 2001Limits

The court treated section 337 as immaterial because the trustee in bankruptcy was not seeking possession of the property. The provision therefore did not assist the argument based on Mrs Carter Pennington’s entry and possession.

What each judgment says about section 337 is in the case-law panel in the full Act.

Amendments and notes

8 notes from legislation.gov.uk

Amendments

  1. F874Word in s. 337(1)(a) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 30(a); S.I. 2016/191, art. 2 (with art. 3)
  2. F875Words in s. 337(1)(b) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 30(b); S.I. 2016/191, art. 2 (with art. 3)
  3. F876Words in s. 337(2) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 22(2); S.I. 2005/3175, art. 2(1), Sch. 1
  4. F877Words in s. 337(2) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 58(2) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)
  5. F878S. 337(3) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 58(3) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)
  6. F879Words in s. 337(3)(a) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 22(3)(a); S.I. 2005/3175, art. 2(1), Sch. 1
  7. F880Words in s. 337(3)(c) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 22(3)(b); S.I. 2005/3175, art. 2(1), Sch. 1
  8. F881Words in s. 337(4)(5) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 58(4) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)