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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

23 OCT 2012

Department of Business, Innovation and Skills v Compton

(North East Derbyshire and Dales Magistrates' Court, District Judge (Magistrates' Courts) Andrew Davison, 5 April 2012)

A bankrupt was prosecuted under ss 357(1) and 356(1) (five charges) of the Insolvency Act 1986. Charge 1 alleged that on or about 19 March 2008, being a bankrupt, in the period of 5 years prior to being adjudged bankrupt, he caused to be made a charge of a property contrary to s 357(1) of the Act. Charges 2 - 6 were under s 356(1) of the Act alleged that between 4 December 2008 and 25 March 2009, being a bankrupt, he made material omissions in a statement made under s 291 of the Act in relation to his affairs in that he failed to disclose (1) three Clydesdale Bank accounts (2) and interest in another property; and (3) that since late 2006 he had received income as a speedway rider. All charges were dismissed as, on the facts, the bankrupt had proved that, at the time of the conduct constituting the offence, he had no intention to defraud or to conceal the state of his affairs. There were legitimate business reasons for the charge over the property. The bankrupt had been less than frank with his disclosures, but he was entitled to have a bank account even after his bankruptcy and he genuinely believed the bank accounts were of no relevance to the Official Receiver's investigation, such that he was not acting dishonestly. Whilst he did have an interest in the other property, he had no intention to act fraudulently or to conceal the state of his affairs, as he disclosed it to his trustee in bankruptcy. What income he did receive from his speedway riding hobby was notified in general terms, and there was little if any profit from such income once all the necessary incurred expenses had been off-set against it.

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