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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

26 SEP 2013

Re Salliss (In Bankruptcy); Salliss v Hunt

(Chancery Division, Deputy Registrar Garwood, 25 March 2013)

A bankruptcy order was made against S in 1993. S sought annulment of his bankruptcy, asserting that the bankruptcy debts and expenses had been paid or secured for under s 282(1)(b) of the Insolvency Act 1986. Three debts were paid in full and another claim was withdrawn by the creditor upon part-payment, but there was a dispute as to the trustee's remuneration and expenses. Deputy Registrar Garwood dismissed the application. While it had been shown that the bankruptcy debts had been paid, the bankruptcy expenses had not. The court had to exercise its discretion as to what security was required for the bankruptcy expenses separately from its discretion as to whether to allow the annulment. The new r 6.207A of the Insolvency Rules 1986 did not apply as S's bankruptcy pre-dated the introduction of the rule, so any challenge to the trustee's expenses had to be under s 303 of the Insolvency Act 1986 and as to his remuneration under s 363 of the Act. The remuneration and expenses sought by the trustee, in excess of £50,000, exceeded the security available of £25,000 and S could not have recourse to what might be bankruptcy assets (in particular his pension entitlement) to provide further security. S had to provide security for the entire sum claimed by the trustee, in addition to the costs of that challenge, and he could not provide it. The application was misconceived.

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