A bankruptcy petition was presented against the debtor and a receiving order was made upon it. He afterwards assured his creditors that he would pay them in full. The petitioning creditor was content with his assurance, but the other creditors were not. Despite their opposition the debtor applied to the registrar for the receiving order to be rescinded and the registrar rescinded it. The debtor now argued that although there was no scheme of arrangement or composition (and could not be having to the weight of opposition), and no ground upon which an adjudication could be annulled, nevertheless there were exceptional circumstances which justified the rescission of the receiving order.
Held: There were no such exceptional circumstances. It was merely a case of a debtor who had gained the belated sympathy of the petitioning creditor though not of all those who had submitted proofs, but who could make no concrete offer to his creditors.
Russell LJ distinguished Re Izod on the ground that in that case there was a de facto scheme of arrangement approved by all the creditors and arrived at in the course of proceedings subject to the scrutiny of the Official Receiver who did not oppose the application or insist upon a public examination. He concluded: ‘In our judgment the exceptional circumstances that justify the exercise of the power under Section 108(1) to rescind a receiving order and set aside the bankruptcy must be such as are closely analogous to the expressly recognised circumstances which enable a bankruptcy to be halted or annulled.’
Judges:
Russell LJ
Citations:
[1971] 1 WLR 1212
Jurisdiction:
England and Wales
Citing:
Distinguished – In Re Izod CA 1897
The debtor had presented his own petition and a receiving order was made upon it. An arrangement was later made under which the debtor’s father paid the creditors 10s. in the pound and the creditors released their debts. The creditors withdrew their . .
Cited by:
Cited – Fitch v The Official Receiver CA 15-Nov-1995
Appeals from refusals to rescind bankruptcy orders. The bankrupts had, after lodging their appeals, persuaded the petitioning creditor and several other creditors to support the application. The first bankrupt was acting as agent in negotiations . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 31 December 2022; Ref: scu.652379