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 The creditors withdrew their proofs of debt, and the debtor applied for the receiving order to be rescinded. The Official Receiver did not make any objection to the conduct of the debtor or ask for a public examination, and the registrar rescinded the receiving order. The Official Receiver appealed to the CA contending that the registrar had no jurisdiction to rescind a receiving order merely on the ground that a private arrangement had been made with the creditors; alternatively, if there was jurisdiction, it was wrongly exercised.
Held: None of the members of the Court doubted the existence of the jurisdiction or that Section 104 gave the bankruptcy court an absolute discretion to rescind or vary any of its orders. By a majority the Court held that a receiving order may properly be rescinded where the debtor has afterwards come to a private arrangement with his creditors, but emphasised that the court will act only with great caution and under special circumstances which make it clear that the arrangement is for the benefit of the creditors and where the debtor has not been guilty of any misconduct in connection with his insolvency.
Citations:
[1897] 1 QB 241
Statutes:
Jurisdiction:
England and Wales
Cited by:
Distinguished – In Re A Debtor No 12 of 1970 CA 1970
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 . .
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.652378