At the date of the bankruptcy the bankrupt was entitled to a pension, payable in the future on his attaining the age of 65 years. He was aged 61 when the bankruptcy order was made, and 64 when it was discharged. The trustee claimed to be entitled to elect under the policy to commute part of the annuity for a tax free lump sum; and to take that lump sum and the reduced annuity as part of the bankrupt’s estate.
Held: Pension benefits payable after a bankrupt’s discharge were not ‘after acquired’. Both the cash lump sum and the continuing annuity payable under a retirement annuity contract were property of the bankrupt which vested automatically in the trustee in bankruptcy under the Insolvency Act 1986. he `bundle of contractual rights’ under the pension policy to which the bankrupt had been entitled at the commencement of the bankruptcy fell within the description `things in action . . whether present or future or vested or contingent’; and so had to be regarded as within the definition of `property’ in section 436 IA 1986. It was immaterial that the policy was not in payment at the commencement of the bankruptcy. At the commencement of the bankruptcy the bankrupt had a present right to require the pension provider to make payments under the policy in the future. It was that right – and the associated rights to elect when payments should commence – which formed part of the bankrupt’s estate.
References: Times 01-Jan-1997, Gazette 29-Jan-1997,  Ch 223
Judges: Ferris J
Statutes: Insolvency Act 1986 306
Jurisdiction: England and Wales
This case is cited by:
- Cited – National Grid Co Plc v Mayes and Others; International Power Plc (Formerly National Power Plc) v Healy and Others HL 7-Jun-2001
The release by the trustees of a sum due to the pension scheme from the employers, did not make funds payable to the employer, so as to trigger the clause within the scheme trust deed which would restrain such a payment. Where an actuarial surplus . .
(Times 10-Apr-01, Gazette 07-Jun-01, , ,  UKHL 20,  2 All ER 417,  1 WLR 864)
- Cited – Malcolm v Mackenzie, Allied Dunbar Plc CA 21-Dec-2004
The bankrupt complained that having been made bankrupt, his self-employed pension was subject to attachment by his trustee, but had he been a member of a company scheme the asset would not, and that this was discriminatory.
Held: The . .
(,  EWCA Civ 1748,  EWCA Civ 1748, Times 04-Jan-05)
- Cited – Horton v Henry CA 7-Oct-2016
No obligation on bankrupt to draw on pension fund
The trustee in bankruptcy appealed against a decision dismissing his application for an income payments order pursuant to section 310 of the 1986 Act in respect of income which might become payable to the respondent from his personal pension . .
(,  EWCA Civ 989,  WLR(D) 506, )
- Approved – Dennison v Krasner, Lesser, Lawrence CA 6-Apr-2000
A retirement annuity or personal pension was part of a bankrupt’s estate before the recent Act, and vested immediately in the trustee on the bankruptcy. As such there was no need to make application to the court under s310 for an income payment . .
(Times 18-Apr-00, Gazette 11-May-00, ,  EWCA Civ 112,  Ch 76)
These lists may be incomplete.
Last Update: 21 November 2020; Ref: scu.81997