Order annulling a bankruptcy order can be rescinded.
Irwin Mitchell has successfully assisted an individual in the unusual step of obtaining the rescission of an annulment of a bankruptcy order that was made against him.
The individual, who is an EU citizen, made an application for his own bankruptcy as he was unable to pay his debts as they fell due. At the time, he was residing and working in the UK. He was adjudged bankrupt in February 2020.
In March 2021, over a year after the making of the bankruptcy order, a creditor sought to annul the bankruptcy, alleging that the individual could pay his debts as he had acted as a director of several companies.
The creditor failed to serve the individual with the witness statement before the hearing, which was held via telephone in June 2021. Due to poor audio quality, the individual, who required an unofficial translator, could not fully understand or participate in the hearing. Despite this, the court granted the annulment.
The individual, wishing to remain bankrupt, instructed Irwin Mitchell in July 2021.
Copies of the transcript of the annulment hearing were sought; however, these were not available due to the poor audio quality at the hearing. An application was made to the court for access to the hearing documents. It was clear that creditor provided no substantive evidence of the individual’s ability to pay his debts, and the judge’s reasoning for the annulment was not documented.
In June 2024, the individual applied to rescind the annulment on the grounds that he was unable to consider the creditor’s evidence, file his own evidence, or present his case at the annulment hearing.
In November 2024, the court agreed and granted the application to rescind the annulment and ordered the creditor to pay costs in full within 14 days of the sealed order’s service.
The successful outcome reaffirms the importance of fair hearing procedures and the necessity for creditors to provide substantive evidence when seeking to annul a bankruptcy as well as the cost implications of an adverse costs order.
Andrew Walker and Eniko Vella at Irwin Mitchell advised the individual.
