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12 January 2018
Failure to comply with sections 333 and 363 of the Insolvency Act constitutes contempt of court for which a committal order may be obtained.
A trustee in bankruptcy should not usually require permission to apply for a committal order.
Correct procedure for application confirmed by the court.
Mr Pearce was made bankrupt and Mr Simmonds was appointed as his trustee in bankruptcy. In contravention of a bankrupt's duty to co-operate with the trustee in bankruptcy and give to him information as to his affairs, Mr Pearce refused to provide any such information and further took active steps to conceal his assets including lying on affirmation.
Mr Simmonds applied for Mr Pearce's committal to prison for contempt of court, providing certification that his conduct breached provisions of the Insolvency Act 1986 without reasonable excuse.
The court found that the bankrupt had committed "an extremely serious case of contempt of court covering a wide range of reprehensible conduct" by failing to comply with his duties and obligations under the Insolvency Act 1986.
The court further found that, while the legislation was unclear on the point, the appropriate procedure to apply for committal to prison in such circumstances was pursuant to the "certification procedure" of CPR 81.15 which had been followed by Mr Simmonds.
This appears to be the first decision to clarify the procedure for applying for a committal order on the basis of breaches of Insolvency Act provisions and provides helpful guidance to practitioners on this issue. The judges in the case recommended that the procedure be considered by the Rules Committee given the lack of clarity under the Civil Procedure Rules.
For further information on this topic please contact Amy Patterson at Taylor Wessing by telephone (+44 20 7300 7000) or email (email@example.com). The Taylor Wessing website can be accessed at united-kingdom.taylorwessing.com.
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