Bankruptcy — Order for sale of property Exceptional circumstances — Likelihood of creditors being paid in full even if sale delayed — Whether this amounting to exceptional circumstances — Appeal dismissed
The respondent was the trustee in bankruptcy of K. K had previously been in a relationship with the appellant. Following their separation, the appellant continued to live with their four children in a house that had been purchased in their joint names. The respondent applied for an order for sale of the property under section 335A of the Insolvency Act 1986.
It was common ground that, because more than one year had elapsed between the respondent’s appointment as trustee and the making of his application, the court had to assume that the interests of K’s creditors outweighed all other considerations unless exceptional circumstances arose within the meaning of section 335A(3). The judge held that these were not exceptional circumstances, and granted the order for sale.
On appeal, the appellant argued that the judge should not have have ordered an immediate sale, but should have postponed it for a further 12 years, until the youngest child reached the age of 16. She argued that the creditors were likely to be paid in full with interest even if the children were allowed to remain in the property until they were older, and that the judge had been bound by authority to conclude that this fact amounted to “exceptional circumstances”.
Held: The appeal was dismissed.
The judge had not been wrong to conclude that the circumstances were not exceptional. He had taken into account the consideration that the creditors were likely to be paid in full but had nevertheless decided that, taken together with all the other circumstances, they were not exceptional. No authority required him to reach the contrary conclusion: Re Holliday (a bankrupt) [1981] Ch 405 distinguished; Re Domenico Citro (a bankrupt) [1991] Ch 142 considered.
Nicholas Elcombe (instructed by Blocks, of Ipswich) appeared for the appellant; David Nicholls (instructed by Ashfords, of Bristol) appeared for the respondent.
Sally Dobson, barrister
