- Lord Hope of Craighead
- Lord Scott of Foscote
- Lord Walker of Gestingthorpe
- Lord Mance
- Lord Collins of Mapesbury
Tuesday, 30 June 2009
Monday, 29 June 2009
"But a bankrupt, with us, signifieth generally either man or woman, that, living by buying and selling, hath gotten other persons goods into his or her hands, and concealeth himself from his creditors, or commits other acts, which make him a bankrupt, according to the statutes in that cafe made and provided."
Sunday, 28 June 2009
"He refinanced these loans in in 2006 in an effort to stave off insolvency. But even this couldn't keep him out of debt."
Saturday, 27 June 2009
"Simon Ford, who founded a "gift experience" company that prospered in the United Arab Emirates' boom years, said he had been forced to escape as he feared being sent to debtors' prison under strict bankruptcy laws...Dubai's bankruptcy laws mean that debtors can go to prison merely for bouncing a cheque, while breaching stringent rules on trading while insolvent can bring lengthy terms."
Friday, 26 June 2009
"RECOMMENDATION 5.23: The UK Insolvency Service, with appropriate input from
the relevant department(s) of the Scottish Government, should be made responsible
for laying down the rules to be applied by insolvency practitioners on both sides of
the border. This should be achieved by UK legislation."
5.267 Company law is in general reserved, and the Scotland Act achieves this by reserving
“business associations” (which include partnerships as well as companies). But company
law interacts with other aspects of Scots law, including the procedures which are
followed by courts when winding up companies which are insolvent. The boundary
which is drawn in the Scotland Act between these two areas of law is quite complex,
because the law itself is inevitably complicated also. The Scotland Act (Schedule 5,
Part II, Section C2) reserves (in relation to business associations) “(a) the modes of,
and grounds for and the general legal effect of winding up, and the persons who may
initiate winding up, (b) liability to contribute to assets on winding up, (c) powers of courts
in relation to proceedings for winding up, other than the power to sist proceedings, (d)
arrangements with creditors and (e) procedures giving protection from creditors”. But
it devolves “(a) the process of winding up, including the person having responsibility
for the conduct of a winding up or any part of it, and his conduct of it or of that part,
(b) the effect of winding up on diligence, and (c) avoidance and adjustment of prior
transactions on winding up” and “floating charges and receivers, except in relation
to preferential debts, regulation of insolvency practitioners and co-operation of
5.268 Essentially this means that the ways in which winding up can happen, and the grounds
for doing so, are reserved. This prevents there being different circumstances under
which winding up can happen in different parts of the UK. The reservation of the
general legal effect of winding up allows for a consistent legislative response to court
rulings affecting insolvency. The “process of winding up” – which is devolved – refers
to procedural issues arising in practice (for example, who would need to be served with
information or documents about the case, and by what timescales, by various parties
5.269 The elements involved in this process have changed since the Scotland Act came into
force. Previously the winding-up process in Scotland could be seen as analogous to
the procedure used for (personal) bankruptcy. But changes to the administration
procedure in Great Britain (made by the Enterprise Act 2002) to allow winding up
through administration has meant that there could be undesirable differences in the
processes governing winding up depending on the jurisdiction under which that
winding up happens.
5.270 Bankruptcy law in Scotland has a different history to the law in England and Wales and
has always been subject to a separate legal framework (as the Scotland Act recognises
in the exceptions made in Schedule 5).
5.271 It was suggested to the Commission that legislation relating to corporate insolvency
in Scotland has lagged behind that in England and Wales. The Scottish Government
has said that it proposes to make amendments to the Scottish Insolvency Rules in 2009
to remove cross-references to personal insolvency and replace them with stand-alone
provisions with the intention of making the Rules clearer, and that additional resources
have been made available by the Accountant in Bankruptcy. The Rules are also being
reviewed to identify areas where administrative burdens can be eased by simplifying
processes and ensuring consistency between insolvency procedures. A similar
modernisation project is being carried out for England by the Insolvency Service.
5.272 Notwithstanding moves by the Accountant in Bankruptcy to bring the law relating to
insolvency procedure in line with that of England and Wales, the Commission has heard
from insolvency practitioners who question the necessity of duplicating work in Scotland
and the potential this allows for divergence in policy and practice. The Institute of
Chartered Accountants of Scotland (ICAS), for example, argues that this is unhelpful in a
field in which businesses operate across the UK, supported by lenders who also operate
common policies across different jurisdictions
5.273 Given that the Scotland Act 1998 reserved company law as a whole to the UK
Parliament, there is an argument that the current division of responsibility for liquidation
between the UK and Scottish Parliament should be ended.
5.274 On the other hand, some of the exceptions to the general reservation in the Scotland
Act relate to matters where the law of Scotland is materially different from the law of
England, not least because of the distinction between law and equity. This underlies
much of English law on securities, bankruptcy, receivership and winding up and does
not exist in Scots law. Scots law must therefore find different solutions appropriate to
the nature of the problem. In addition, the Scottish courts exercise a wide supervisory
jurisdiction in relation to liquidators, receivers, administrators and other aspects of
winding up. The procedures of the Scottish courts are, of course, a matter of Scots law.
5.275 The Commission is, however, persuaded that devolution has produced an unsatisfactory
state of affairs relating to corporate insolvency in that:
• there is an absence of clarity as to where responsibility lies for drawing up the rules
to be followed by insolvency practitioners dealing with corporate insolvencies;
• there are unnecessary and confusing divergences between the insolvency rules
applying in England and Scotland; and
• there have been unnecessary and damaging delays in introducing new rules in
5.276 Many corporate insolvencies involve companies operating on both sides of the border.
Clarity, consistency and speed are essential, particularly in the present economic and
financial climate. Whether or not, as some submissions have suggested, the necessary
expertise is lacking in Scotland (which the Commission is not in a position to judge), that
does not alter the importance of clarity, consistency and speed.
5.277 In the opinion of the Commission, the serious issues raised in connection with corporate
insolvency might be resolved without altering the reserved/devolved boundary in
Schedule 5 in relation to primary legislative competence. The essential point appears to
be that the UK Insolvency Service, with appropriate input from the relevant department(s)
of the Scottish Government, should be made responsible for laying down the rules
to be applied by insolvency practitioners on both sides of the Border. This could be
achieved by UK legislation to which the Scottish Parliament would consent by legislative
consent motion under the Sewel Convention.
5.278 If such a solution is not possible for technical reasons (or if, which the Commission hopes
would not be the case, the Scottish Government and Parliament were to withhold their
consent or cause unnecessary delays in agreeing a solution), then it would be necessary
for the UK Parliament to amend Section C2 of Schedule 5. Given the complexity of this
area of the law generally, and the terms of Section C2 in particular, the Commission is
not in a position to suggest the terms of an appropriate amendment, nor would it be
appropriate to do so. The Commission does, however, consider that this is a problem
which should now be resolved with the minimum of delay."
"So on the 15th the Calman Comission proposes re-reserving insolvency matters to Westminster to eradicate the divergences, and eight days later, The Scottish Parliament proposes further divergences. Good to see they're all singing from the same hymn sheet North of the border."
Quite so, I can add nothing to this critical evaluation of these two recent corporate insolvency proposals.
Thursday, 25 June 2009
Proof of debts and some interesting comments on old bankruptcy statutes - Official Receiver v McKay  EWCA Civ 467
"As Mr Ritchie pointed out in his helpful submissions, the 1986 Act is a mixture of new law and re-enactment of old law. Provisions such as section 282 are in very similar terms to the preceding law but other provisions are very different and in many significant respects the legislative regime is altogether different. In Re Smith Ex parte Braintree District Council  2 AC 215 at 238 Lord Jauncey said that the 1986 Act was to be construed "as a piece of new legislation without regard to 19th Century authorities or similar provisions of repealed Bankruptcy Acts." However, it is not always right to ignore previous authorities, as Hoffmann J said in Re a Debtor (No 784 of 1991)  Ch 554 at 558:
"That approach to construction was approved by the House of Lords in In re Smith (A Bankrupt), Ex parte Braintree District Council  2 A.C. 215, in which Lord Jauncey of Tullichettle said, at p. 238, that, in view of the changes in policy shown by the new Act, he felt justified in construing the provision of the Act of 1986 "as a piece of new legislation without regard to 19th century authorities or similar provisions of repealed Bankruptcy Acts."
Those authorities show that, in approaching the language of the Act of 1986, one must pay particular attention to the purposes and policies of its own provisions and be wary of simply carrying over uncritically meanings which had been given to similar words in the earlier Act. It does not, however, mean that the language of the new Act comes to one entirely free of any of the intellectual freight which was carried by words and phrases in earlier bankruptcy or other legislation.
Decisions of the court upon the meanings of phrases used in Acts of Parliament may come, in the course of time, to give them the quality of terms of art which Parliament may well be assumed to have intended them to bring with them when used in subsequent legislation. In section 265, for example, terms such as "domiciled," "personally present," "ordinarily resident," have had attributed to them, both in the context of bankruptcy and in that of civil procedure generally, a wealth of refined construction which it is difficult to suppose Parliament did not intend equally to apply when those words were used in the Act of 1986. Is there any reason why that should not apply equally to the words "has carried on business?" There does not seem to me to be anything in the policy of the new Act which suggests that in this provision Parliament was intending to give those words a different meaning from those which they had been held to bear under the Act of 1914."
"realises" for the purposes of the IA86 s.283A(3)(a) - Lewis & Anor v Metropolitan Property Realisations Ltd  EWCA Civ 448 (12 June 2009)
Wednesday, 24 June 2009
"Dealing with debt, 23/06/2009Further measures will be taken to help Scots who are struggling to deal with debt. Responding to the report of the Debt Action Forum, Community Safety Minister Fergus Ewing said the Scottish Government would bring forward legislation to:
- Extend the protection offered to the family home in bankruptcy to protected trust deeds
- Extend the period for which a sheriff may postpone the sale of a family home from one to three years
- Introduce a requirement for trustees in bankruptcy and trust deeds to notify the local authority of the sale of a family home
- Allow the exclusion of specified assets from protected trust deeds
- Extend access to bankruptcy by allowing a certified route that is fair and open
- Exempt any essential vehicle valued at £3,000 or less from bankruptcy proceedings
- Introduce new grounds for bankruptcy restrictions to encourage debtors to take responsibility for their on going liabilities
- Remove the requirement to advertise bankruptcy in the Edinburgh Gazette
Mr Ewing said: "We are very grateful to the members of the Debt Action Forum for the time and effort they have put into the group. Some very helpful and positive areas came up for discussion. "The Debt Action Forum has provided a comprehensive review of the support and advice available for those who are unable to manage their debt. This has been food for thought for the Government. "Given the current economic downturn I am moving quickly to announce that we will bring forward legislation, at the earliest opportunity, to put into place some of the changes discussed by the group. "For example we will extend the protection that's given to the family home during bankruptcy to protected trust deeds. We will build on the success of the Low Income Low Asset route into bankruptcy and widen access to debt relief through bankruptcy by creating a certified route that is fair and open. "We will also put in place measures to protect cars, where the value doesn't exceed £3,000, from being sold by the trustee in bankruptcy to make sure that families are not unnecessarily deprived of their main method of transport. "In addition to this immediate programme of work, we recognise that some of the areas discussed by the Forum are more complex and need further consideration. That's why we will be consulting on a number of further changes. "Meanwhile the Scottish Government will continue to press the UK Government to take action on consumer credit, lending protocols and debt collection practices. "I hope these changes can help us ensure that as many Scots as possible receive the help and support they need while they are suffering under the strain of unmanageable debt."
Setting Aside Statutory Demands - Dissent in the Court of Appeal - Remblance v Octagon Assets Ltd  EWCA Civ 581
"Mann J was entitled to take the view that there is nothing unjust in Octagon demanding payment of a debt owed by someone who is liable to pay it. Nor is it unjust for Octagon or the court to expect someone, who is able to pay an indisputable debt, to pay it. If Mr Remblance chooses not to pay a debt which he is able to pay and cannot dispute, Mann J was entitled to take the view that he has chosen to suffer the consequences of not complying with the demand. It is just that he should have to live with the consequences of his own decision. The judgments of Ward and Dyson LJJ, which I have read in draft, do not persuade me that this court has grounds for interfering with the exercise of discretion by this experienced judge. I would dismiss this appeal."
Tuesday, 23 June 2009
"Setanta Sports Customers from England, Wales, Scotland, Isle of Man and
Channel Islands, please be advised that it is with great regret that Setanta GB
is no longer trading.
Setanta Sports is still operating in the Republic of
Ireland and Northern Ireland only. Customers from ROI and NI should go to www.setanta.com/ie for
Setanta Sport LimitedSetanta Transmissions (UK)
LimitedSetanta Sports S.a.r.l(All In Administration)(together "the
On 23 June 2009, Neville Kahn, Lee Manning and Nick Edwards were
appointed Joint Administrators of the Companies and now manage the affairs,
business and property of Setanta Sport Limited and Setanta Transmissions (UK)
Limited and Setanta Sports S.a.r.l.. The Joint Administrators contract as agents
of the Companies and without personal liability"
Monday, 22 June 2009
- Hamilton Academicals
Following Ronaldo's recent record transfer for the same price as Newcastle Football Club (£85,000,000), this news story throws the different financial ends of the 'beautiful game' into sharp focus. I am currently investigating whether or not the three clubs would also be subjected to some form of point penalty if they enter an insolvency procedure. As I have previously argued, this form of 'added' penalty (excuse the pun), which insolvent clubs face in England and Wales, does not help rescue goals (sorry).
Sunday, 21 June 2009
Wednesday, 17 June 2009
"He was often accompanied to
the High Court by his dog, Captain, a springer spaniel who would snooze beside
him when he was on the bench, and, in time off from his courtroom duties, go
sniffing around the corridors in the hope of finding scraps of
Picture Credit: Bella Kenmillix Tullulah Belle as a puppy.
Tuesday, 16 June 2009
"The ECRO seeks to restrain Mr and Mrs Hurst from (1) making any claims against the Trustee and persons associated with him (being his former firm, BDO Stoy Hayward ("BDO") and solicitors Taylor Wessing ("TW")) where such claims arise out of or concern any matter relating to the bankruptcy proceedings, or the conduct of the Trustee as trustee in bankruptcy of Mr Hurst or nominee of Mr Hurst's IVA,; and (2) from communicating with the Applicant, BDO, TW or any partner, former partner, employee or former employee thereof, by telephone, fax, or email (save for certain limited purposes), without first obtaining the permission of a judge of the Chancery Division."