Unsuccessful suspension of a bankrupt's discharge: Re Mittal

Introduction

A Trustee in Bankruptcy (TiB) applied to suspend a bankrupt's discharge very close to the expiry of the bankruptcy period. The application was unsuccessful because service via email had not been consented to.

Facts of the case

The TiB wished to suspend the bankrupt's discharge as the bankrupt had failed to cooperate. The TiB issued their application under section 279 of the Insolvency Act 1986, eight days before the expiry of the bankruptcy period. A copy of the application was sent to the bankrupt via email, however, personal service by courier was unsuccessful. The TiB did not seek prior approval that service would be accepted via email.

The judge approved the suspension at an initial hearing, subject to the bankrupt retaining a right to object to the suspension because an application for post validation of service was filed at a very late stage (in between day one and day two of the suspension hearing).

The bankrupt did oppose the suspension order, not on the substantive grounds that they had failed to cooperate (which was undisputed), but on procedural grounds that valid notice of the application had not been given.

When considering their decision, the Court placed great weight on section 279 of the Insolvency Act 1986 (which deals with discharge from bankruptcy), even though the reason for suspending the discharge had its merits. Section 279 gives the bankrupt a limitation defence where an application to suspend the discharge is not made before the expiry of the bankruptcy period. Service via email had not been consented to, and therefore notice had not been given ahead of the deadline and the application was time barred.

Conclusion

This case provides an important reminder about the rules of service, the importance of obtaining prior consent to service via email and also that timely considerations ahead of the expiry of the bankruptcy period are key.