Success in Court of Appeal for Carly Sandbach

October 10, 2017

Carly Sandbach from Exchange Chambers has secured a resounding victory for her client, Manchester City Council, at the Court of Appeal.

In the case of Yang v Official Receiver & Ors, Carly Sandbach, instructed by Pannone Corporate LLP, appeared for the second respondent, Manchester City Council.

The appellant bankrupt, Yang (Y) appealed against a decision refusing to annul a bankruptcy order and instead rescinding it. The first respondent, the Official Receiver, took no part; the second respondent petitioning creditor, Manchester City Council (M) responded substantively, and the third respondent, Y’s former trustee in bankruptcy, responded in respect of any consequential challenge to the costs orders made below.

M sought payment of council tax for a property Y owned, which M had classified as a house in multiple occupancy. M obtained liability orders and successfully petitioned for Y’s bankruptcy. Y discharged the liability orders and subsequently succeeded in challenging the house’s classification in a valuation tribunal, which ordered M to remove the liability. Y applied for her bankruptcy to be annulled under the Insolvency Act 1986 Pt IX s.282 but her application was refused and instead the bankruptcy order was rescinded under s.375(1).

Y pursued a first appeal from the decision of District Judge Khan, to HHJ Hodge QC sitting as a Judge of the High Court. HHJ Hodge QC dismissed the appeal.

Permission for a Second Appeal was (unusually) granted by the Court of Appeal.

In the Court of Appeal, before Lady Justice Gloster (Vice President of the Court of Appeal, Civil Division) and Sir Patrick Elias, the Appeal was dismissed on all grounds.

Commenting on the case, Carly Sandbach said:

“This was the first appellate decision squarely to address the ambit and interaction of the powers to annul and to rescind a bankruptcy, under sections 282(1)(a) and 375(1) IA86, in the situation where the debt upon which the Bankruptcy Order was founded had been set aside subsequent to the Bankruptcy Order.”

“In summary, where a bankruptcy order had been founded on a liability order which was subsequently set aside, the appropriate application was for rescission under the Insolvency Act 1986 s.375(1), not for annulment under s.282(1)(a).”

Karen Troy from Exchange Chambers, instructed by QualitySolicitors Jackson Canter, appeared the third respondent, Joanne Sara Wright (the former Trustee in Bankruptcy of the Appellant).

The full judgment can be accessed here: http://www.bailii.org/ew/cases/EWCA/Civ/2017/1465.html