Yang v Official Receiver and others

Bankruptcy – Bankruptcy order. The subsequent setting aside of council tax liability orders was not a ground for the annulment of a bankruptcy order made in respect of the appellant. So ruled the Court of Appeal, Civil Division, in dismissing the applicant's appeal against a judge's order upholding a district judge's decision by which he had dismissed her application to annul a bankruptcy order. That order had been made on a petition by the second respondent local authority. The appellant had argued that the bankruptcy order should be annulled because, whilst the liability orders had been extant at the time of the bankruptcy order, they had subsequently been set aside. The Court of Appeal held, among other things, that the lower courts had correctly concluded that the statutory demand relating to the liability orders had properly been served. Further, it held that the only sensible interpretation of s 282(1)(a) of the Insolvency Act 1986 was that reg 49(1) of the Council Tax (Administration and Enforcement) Regulations 1992, SI 1992/613, deemed the liability orders to constitute a legally enforceable debt, regardless of the underlying factual position relating to the relevant property, unless and until those orders were set aside, under the specific statutory procedure laid down for doing so. The court ruled that a bankruptcy court should not go behind liability orders, except in the event of fraud or some miscarriage of justice and held that, since the liability orders in the present case had not been set aside at the date that the bankruptcy order had been made, the effect of reg 49(1) of the 1992 Regulations, was, statutorily, to deem them as constituting a legally enforceable debt from the time they had been made, until the time they had been set aside. Accordingly, the bankruptcy order had correctly been made and the power to annul, under s 282(1)(a) of IA 1986, had not been engaged.

Category: