Jurisdiction(s):
United Kingdom

Exceptional Circumstances Still Permit Sale: Postponement Capped at 12 Months—Grant v Baker [2016], s335A Insolvency Act 1986 (England and Wales)

Published on: 28 July 2016

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Original news Grant and another v Baker and another [2016] EWHC 1782 (Ch), [2016] All ER (D) 108 (Jul)

The Chancery Division upheld an appeal by the trustees in bankruptcy, setting aside an order that would have delayed the sale of the bankrupt’s property for as long as his adult daughter, who suffered from global developmental delay, dyspraxia and obsessive compulsive disorder (OCD), continued to live there. The court agreed that the district judge had been right to find exceptional circumstances within section 335A of the Insolvency Act 1986 (IA 1986), recognising that such circumstances can include a situation where a bankrupt’s child has medical or mental health conditions and would be adversely affected by moving due to a sale. Nevertheless, it concluded that the judge had materially erred in discretion by imposing an open-ended postponement. The court instead directed a further delay of roughly 12 months before any sale should proceed. What practical lessons arise for advisers? It underlines that, although establishing exceptional circumstances is a necessary threshold to displace the presumption that creditors’ interests take priority over all else, the mere presence of exceptional...

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