Jurisdiction(s):
United Kingdom

IA 1986 s 375 clarified in Sands v Layne: appellate review power, trustee joinder, and s 271(3) dismissal despite other creditors (England and Wales)

Published on: 02 February 2017

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Original news Sands (as trustee in bankruptcy of the estate of Layne (a bankrupt)) v Layne and another [2016] EWCA Civ 1159, [2016] All ER (D) 160 (Nov)

The Court of Appeal, Civil Division, upheld the trustee in bankruptcy’s challenge and determined that Insolvency Act 1986, s 375(1) empowers a court to revisit, set aside or amend an order it has previously made while exercising its appellate jurisdiction over a decision from a lower court. What lessons of practical value should practitioners draw from this ruling? The ruling in Sands v Layne refines the boundaries of the jurisdiction under s 375(1) to review, rescind or vary orders within the relevant Parts of the Insolvency Act 1986 dealing with personal insolvency. It also examines when a bankrupt’s trustee and other creditors should be added as parties to any application seeking to rescind a bankruptcy order. These conclusions flow directly from the appellate court’s reasoning and the outcome reached in the case, as set out above. Section 375(1) states that any court with jurisdiction for the purposes of the Parts in this group may review, rescind or vary any order made by it in the exercise of that jurisdiction. That provision is...

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