Amanprit Kaur resists a debtor’s second application to rescind or annul a bankruptcy order founded on council tax liability orders despite invalid service of the notice of adjourned petition hearing.
This was the Applicant’s second application to rescind or annul a bankruptcy order on the same grounds; (1) notice of an adjourned petition hearing had not been delivered to him personally, but instead sent it to his direct access barrister and (2) the debt was disputed on substantial grounds. The first application was dismissed due to the debtor’s non-attendance. The Court entertained the second application to allow the application’s merits to be fully heard.
The Court accepted that, in the absence of evidence that the representative had authority to accept service, delivery of the notice in this manner was defective and resulted in the Applicant being deprived of the opportunity to attend the adjourned hearing.
The debtor’s legal representative submitted that the liability orders were disputed on the basis that the properties were not occupied by the debtor during the relevant periods and that an appeal was intended; however, the Court found that no appeal or application to set aside the orders had been made and that the time for applying to the Magistrates’ Court to set them aside had long since passed.
Appearing on behalf of a local authority, Amanprit Kaur resisted the application by submitting that annulment was a discretionary remedy and that any procedural defect had caused no material prejudice. The bankruptcy petition was founded on several Magistrates’ Court council tax liability orders, which the County Court had no jurisdiction to go behind save in the usual exceptional circumstances.
In considering whether the debtor’s loss of opportunity to attend the adjourned bankruptcy hearing justified relief, the Court applied the principles set out in Yang v Official Receiver [2017] EWCA Civ 1465, reaffirming that the bankruptcy court will not revisit statutory liability orders unless there is evidence of fraud or miscarriage of justice. The Court found that no bona fide appeal or application to set aside the liability orders was in existence at the time the bankruptcy order was made, nor had any such challenge been pursued despite the debt being longstanding.
Although the Court accepted that the Applicant had been deprived of the opportunity to attend the adjourned hearing, it held that attendance would not have altered the outcome. In the absence of a bona fide appeal or jurisdictional basis to challenge the debt, the procedural defect did not justify rescission or annulment.
The application was dismissed, costs were ordered as costs in the bankruptcy, and permission to appeal was refused.
The decision serves as a reminder that, even where service of an adjourned hearing is defective, the Court will focus on whether the debtor has been deprived of a substantive opportunity capable of affecting the outcome, and that annulment is unlikely to be granted where the underlying debt arises from unchallenged statutory liability orders.
