Key Facts
- •Mr. Mohammad Khan was made bankrupt on a petition by Habib Bank AG Zurich (the Bank).
- •The petition debt was disputed, and the petition incorrectly stated the debt was unsecured (the Bank held security).
- •DJ Hart dismissed Mr. Khan's annulment application, despite finding the bankruptcy order should not have been made on two grounds.
- •Mr. Khan appealed to the High Court, which also dismissed the appeal.
- •Mr. Khan appealed to the Court of Appeal.
- •Mr. Khan's company, Geno Services Ltd, was struck off the register in 2015.
- •The Bank extended facilities to Geno and Mr. Khan personally, secured by a guarantee signed by Mr. Khan.
- •A statutory demand was served on Mr. Khan in 2016, followed by a bankruptcy petition.
- •Mr. Khan was made bankrupt in 2018.
- •Mr. Khan's conduct involved a lack of cooperation with the Official Receiver and Trustee.
Legal Principles
Court's power to annul a bankruptcy order under s. 282(1)(a) Insolvency Act 2016.
Insolvency Act 2016, s. 282(1)(a)
Requirement for a liquidated sum in a creditor's petition (s. 267(2)(b) IA 1986).
Insolvency Act 1986, s. 267(2)(b)
Creditor with security (s. 269 IA 1986).
Insolvency Act 1986, s. 269
Effect of annulment on limitation periods for provable debts.
Case law (discussed but not definitively decided)
Jurisdiction of the Court to make a bankruptcy order in cases where the debt is disputed.
Case law (including Owo-Samson v Barclays Bank plc (No. 1) [2023] EWCA Civ 1119)
Outcomes
Appeal dismissed.
The Court of Appeal found that the lower courts did not err in their application of the law and exercise of discretion. The Court had jurisdiction to hear the petition despite the disputed debt and the Bank's failure to disclose security. The appellant's solvency and conduct were relevant factors in refusing annulment. The limitation question was not definitively decided.