Key Facts
- •Malcolm Cohen and Shane Crooks (Joint Administrators of James Donald Hanson's estate) and Creditforce Ltd. are judgment creditors of William Stephen O'Leary.
- •They obtained a Jersey judgment against O'Leary for £32,666,771 for breach of trust.
- •This judgment was registered in the King's Bench Division.
- •O'Leary subsequently went bankrupt; his bankruptcy is expected to be discharged on 21 July 2023.
- •Applicants sought permission under s.285(3) Insolvency Act 1986 to pursue O'Leary's pension after bankruptcy discharge.
- •The application included requests for information about O'Leary's pension and a “Bacci v Green” style order to control its disbursement.
- •O'Leary's trustees in bankruptcy stated his pension was outside the bankruptcy estate.
Legal Principles
Section 285(3) Insolvency Act 1986 requires court leave to commence proceedings against a bankrupt before discharge.
Insolvency Act 1986, s.285(3)
Discharge from bankruptcy releases the bankrupt from all bankruptcy debts, except those incurred through fraud or fraudulent breach of trust (s.281(3)).
Insolvency Act 1986, s.281(3)
The court has discretion to grant “Bacci v Green” type orders to allow judgment creditors to access assets of discharged bankrupts to satisfy debts surviving bankruptcy.
Bacci v Green [2023] Ch 201
Outcomes
Permission granted under s.285(3) Insolvency Act 1986 to bring the application.
The relief sought does not affect bankruptcy assets or the rights of other creditors. Permission can be granted retrospectively, and there was no prejudice to the bankruptcy process.
O'Leary's judgment debt survives bankruptcy discharge.
The Jersey judgment established liability for fraudulent breach of trust, satisfying s.281(3). The wording of the order doesn't negate the finding of fraud within the judgment itself.
The 'Bacci v Green' type relief was adjourned.
Insufficient information was available about O'Leary's pension scheme to make a just and convenient order immediately. An undertaking was obtained from O'Leary to not dispose of pension assets until further order. The matter was adjourned to the Business List.
Order granted for alternative service of documents on O'Leary by email.
Evidence showed difficulties serving O'Leary traditionally, he had previously corresponded via email, and his representative didn't object.