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Insolvency Rules - Disclaimer

Disclaimer - Rules 19.1 - 19.11

The Rules relating to Disclaimer remain largely unchanged, except for bankruptcy and liquidation being included in the same section and some minor updates to the Act. These are incorporated in Rule 19.8, and affect s.307 and s.320 Insolvency Act 1986. The deadlines for all actions remain unchanged. 

19.8 - Application for permission to disclaim in bankruptcy (section 315(4))

The notes in this section refer to changes within the Act as amended by the Deregulation Act 2015 and the Enterprise and Regulatory Reform Act 2013. Changes to the Act are highlighted below. 

  • Rule 19.8 s(1): This rule applies where section 315(4) requires the trustee to obtain the court's permission to disclaim property claimed for the bankrupt's estate under section 307 [our emphasis] or 308.

Notes to Rules: Paragraph 16 of Schedule 6 to the Deregulation Act 2015 (c.20) amends section 307 subsections (3) and (4)(a) and (c), omits subsection (4)(b) and inserts new subsection (4A).

Revisions to Insolvency Act 1986, as amended by the Deregulation Act 2015:

Section 307:
(3) [Subject to subsections (4) and (4A)], upon the service on the bankrupt of a notice under this section the property to which the notice relates shall vest in the trustee as part of the bankrupt's estate; and the trustee's title to that property has relation back to the time at which the property was acquired by, or devolved upon, the bankrupt.
(4) Where, whether before or after service [on the bankrupt] of a notice under this section—
(a) a person acquires property in good faith, for value and without notice of the bankruptcy, [...] the trustee is not in respect of that property [...] entitled by virtue of this section to any remedy against that person [...], or any person whose title to any property derives from that person [...].
[(4A) Where a banker enters into a transaction before service on the banker of a notice under this section (and whether before or after service on the bankrupt of a notice under this section) the trustee is not in respect of that transaction entitled by virtue of this section to any remedy against the banker.] This subsection applies whether or not the banker has notice of the bankruptcy.

  • Rule 19.8 s(5): The court may grant the permission, and may, before doing so—

(a) order that notice of the application be delivered to all such persons who, if the property is disclaimed, will be entitled to apply for a vesting or other order under section 320 [our emphasis]; and (b) fix a venue for the hearing of the application.

Notes to the Rules: Section 320 subsections (2)(c) and (3)(c) are amended by paragraph 25 of Schedule 19 to the Enterprise and Regulatory Reform Act 2013 (c.24).

Revisions to Insolvency Act 1986, as amended by the Enterprise and Regulatory Reform Act 2013:

Section 320: 
(2) An application may be made to the court under this section by—
(a) any person who claims an interest in the disclaimed property,
(b) any person who is under any liability in respect of the disclaimed property, not being a liability discharged by the disclaimer, or
(c) where the disclaimed property is property in a dwelling house, any person who at the time when the [bankruptcy application was made or (as the case may be) the] bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house.
(3) Subject as follows in this section and the next, the court may, on an application under this section, make an order on such terms as it thinks fit for the vesting of the disclaimed property in, or for its delivery to—
(a) a person entitled to it or a trustee for such a person,
(b) a person subject to such a liability as is mentioned in subsection (2)(b) or a trustee for such a person, or
(c) where the disclaimed property is property in a dwelling house, any person who at the time when the [bankruptcy application was made or (as the case may be) the] bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house.