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Members of the IBR team in Southampton have
recently succeeded in some of the first applications to obtain an
extension of the three-year deadline imposed by s. 261
Enterprise Act 2002 / s.283A Insolvency Act 1986.
Background
There has been little or no statutory or
academic guidance as to the factors the court will take into
account when asked to extend time beyond three years. It was
anticipated, although there was no practice direction on the point,
that it would be sufficient to apply for an extension
before the three-year deadline, but given the particular facts of
the relevant cases, it was thought prudent to obtain orders before
the deadline, on the basis that they were urgent business.
Facts
We sought clarification from the court and
consequential orders in respect of a number of ongoing
matters. We were able to obtain 12-month extensions to the
re-vesting period.
In our cases, the relevant factors were:
- properties outside of the jurisdiction
- pending proceedings in other jurisdictions in
respect of these properties but these local enforcement proceedings
did not conform exactly with any of the five categories in
s283A(3)
- un-cooperative bankrupts
In collaboration with Jamie Riley of 11 Stone
Buildings, we were able to persuade not only the registrar but also
the High Court applications judge that it was appropriate to make
these extension orders, and to make them on the basis that they
were urgent business before the expiry of the primary re-vesting
time limit.
Implications for insolvency practitioners
Practitioners should be very slow to assume
that they will be able to obtain extensions,
particularly where the primary residence is located within England
and Wales, even if the bankrupt is un-cooperative. Whilst the
primary (s.261 EA) pre-commencement time limit has now passed it
must be remembered that s.283A IA applies to bankruptcies
commencing after 01.04.2004 and that similar considerations will be
relevant every time a 3-year time limit is approaching.
It is suggested by the authors that every IP
practising bankruptcy needs to have early warning systems in place
to alert them not only to the need to issue s.283A notices under
Insolvency Rule 6.137 in good time, but also to be instructing
solicitors to commence proceedings no later than three months
prior to the expiry of the three-year time limit.
For more information on this topic, please
contact Mike Pavitt or
Rachel Dannan of Blake
Lapthorn’ Insolvency and Business Recovery team.
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