Drowning in debt

The High Court held that personal service of a bankruptcy petition on a person nominated by the debtor in his presence and at his direction constituted valid personal service. Even if that were not the case, the irregularity of serving   a bankruptcy petition as detailed above caused no injustice given that the debtor knew that he was being served with a bankruptcy petition and had attended a meeting with the process server for that purpose. It was therefore appropriate to waive any defect of service.[1]

The circumstances

The case was unusual in that the creditor made an appointment with the debtor to serve him with the bankruptcy petition at an airport, before the debtor flew out of the jurisdiction. The debtor attended the meeting with a third party agent who he had instructed to take the petition. The delivery of the bankruptcy petition was therefore in the debtor’s presence and the agent immediately read out the contents to him remarking that the debtor’s address had been misspelled. The agent then placed the bankruptcy petition in the  bin when the process server refused to accept it back. The petitioning creditor subsequently emailed an amended bankruptcy petition to the debtor the next day.

The Court remarked that the Insolvency Rules Committee may wish to consider making an amendment to the Insolvency Rules 1986 to permit the application of Civil Procedure Rule 6.15(2) (i.e. the power of the Court to validate alternative service already undertaken) to service in insolvency proceedings or otherwise provide the Court with a tailored power to order retrospective substituted service to prevent abuse of the service provisions reducing Court time and expense.

This post was edited by Nadine Herman. For more information, email blogs@gateleyplc.com.

[1] Insolvency Rule 7.55

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.