De Louville De Toucy v Bonhams 1793 Ltd

Summary: In this Chancery Division decision, a full transcript of which is not yet available, Vos J was asked to consider whether it was appropriate to make a bankruptcy order pursuant to the Insolvency Rules against a person who lacked capacity.

The Court held:

1. There was no inconsistency between the Insolvency Rules (defining an ‘incapacitated person’) and the CPR (defining a ‘protected party’). ‘Incapacity’ for the purposes of the Insolvency Rules covered not merely those falling within the definition of protected party within the CPR, but also included those suffering from a physical disability or affliction.
2. The Registrar should not have declared the claimant bankrupt: he ought to have:
a. been aware that the claimant was incapable;
b. adjourned the case for a representative or litigation friend to be appointed; and
c. heard representations from such a person.
3. On the evidence, the financial situation was complex and, without proper investigation, it was impossible to be sure that it was appropriate to make a bankruptcy order.

The order was set aside and the matter referred to the Registrar to be heard again.

Comment: As with the decision of District Judge Ashton noted in March 2011 edition, this is a clear reminder of the burden both upon parties and upon the Court in acting upon an indication that a party to bankruptcy proceedings may be incapable of engaging in the proceedings.