Using Civil Restraint Orders in a bankruptcy case

9th October 2017

We acted for the Trustees of a bankrupt to take possession of the matrimonial home. At the time, this house was solely owned by the bankrupt; however, it had previously belonged to both the husband and wife. It was transferred into the bankrupt’s sole name approximately 2 years before the bankruptcy order was made.

The application for possession and sale was successful, however shortly afterwards, the bankrupt made various applications to appeal the order. He was unsuccessful and the client tried to enforce the order, by obtaining a warrant to instruct the High Court Enforcement Officer to carry out an eviction.

At this point, the bankrupt’s wife made an application to stay the execution of the warrant and asserted that she had interest in the property, arising from a deed of gift. This application was unsuccessful and was dismissed. The Registrar commented that it was totally without merit, but did not include this within the order.

The wife made several, failed attempts to apply to appeal this order, and her applications to appeal were dismissed. She then made a further application to assert that she had an interest in the property, again relying upon the same deed of gift. She was very inconsistent with her evidence; indeed she couldn’t even decide whether she had or had not signed the deed of gift within the same document.

That application was again dismissed on the basis that it was totally without merit. In view of the wife’s conduct, we made an application for a Limited Civil Restraint Order. We included a full chronology of events so that the court could understand the pattern of behaviour. The Limited Civil Restraint Order was granted.

However, unbeknownst to us or the Trustee, just before the hearing of the application for the Limited Civil Restraint Order, the wife had applied to join herself to proceedings issued in a different court, but which were again ultimately to assert that she was the only person entitled to the beneficial interest in the property. As this application had been made before the Limited Civil Restraint Order had been issued, it technically did not ‘bite’ and so her application could not be automatically dismissed.

However, we helpfully notified the second court of the Limited Civil Restraint Order, and the proceedings to date. The matter was immediately transferred to the bankruptcy court, to be dealt with the rest of the bankruptcy proceedings. The court listed a hearing to hear submissions as to whether or not the wife should be allowed to proceed with her application.

The Court decided that the wife was still trying to litigate matters which had already been decided, and that a Limited Civil Restraint Order was not appropriate. The Court therefore made an Extended Civil Restraint Order against the wife, which is to last for a period of 2 years.

Once the Extended Civil Restraint Order had been granted, this ended the wife’s outstanding applications to the court. We were therefore able to proceed with a sale of the property, which had been delayed for almost 5 years as a result of the conduct of the bankrupt and his wife.

If you have any queries about Civil Restraint Orders, or any other general insolvency related query, then please do not hesitate to contact any member of the Business Support and Restructuring team.

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