Session 2012 - 13
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Consideration of Bill: 16 October 2012                  

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Enterprise and Regulatory Reform Bill, continued

 
 

263M  

Making of bankruptcy order

 

(1)    

This section applies where an adjudicator makes a bankruptcy order as

 

a result of a bankruptcy application.

 

(2)    

The order must be made in the prescribed form.

 

(3)    

The adjudicator must—

 

(a)    

give a copy of the order to the debtor, and

 

(b)    

give notice of the order to persons of such description as may

 

be prescribed.

 

263N  

Refusal to make a bankruptcy order: review and appeal etc.

 

(1)    

Where an adjudicator refuses to make a bankruptcy order on a

 

bankruptcy application, the adjudicator must give notice to the

 

debtor—

 

(a)    

giving the reasons for the refusal, and

 

(b)    

explaining the effect of subsections (2) to (5).

 

(2)    

If requested by the debtor before the end of the prescribed period, the

 

adjudicator must review the information which was available to the

 

adjudicator when the determination that resulted in the refusal was

 

made.

 

(3)    

Following a review under subsection (2) the adjudicator must—

 

(a)    

confirm the refusal to make a bankruptcy order, or

 

(b)    

make a bankruptcy order against the debtor.

 

(4)    

Where the adjudicator confirms a refusal under subsection (3), the

 

adjudicator must give notice to the debtor—

 

(a)    

giving the reasons for the confirmation, and

 

(b)    

explaining the effect of subsection (5).

 

(5)    

If the refusal is confirmed under subsection (3), the debtor may appeal

 

against the refusal to the court before the end of the prescribed period.

 

263O  

False representations and omissions

 

(1)    

It is an offence knowingly or recklessly to make any false

 

representation or omission in—

 

(a)    

making a bankruptcy application to an adjudicator, or

 

(b)    

providing any information to an adjudicator in connection

 

with a bankruptcy application.

 

(2)    

It is an offence knowingly or recklessly to fail to notify an adjudicator

 

of a matter in accordance with a requirement imposed by or under this

 

Part.

 

(3)    

It is immaterial for the purposes of an offence under this section

 

whether or not a bankruptcy order is made as a result of the

 

application.

 

(4)    

It is not a defence in proceedings for an offence under this section that

 

anything relied on, in whole or in part, as constituting the offence was

 

done outside England and Wales.

 

(5)    

Proceedings for an offence under this section may only be instituted—

 

(a)    

by the Secretary of State, or


 
 

Consideration of Bill: 16 October 2012                  

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Enterprise and Regulatory Reform Bill, continued

 
 

(b)    

by or with the consent of the Director of Public Prosecutions.”

 

’.

 


 

Secretary Vince Cable

 

NS3

 

To move the following Schedule:—

 

‘Adjudicators: minor and consequential amendments

 

1          

The Insolvency Act 1986 is amended in accordance with this Schedule.

 

2          

In section 253 (application for interim order), omit subsection (5).

 

3          

In section 255 (cases in which interim order can be made), in subsection (1)(b)

 

for “petition for his own bankruptcy” substitute “make a bankruptcy

 

application”.

 

4    (1)  

Section 256A (debtor’s proposal and nominee’s report) is amended as follows.

 

      (2)  

In subsection (1) omit the words from “unless” to the end.

 

      (3)  

In subsection (3) for “petition for his own bankruptcy” substitute “make a

 

bankruptcy application”.

 

5          

For the heading to Chapter 1 of Part 9 substitute “The court: bankruptcy

 

petitions and bankruptcy orders”.

 

6          

In section 264 (who may present a bankruptcy petition), in subsection (1) omit

 

paragraph (b).

 

7          

For section 265 (conditions to be satisfied in respect of debtor) substitute—

 

“265  

Creditor’s petition: debtors against whom the court may make a

 

bankruptcy order

 

(1)    

A bankruptcy petition may be presented to the court under section

 

264(1)(a) only if—

 

(a)    

the centre of the debtor’s main interests is in England and

 

Wales, or

 

(b)    

the centre of the debtor’s main interests is not in a member

 

state of the European Union which has adopted the EC

 

Regulation, but the test in subsection (2) is met.

 

(2)    

The test is that—

 

(a)    

the debtor is domiciled in England and Wales, or

 

(b)    

at any time in the period of three years ending with the day on

 

which the petition is presented, the debtor—

 

(i)    

has been ordinarily resident, or has had a place of

 

residence, in England and Wales, or

 

(ii)    

has carried on business in England and Wales.

 

(3)    

The reference in subsection (2) to the debtor carrying on business

 

includes—

 

(a)    

the carrying on of business by a firm or partnership of which

 

the debtor is a member, and

 

(b)    

the carrying on of business by an agent or manager for the

 

debtor or for such a firm or partnership.


 
 

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Enterprise and Regulatory Reform Bill, continued

 
 

(4)    

In this section, references to the centre of the debtor’s main interests

 

have the same meaning as in Article 3 of the EC Regulation.”

 

8          

In section 266 (bankruptcy petitions: other preliminary conditions), in

 

subsection (4) omit “, (b)”.

 

9    (1)  

Sections 272 to 274A (and the cross-heading immediately preceding those

 

sections) (debtor’s petition) are repealed.

 

      (2)  

In consequence of the repeal of section 274A by paragraph (1), omit paragraph

 

3 of Schedule 20 to Tribunals Courts and Enforcement Act 2007 (debt relief

 

Orders: consequential amendments).

 

10         

For the cross-heading immediately before section 278 substitute—

 

“Chapter 1A

 

Commencement and duration of bankruptcy”.

 

11         

In section 278 (commencement and continuance), in paragraph (b) (discharge

 

of bankruptcy order) omit “the following provisions of”.

 

12         

In section 279 (duration of bankruptcy), in subsection (6) for “adjudged”

 

substitute “made”.

 

13         

In section 282 (court’s power to annul bankruptcy order), in subsection (2)—

 

(a)    

omit “, (b)”,

 

(b)    

after “section 264(1)” insert “or on a bankruptcy application”, and

 

(c)    

in paragraph (a) after “pending” insert “or the application was

 

ongoing”.

 

14         

In section 283 (definition of bankrupt’s estate), in subsection (5)(a) for

 

“adjudged” substitute “made”.

 

15  (1)  

Section 284 (restrictions on dispositions of property) is amended as follows.

 

      (2)  

In subsection (1) for “adjudged” substitute “made”.

 

      (3)  

In subsection (3) for “presentation of the petition for the bankruptcy order”

 

substitute “making of the bankruptcy application or (as the case may be) the

 

presentation of the bankruptcy petition”.

 

      (4)  

In subsection (4), in paragraph (a) before “petition” insert “bankruptcy

 

application had been made or (as the case may be) that the bankruptcy”.

 

16  (1)  

Section 285 (restriction on proceedings and remedies) is amended as follows.

 

      (2)  

In subsection (1)—

 

(a)    

after “when” insert “proceedings on a bankruptcy application are

 

ongoing or”, and

 

(b)    

for “adjudged” substitute “made”.

 

      (3)  

In subsection (2) after “proof that” insert “a bankruptcy application has been

 

made or”.

 

17  (1)  

Section 286 is amended as follows.

 

      (2)  

Omit subsection (2).

 

      (3)  

In subsection (8), for “adjudged” substitute “made”.

 

18         

In section 288 (statement of affairs), in subsection (1) for “debtor’s petition”

 

substitute “bankruptcy application”.

 

19         

In section 290 (public examination of bankrupt), in subsection (4)(a) for

 

“adjudged” substitute “made”.

 

20  (1)  

Section 297 (appointment of trustee of bankrupt’s estate: special cases) is

 

amended as follows.

 

      (2)  

Omit subsection (4).

 

      (3)  

In subsection (6) omit “(4) or”.


 
 

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21  (1)  

Section 320 (court order vesting disclaimed property) is amended as follows.

 

      (2)  

In subsection (2)(c) before “bankruptcy” insert “bankruptcy application was

 

made or (as the case may be) the”.

 

      (3)  

In subsection (3)(c) before “bankruptcy” insert “bankruptcy application was

 

made or (as the case may be) the”.

 

22         

In section 321 (orders under section 320 in respect of leaseholds), in subsection

 

(1)(a) before “bankruptcy” insert “bankruptcy application was made or (as the

 

case may be) the”.

 

23         

In section 323 (mutual credit and set-off), in subsection (3) before “a

 

bankruptcy” insert “proceedings on a bankruptcy application relating to the

 

bankrupt were ongoing or that”.

 

24         

In section 334 (stay of distribution in case of second bankruptcy), in subsection

 

(2) before “presentation of the petition” insert “making of the application or (as

 

the case may be) the”.

 

25  (1)  

Section 336 (rights of occupation etc of bankrupt’s spouse or civil partner) is

 

amended as follows.

 

      (2)  

In subsection (1) for “presentation of the petition for the bankruptcy order”

 

substitute “making of the bankruptcy application or (as the case may be) the

 

presentation of the bankruptcy petition”.

 

      (3)  

In subsection (2) for “adjudged” substitute “made”.

 

26         

In section 337 (rights of occupation of bankrupt), in subsection (1)—

 

(a)    

in paragraph (a) for “adjudged” substitute “made”, and

 

(b)    

in paragraph (b) before “bankruptcy petition” insert “bankruptcy

 

application was made or (as the case may be) the”.

 

27         

In section 339 (transactions at an undervalue), in subsection (1) for “adjudged”

 

substitute “made”.

 

28         

In section 340 (preferences), in subsection (1) for “adjudged” substitute

 

“made”.

 

29         

In section 341 (meaning of “relevant time” under sections 339 and 340), in

 

subsection (1)(a) for “presentation of the bankruptcy petition on which the

 

individual is adjudged” substitute “making of the bankruptcy application as a

 

result of which, or (as the case may be) the presentation of the bankruptcy

 

petition on which, the individual is made”.

 

30  (1)  

Section 342 (orders under sections 339 and 340) is amended as follows.

 

      (2)  

In subsection (1) for “adjudged” substitute “made”.

 

      (3)  

In subsection (5)—

 

(a)    

for paragraph (a) substitute—

 

“(a)    

of the fact that the bankruptcy application as a result

 

of which, or (as the case may be) the bankruptcy

 

petition on which, the individual in question is made

 

bankrupt has been made or presented; or”, and

 

(b)    

in paragraph (b) for “adjudged” substitute “made”.

 

31         

In section 342A (recovery of excessive pension contributions), in subsection

 

(1) for “adjudged” substitute “made”.

 

32         

In section 343 (extortionate credit transactions), in subsection (1) for

 

“adjudged” substitute “made”.

 

33  (1)  

Section 344 (avoidance of general assignment of book debts) is amended as

 

follows.

 

      (2)  

In subsection (1) for “adjudged” substitute “made”.

 

      (3)  

In subsection (2) before “presentation” insert “making of the bankruptcy

 

application or (as the case may be) the”.


 
 

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Enterprise and Regulatory Reform Bill, continued

 
 

34         

In section 345 (contracts to which bankrupt is a party), in subsection (1) for

 

“adjudged” substitute “made”.

 

35  (1)  

Section 346 (enforcement procedures) is amended as follows.

 

      (2)  

In subsections (1) and (2) for “adjudged” substitute “made”.

 

      (3)  

In subsection (3)—

 

(a)    

in paragraph (b) before “bankruptcy” insert “bankruptcy application

 

has been made or a”, and

 

(b)    

in paragraph (c) before “on that petition” insert “as a result of that

 

application or”.

 

      (4)  

In subsection (4)(a) after “while” insert “proceedings on a bankruptcy

 

application are ongoing or (as the case may be)”.

 

36  (1)  

Section 347 (distress, etc) is amended as follows.

 

      (2)  

In subsection (2)—

 

(a)    

after “individual to whom” insert “a bankruptcy application or”, and

 

(b)    

before “on that petition” insert “as a result of that application or”.

 

      (3)  

In subsection (3) for “adjudged” substitute “made”.

 

37         

In section 348 (apprenticeships, etc), in subsection (1)(a) for “petition on

 

which the order was made” substitute “application for the order was made or

 

(as the case may be) the petition for the order”.

 

38         

In section 350 (application of Chapter 6 of Part 9: bankruptcy offences), in

 

subsection (1) after “applies” insert “—

 

(a)    

where an adjudicator has made a bankruptcy order as a result

 

of a bankruptcy application, or

 

(b)    

”.

 

39  (1)  

Section 351 (definitions for the purposes of Chapter 6 of Part 9) is amended as

 

follows.

 

      (2)  

In paragraph (b) before “presentation” insert “making of the bankruptcy

 

application or (as the case may be) the”.

 

      (3)  

Omit paragraph (c), and the preceding “and”.

 

40  (1)  

Section 354 (concealment of property) is amended as follows.

 

      (2)  

In subsection (1)(c) before “petition” insert “the making of the bankruptcy

 

application or (as the case may be) the presentation of the bankruptcy”.

 

      (3)  

In subsection (3)(a) before “petition” insert “the making of the bankruptcy

 

application or (as the case may be) the presentation of the bankruptcy”.

 

41  (1)  

Section 355 (concealment of books and papers; falsification) is amended as

 

follows.

 

      (2)  

In subsection (2)(d) before “petition” insert “the making of the bankruptcy

 

application or (as the case may be) the presentation of the bankruptcy”.

 

      (3)  

In subsection (3)(b) before “petition” insert “the making of the bankruptcy

 

application or (as the case may be) the presentation of the bankruptcy”.

 

42         

In section 356 (false statements), in subsection (2)(c) before “petition” insert

 

“the making of the bankruptcy application or (as the case may be) the

 

presentation of the bankruptcy”.

 

43         

In section 358 (absconding), in paragraph (b) before “petition” insert “the

 

making of the bankruptcy application or (as the case may be) the presentation

 

of the bankruptcy”.

 

44  (1)  

Section 359 (fraudulent dealing with property obtained on credit) is amended

 

as follows.

 

      (2)  

In subsection (1) before “petition” insert “the making of the bankruptcy

 

application or (as the case may be) the presentation of the bankruptcy”.


 
 

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      (3)  

In subsection (2) before “petition” insert “the making of the bankruptcy

 

application or (as the case may be) the presentation of the bankruptcy”.

 

45         

In section 360 (obtaining credit and engaging in business), in subsection (1)(b)

 

for “adjudged” substitute “made”.

 

46  (1)  

Section 364 (power of arrest) is amended as follows.

 

      (2)  

In subsection (1)(a) after “to whom a” insert “bankruptcy application or a”.

 

      (3)  

In subsection (2) before “presentation” insert “making of the bankruptcy

 

application or the”.

 

47         

In section 376 (time limits), after “anything” insert “(including anything in

 

relation to a bankruptcy application)”.

 

48  (1)  

Section 381 (definition of “bankrupt” and associated terminology) is amended

 

as follows.

 

      (2)  

In subsection (1) for “adjudged” (in both places where it occurs) substitute

 

“made”.

 

      (3)  

After subsection (1) insert—

 

“(1A)    

“Bankruptcy application” means an application to an adjudicator for a

 

bankruptcy order.”

 

      (4)  

In subsection (2) for “adjudging” substitute “making”.

 

49         

In section 383 (definition of “creditor” etc.), in subsection (1)(b)—

 

(a)    

after “to whom a” insert “bankruptcy application or”, and

 

(b)    

after “that” insert “application or”.

 

50         

In section 384 (definitions of “prescribed” and “the rules”), in subsection (1)

 

omit “section 273;”.

 

51         

In section 385 (miscellaneous definitions), in subsection (1)—

 

(a)    

before the definition of “the court” insert—

 

““adjudicator” means a person appointed by the Secretary of State

 

under section 398A;”,

 

(b)    

in the definition of “the debtor”, in paragraph (b)—

 

(i)    

before “bankruptcy petition” insert “bankruptcy application

 

or a”, and

 

(ii)    

after “to whom the” insert “application or”,

 

(c)    

omit the definition of “debtor’s petition”, and

 

(d)    

before the definition of “dwelling house” insert—

 

“determination period” has the meaning given in section 263K(4);”.

 

52         

In section 387 (meaning of “the relevant date”), in subsection (6)(a) after

 

“after” insert “the making of the bankruptcy application or (as the case may

 

be)”.

 

53         

In section 389A (authorisation of nominees and supervisors), in subsection

 

(3)(a) for “adjudged” substitute “made”.

 

54         

In section 390 (persons not qualified to act as insolvency practitioners), in

 

subsection (4)(a) for “adjudged” substitute “made”.

 

55         

In section 415 (fees orders), after subsection (1) insert—

 

“(1A)    

An order under subsection (1) may make different provision for

 

different purposes, including by reference to the manner or form in

 

which proceedings are commenced.”

 

56         

In section 421A (insolvent estates: joint tenancies), in subsection (9) in the

 

definition of “value lost to the estate”, for “adjudged” substitute “made”.

 

57         

In section 424 (who may apply for an order under section 423 in respect of

 

transactions entered into at an undervalue), in subsection (1)(a) for “adjudged”

 

substitute “made”.


 
 

Consideration of Bill: 16 October 2012                  

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Enterprise and Regulatory Reform Bill, continued

 
 

58         

In Schedule 4ZA (conditions for making a debt relief order), for paragraph 3

 

substitute—

 

“3         

A bankruptcy application under Part 9—

 

(a)    

has not been made before the determination date; or

 

(b)    

has been so made, but proceedings on the application have

 

been finally disposed of before that date.”

 

59  (1)  

In Schedule 4A (bankruptcy restrictions orders), paragraph 2 is amended as

 

follows.

 

      (2)  

In sub-paragraph (2)—

 

(a)    

in paragraph (a), for the words from “petition” to the end substitute

 

“the making of the bankruptcy application or (as the case may be) the

 

presentation of the bankruptcy petition and ending with the date of the

 

application for the bankruptcy restrictions order”, and

 

(b)    

in paragraph (j), for “presentation of the petition” substitute “the

 

making of the bankruptcy application or (as the case may be) the

 

presentation of the bankruptcy petition”.

 

      (3)  

In sub-paragraph (4) omit the definition of “before petition”.

 

60         

In Schedule 6 (categories of preferential debts), in paragraph 14(1) for

 

“adjudged” substitute “made”.

 

61  (1)  

Schedule 9 (provisions capable of inclusion in individual insolvency rules) is

 

amended as follows.

 

      (2)  

After paragraph 4 insert—

 

“Adjudicators

 

4A         

Provision for regulating the practice and procedure of adjudicators.

 

4B         

Provision about the form and content of a bankruptcy application

 

(including an application for a review of an adjudicator’s

 

determination).”

 

      (3)  

After paragraph 4B (as inserted by sub-paragraph (2)) insert—

 

“Appeals against determinations by adjudicators

 

4C         

Provision about the making and determining of appeals to the court

 

against a determination by an adjudicator, including provision—

 

(a)    

enabling the court to make a bankruptcy order on such an

 

appeal, and

 

(b)    

about where such appeals lie.”

 

      (4)  

After paragraph 24 insert—

 

“24A      

Provision requiring official receivers—

 

(a)    

to keep files and other records relating to bankruptcy

 

applications, and

 

(b)    

to make those files and records available for inspection by

 

persons of a prescribed description.”

 

62  (1)  

In the Table in Schedule 10 (punishment of offences), insert the following

 

entry after the entry relating to section 262A(1)—


 
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