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Our dispute resolution team played a pivotal part in insolvency law precedent

05.12.2017 Commercial Disputes, Personal Litigation

Last week saw a first for the Administrative Court regarding the procedure in which an application was made by a Trustee in Bankruptcy. The case of Simmonds v Pearce [2017] EWHC 3126 ended in the approved judgment of the Divisional Court following the first application for committal to prison based on the ‘Certification Procedure’ under CPR 81.15.

Our dispute resolution team was instructed by Nicholas Simmonds, trustee in bankruptcy of the Respondent Mr Albert Pearce, who was accused for deliberate, repeated and serious breaches of his obligations under the Insolvency Act 1986 (including his failure to provide a full account of his financial affairs). The case raised an important issue surrounding the correct procedure to adopt for committal applications in the context of breaches of the Insolvency Act. It also provided clarification on the admissibility of statements made in public examinations in subsequent proceedings.

Following this case, the Judges, Lady Justice Gloster and Mrs Justice Andrews, recommended that CPR 81 be given early consideration by the Rules Committee as to its interpretation and practical application in the future. It was also the first time that an application for committal has been lodged in the Administrative Court in respect of breaches of these statutory provisions using the procedure in CPR 81.15.

The Judges acceded the application and granted an immediate custodial sentence on Mr Pearce of 12 months in Pentonville prison (six months served inside and six months on licence). The Judges commented that this was “the clearest possible case of deliberate and calculated non-cooperation with the trustee” and that it was an “extremely serious case of contempt of court covering a wide range of reprehensible conduct”.

The team was led by Julie Killip, Partner and Sarah Townsend, Associate.