West Law Report

Power to replace trustee

Posted in Times Law Report by mrkooenglish on October 18, 2008

From The TimesOctober 6, 2008

Power to replace trustee
Court of Appeal
Published October 6, 2008
Donaldson v O’Sullivan (Official Receiver intervening)

The court had power under the Insolvency Act 1986 to appoint a replacement trustee in bankruptcy following the removal of a person from that office under section 298 of that Act, without a creditors’ meeting.

The Court of Appeal (Lord Justice Ward, Lord Justice Dyson and Lord Justice Lloyd) so held on July 30, 2008, when dismissing the appeal of the applicant, Angela Mary Donaldson, a former bankrupt, from Judge Havelock-Allan, QC, who, sitting as a Chancery Division judge at Bristol, on February ([2008] BPIR 288), refused her application to set aside a block transfer order which had been obtained by a replacement trustee in bankruptcy, Anthony O’Sullivan, who had been appointed when a former trustee applied to the court to be removed from office and for a replacement to be appointed.

LORD JUSTICE LLOYD said that section 303(2) of the 1986 Act conferred power on the court to appoint a new trustee in bankruptcy, which it could exercise to replace a trustee removed under section 298.

The court was not precluded from using its general powers in relation to bankruptcy or, as the case might be, compulsory liquidation, to appoint a new trustee in bankruptcy or liquidator upon removing such an officeholder under section 298 or section 172.

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