Bankruptcy Order Made Against Alzheimer's Disease Sufferer Overturned

• Published date: 25 May 2021
• Subject Matter: Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy
• Law Firm: Moon Beever
• Author: Mr Graham McPhie

On allowing an appeal against a bankruptcy order, the High Court emphasised that if there is evidence of incapacity on the part of a litigant the procedure under CPR 21 is engaged so that a litigation friend must be appointed. The failure by the first instance court in dealing with that issue meant that the bankruptcy order had to be set aside.

There were two issues that the appeal court had to deal with in this case. The first was that, at the me of the hearing of the petition, there was a previous issued peon that was waiting to be heard. However, neither the District Judge nor the Petitioner could have known about that peon as it was issued against the same person but with a slightly different spelling of his surname. It would not have been revealed in any search. The court considered that this was not an issue that need concern it because the proper process to deal with that was either an application to annul under section 282(1) Insolvency Act 1986 or an application for review under section 375 of the Act. Neither of those applications were relevant to the issue on appeal.

What did matter was the fact that, prior to the hearing, possibly the debtor's daughter had sent an unsigned leer to the court stating that her father was suffering from Alzheimer's disease, had a further consultant's appointment atter the hearing date and could not attend court because of his poor state of health. The court was asked to adjourn the hearing. Attached to that leer was some medical evidence supporting the diagnosis of Alzheimer's disease and the consultant's appointment.

The debtor's GP had also written a leer stating that the debtor had been diagnosed with dementia a few years earlier, lacked capacity to attend court and lacked the ability to retain information.

The response from the petitioner's lawyers was that there was no clear evidence before the court that the debtor could not attend court, the leer was unsigned and it was not a formal application for an adjournment. At the hearing, counsel for the petitioner also stated that it was not completely clear from the evidence that the debtor was incapable of attending court or standing in opposition to the peon. Further, this was not a formal trial in which there would be any need for evidence to be given or for cross-examination. The debtor's illness was said not to be strictly relevant to the formal application and there was no need for him to be present.

The District Judge made the bankruptcy order because the...