Court unable to grant supporting creditor carriage of petition

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HMRC had presented a bankruptcy petition against the Appellant, and the Respondent was supporting creditor. Prior to the petition hearing, HMRC’s petition debt was paid in full by associates of the debtor.

The Respondent applied under IR10.29 for an order granting it carriage of the petition and had succeeded at first instance, and a bankruptcy order had been made accordingly.

On appeal, it was held that a payment of the petition debt made by a third party direct to the petitioning creditor did not amount to a disposition of the bankrupt's own property, but was a disposition of property made by some other person within IR10.29(3)(a).  Where the petition debt had been paid off by a third party and there had been no disposition of the debtor's own property, there was no reason to allow the supporting creditor to take advantage of the original petition date because, as of that date, they had no right to present their own petition.  The court was therefore precluded from ordering a change of carriage of the petition in favour of the supporting creditor and from making a bankruptcy order upon that petition.

IN THE MATTER OF DEREK THOMAS HOOD (A DEBTOR) sub nom DEREK THOMAS HOOD v JD CLASSICS LTD (In Administration) [2020]

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