Nationwide Building Society v Wright & Anor

Nationwide Building Society v Wright & Anor

The effect of section 346(1) of the Insolvency Act 1986 is that a creditor who has obtained a final charging order before the commencement of bankruptcy is entitled to retain the benefit of that order against the trustee in bankruptcy, and the court should not exercise its discretion under section 3(5) of the Charging Orders Act 1979 to discharge such an order solely by reason of the bankruptcy; the lower courts erred in failing to give effect to this legislative policy.

Parties
Appellant: Nationwide Building Society; Respondents: Wright and another
Jurisdiction
England and Wales
Judgment Date
29 July 2009
Procedural Posture
Civil Appeal / Appeal From Order of County Court Judge
Outcome
appeal allowed
Legal Topics
Charging Orders, Trustee in Bankruptcy, Execution Against Land, Discretion to Discharge Charging Order
Insolvency Bankruptcy Civil Procedure Charging Orders Trustee in Bankruptcy Execution Against Land Discretion to Discharge Charging Order

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Parties

Nationwide Building Society

Appellant

Wright and another

Respondents

Procedural Posture

Civil Appeal / Appeal From Order of County Court Judge

Legal Issues

  1. 1 Whether a creditor who has obtained a final charging order before the commencement of bankruptcy is entitled to retain the benefit of that order against the trustee in bankruptcy under section 346(1) of the Insolvency Act 1986, notwithstanding the discretionary power under section 3(5) of the Charging Orders Act 1979.

Ratio Decidendi

The effect of section 346(1) of the Insolvency Act 1986 is that a creditor who has obtained a final charging order before the commencement of bankruptcy is entitled to retain the benefit of that order against the trustee in bankruptcy, and the court should not exercise its discretion under section 3(5) of the Charging Orders Act 1979 to discharge such an order solely by reason of the bankruptcy; the lower courts erred in failing to give effect to this legislative policy.

Court Disposition

appeal allowed

Orders

  • Order of 16 May 2008 set aside
  • Order for costs made on 24 September 2008 set aside