Friday, 30 April 2010

Cork Materials: Competing Interests of Spouses and Creditors: Minutes of the Meeting of the Working Group (14/02/1980)


The minutes of the fourth meeting of the Working Group 2 of the Insolvency Law Review Committee constitute a remarkable prescient memorandum on the development and convergence of the claims of spouses and creditors to legal and beneficial interests in the insolvent’s matrimonial home, as well as the inevitable conflict between the Family Division and the Insolvency Court. It is surprising that the views of the members indicate the most equitable outcomes in the most probable cases yet it took Courts more than a decade to appreciate the importance of the family home to the debtor’s family’s physical and emotional wellbeing. Mr Goldman of the Working Group had advised that priority should be given to the family but a distinction should be made between the spouse and dependent children given that the former may be involved in the events leading up to the insolvency. Mr Taylor agreed but posited that the rights of the children should be the primary concern and it was important to have guidelines for discretion for their protection for a reasonable period during which the insolvent could make suitable alternative arrangements.


Nonetheless, the primary concern of the Insolvency Act 1986 was the rights of creditors and cases like Re Citro (Bankrupts) [1991] Ch. 142, C.A. showed little understanding of the innocent family’s predicament. It is true that the Insolvency Law Review Committee’s recommendation of a reasonable period for suitable alternative arrangements was sanctioned with a one-year-reprieve following the appointment of a trustee, which may be extended in “exceptional circumstances.” However, the family’s suffering was not remitted because the term “exceptional” was held not to include a “distressing” predicament: Re Citro (Bankrupts). Equally, the innocent family’s predicament was given little consideration where the power conferred by section 73(3) of the Matrimonial Causes Act 1973 to a wife to set aside dispositions such as those of a husband that had sought to defeat her rights by disposing property was deemed not to apply to a charge of the bank that provided the money for the purchase of the property; although the bank was fully aware of the wife’s rights: Ansari v Ansari (Bank of Scotland plc intervening) [2008] ECWA Civ 1456. Equally, a trustee was allowed to enforce a trust for sale of a family home held jointly by a couple under a property adjustment order made twenty years earlier: Turner and Another v Avis (2007) Times Law Reports. Nonetheless, it would be unfair to say that decisions have always been detrimental to the innocent family. Lewis and another v Metropolitan Property Realisations Ltd [2009] EWCA Civ 448 ordained that "a bankrupt's interest in property that had formally vested jointly in him and his wife revested in him on the third anniversary of his bankruptcy despite his trustee in bankruptcy having assigned that interest to a creditor." In Everitt v Budhram (a bankrupt) and another [2009] WLR (D) 167, it was held that the "needs" of a bankrupt under section 355A (2) of the Insolvecy Act 1986 include “financial, medical, emotional and mental needs.” The Home Owner and Debtor Protection (Scotland) Bill introduced in the Scottish Parliament on the 1st of October 2009 will also restrict the creditor’s rights to sell or enter into possession of security subjects only to cases where the residential property has been voluntarily surrendered (an affidavit will be required to this effect).


The convergence of the claims of spouses and creditors to legal and beneficial interests in the insolvent’s matrimonial home and the inevitable conflict between the Family Court and the Insolvency Court discussed by members of the Working Group materialised in Hill and another v Haines [2007] EWHC 1012 (Ch). Following divorce proceedings, an Order was made transferring the family home to the wife. The husband subsequently became bankrupt and the trustee argued that the transfer was at an undervalue and sought to restore the parties to the position they would have been had the transaction not been made. The District Judge disagreed with the trustee but surprisingly he received a statement of acquiescence from the High Court. There was a disquieting conflict between the Family Court’s prerogative to ensure that parties to a marriage receive an equitable share of the property and that of the Insolvency Court to protect the interests of the creditors. An incidental question to this issue is that of whether the contributions made by one spouse to the emotional and mental wellbeing of the other spouse do not constitute sufficient consideration? One also wonders whether the Insolvency Act is impervious to the rights of innocent family members. It may be important to make a survey of families affected by bankruptcy in order to determine the extent to which the rights of innocent members have been disregarded. However, given that the views of the Insolvency Law Review Committee shaped (in part) this Act, the minutes of the fourth meeting of the Working Group attest to the fact that the rights of the innocent family members were always the primary concern. In this light, the Court of Appeal held that a transfer to a spouse following the breakdown of a marriage is not a transaction at an undervalue except in circumstances where both spouses colluded and/or there were elements of fraud.

s.214 IA86 considered - Singla v Hedman & Ors [2010] EWHC 902 (Ch) (28 April 2010)

Mr Justice Peter Smith (pictured) has handed down his judgment in Singla v Hedman & Ors [2010] EWHC 902 (Ch) (28 April 2010). The case concerns some rather dubious activity which culminated in accusations of wrongful trading. As the learned judge notes:

    "(1) subject to subsection (3) below, if in the course of the winding up of a company it appears that subsection (2) of this section applies in relation to a person who is or has been a director of the company, the court, on an application of the liquidator, may declare that person is to be liable to make such contribution (if any) to the Company's assets as the court thinks proper.
    (2) this subsection applies in relation to a person if :-
    (a) the Company has gone into insolvent liquidation
    (b) at some time before the commencement of the winding up of the Company that person knew or ought to have concluded that there was no reasonable prospect that the Company would avoid going into insolvent liquidation, and
    (c) that person was a director of the Company at that time."
  1. Sub paragraphs (a) and (c) of subsection 2 are made out.
  2. I should also refer to subsection (4) which provides :-
  3. "for the purposes of subsections (2) and (3), the facts which a director of a company ought to have known or ascertained, the conclusions which he ought to reach and the steps he ought to take are those which will be known or ascertained or reached or taken by a reasonably diligent person having both:-
    (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the Company, and
    (b) the general knowledge, skill and experience that that director has."
  4. It is therefore for the court to judge objectively whether there was as at 24th March 2006 (being the relevant date in this action) no reasonable prospect that NMD would avoid going into insolvent liquidation and then to conclude objectively whether Mr Hedman ought on 24th March 2006 to have concluded that was the case.
  5. It is not suggested that Mr Hedman knew that NMD would go into insolvent liquidation on that date. The submissions of the Liquidator are that he ought to have known that having regard to the facts in relation to the signing of the PSA on that date. Mr Hedman's liability is measured by his knowledge and experience as set out in subsection (4).
  6. Interestingly Mr Hedman in his second witness statement dated 24th July 2009 made some observations about the risks in the film industry (paragraph 13) where he said:-
    "It is true that the film industry is a risky one, and that film companies do fail. It is inevitable, if a film does not recoup its costs, that some creditors at least will be left with money owed to them. I was a director of NMD not the guarantor of its debts, and I did not agree to assume the risks of the Company failing. I do not agree that I improperly attempted to push any risk on to creditors, or that I have acted unreasonably in not personally paying NMD's debts if that is what is suggested. I have not personally taken any money out of the Company for my work on the film".
  1. ....There was no evidence in my view to show there was any reasonable prospect that Mr Martinez was going to turn up and there was no reasonable evidence to show as at 24th March 2006 that any funding would be forthcoming from Seven Arts. The further other difficulties highlighted above demonstrated in my view that there was no real prospect looked at objectively that the film would ever be completed. Thus the PSA was signed by NMD when it had no means of honouring its obligations and no prospect of honouring them. It of course would not lose because all it had was £2 in assets. The loss and the bearing of the loss was born by OSB and the losses and claims it sustained arising out of NMD's failed obligations under the PSA. It was inevitable that NMD would not fulfil its obligations and would not therefore be able to avoid going into insolvent liquidation and that was the position at 24th March 2006.
  2. Looked at objectively in my view the PSA should not have been signed. The only purpose for signing was to kickstart the filming in the forlorn hope of obtaining DCMS funding. I have already referred to the difficulties about that funding above. This was done in spite of the situation at the time."

Picture Credit: http://4.bp.blogspot.com/_YrPhWhp-AW0/So2DSBYMidI/AAAAAAAAAlM/G2Qo3KUUPzE/s400/peter-smith-757325.jpg

Insolvency Rules 1986 (SI 1986/1925), r 6.13 defined - Trustee in Bankruptcy of St John Poulton v Ministry of Justice [2010] EWCA Civ 392; [2010] WLR

The Court of Appeal (Pill, LJ (pictured) Lloyd, LJ and Pitchford, LJ) has handed down its judgment in Trustee in Bankruptcy of St John Poulton v Ministry of Justice [2010] EWCA Civ 392; [2010] WLR (D) 101. The Court of Appeal held that a County Court's failure to give notice to the Chief Land Registrar of a bankruptcy petition under rule 6.13 of the Insolvency Rules 1986 did not give rise to a claim for damages for breach of duty. The effect of the failure was to prevent the trustee in bankruptcy from recovering the proceeds of sale of land by the debtor,

Picture Credit: http://img.metro.co.uk/i/pix/2008/06/JudgeUPPA_175x125.jpg

Administration considered - MccArtney & Ors v Unite The Union & Anor [2010] EWHC 826 (Ch) (22 April 2010)

Mr Justice Norris (pictured) has handed down his judgment in MccArtney & Ors v Unite The Union & Anor [2010] EWHC 826 (Ch) (22 April 2010). The case concerns an administration and issues around employment claims. As the learned judge notes:
"The object of the administration is to rescue the business of the Company as a going concern. This requires participation in a series of co-ordinated asset sales involving a reorganisation of the various individual global business lines of the Nortel Group. This of itself involves the maintenance of the various businesses pending sale and the provision of transitional services following any sale. The administration of the Company is therefore a true trading administration. Many of the Company's employees were retained to maintain the current business, to participate in a reorganisation of the global business lines prior to sale, and to provide the requisite transitional services to purchasers of businesses. Although the jobs of many employees were thereby preserved, there had to be some redundancies."
The learned judge continues:
The learned judge concludes:
Picture Credit: http://www.marlowfm.co.uk/images/alastair.jpg

Thursday, 29 April 2010

Peerage and MP Ledger: The Most Noble William Angus Drogo Ignaza Montagu, the 9th Duke of Manchester - politician, soldier and bankrupt

One of the highest ranking members of the aristocracy who appears in the Peerage and MP Ledger has to be his Grace, the most noble, William Angus Drogo Iznaga Montagu, the 9th Duke of Manchester (the Duke). His grace the Duke was not directly related to his namesake, Mr Basil Montagu QC (1770-1851), the father of modern insolvency law. This alternative group of Montagus forms a separate dynasty related to the Earls of Sandwich.

The 9th Duke of Manchester was born in Kimbelton, Ireland, on the 3 March 1877. He died in Seaford, Essex, on the 9 February 1947. During his lifetime he was known as the Lord Kimbolton from 1877 to 1890 and from 1890 until 1892 as the Viscount Mandeville. The Lord Kimbolton was educated at Eton and Trinity College, Cambridge. Following his accession to the Dukedom, his Grace took the Liberal whip in the House of Lords eventually becoming Deputy Chief Whip. His Grace also became a Captain in the Lancashire Fusiliers.

Debt and attempts to avoid impecunity featured heavily in the 9th Duke's life on various occasions. According to one commentator (Professor Sir David Cannadine) the 9th Duke engaged in excessive spending. Apparently the previous two Dukes had done likewise. Consequentially, the family's fortune was completely exhausted, "culminating in the sale of the family's lands during the tenure of the Tenth Duke." (See further: Cannadine, D. The Decline and Fall of the British Aristocracy. 1990, at page 403.) Cannadine continues: "The Ninth Duke spent much of his life abroad, evading creditors, seeking out wealthy consorts, and attempting to extract money from wealthy acquaintances." This set of circumstances may account for why the 9th Duke features in the Peerage and MP Ledger on no less than three occasions. The entries appear in the following terms (first at page 2):
"Manchester, The Most Noble
William Angus Drogo Montagu, Duke of,

Bankrupt Notice: Issued 21 Jan 1915
Petition: Dated 22 Feb 1915
Receiving Order: Made 28 July 1915
Adjudication: Made 12 January 1916
Order of Discharge and terms (if any): Made 26 Oct 1928 (suspended for three years).
Certificate of Misfortune: None.

Notifcation sent to the Speaker of House of Lords and to the Clerk of the Crown in Chancery (see 106(1)): 19 Jan 1916
Acknowledged: 20/21 Jan 1916."
The second entry appears at page 28 in the following terms:
"Manchester, 9th Duke of
William Angus Drogo Montague [sic] of..., Portman Square, W London,
Peer of the Realm

775/34
Petition filed: 16 August 1934
R.O made: 24 Sep 1934
Receiving Order rescinded and Petition dismissed by order of Court of Appeal of 19 Oct 1934."
The third entry appears at page 29 in the following terms:
"Manchester, Duke of
Willian Angus Drogo Montagu
of 24 ...Court
Portman Square, London

498/35
Petition filed: 6/6/35 (by debtor)
Receiving Order made: 6/6/1935
Adjudication order made: 24/6/1935

Notification sent to the Speaker of the House of Lords and to the Clerk of the Crown in Chancery (see 106(1)): 2 July 1935.

Acknowledged: 4 July 1935 [stamped]."
The 9th Duke has featured in the law reports in cases as recently as 1987. In Re Montagu's Settlement Trusts, Duke of Manchester v National Westminster Bank Plc [1987] Ch. 264; [1987] 2 W.L.R. 1192, Sir Robert Megarry VC had to consider the issue of constructive trusts in the context of the transfer of chattels from the 9th Duke to the 10th Duke (pictured with his own son the future 11th Duke). The 9th Duke has also appeared in:
  • In Re Consuelo, Dowager Duchess of Manchester, Viscount Duncannon v. Duke of Manchester, [1912] 1 Ch. 540
  • In Re the Duke of Manchester's Settlement, [1910] 1 Ch. 106
  • The American judgment in Hamilton v. Drogo, 150 N.E. 496 (N.Y. 1926), concerned the establishment of a trust for the benefit of his heirs (pictured).
The Dukedom has suffered some recent problems and upset.

Picture Credit: http://1.bp.blogspot.com/_dHMUkWjxiWM/Szr0cQQvZOI/AAAAAAAADFQ/4AOsBFxPLog/s1600-h/Duke+of+manchester.jpg

Wednesday, 28 April 2010

Insolvency in the Press - Private Eye, the Times, and the Guardian

Insolvency seems to have hit the headlines in recent days. The most recent edition of the Eye (pictured) has a piece entitled "Farepak Convention." As usual no punches are pulled. As if that was not enough we also now have a story in The Times on Farepak. There seems to be some issue surrounding the million pound remuneration claimed by the liquidator. The Guardian meanwhile are mulling on a potential increase in firms seeking redress to the insolvency laws. It is all go!! Apparently the Surrey Comet will carry an interesting insolvency piece this week as well. It comes out on Friday.

Picture Credit: http://1.bp.blogspot.com/_g3T8P7TvPFc/SzFwKTKE38I/AAAAAAAAAtk/ljBLsedE83Y/s640/Private+Eye+Polar+Bears.jpg

Tuesday, 27 April 2010

COMI and Administration considered - Pillar Securitisation SARL & Ors v Spicer & Anor (Court Administrators) [2010] EWHC 836 (Ch) (01 April 2010)

Mrs Justice Proudman (pictured) has handed down her decision in Pillar Securitisation SARL & Ors v Spicer & Anor (Court Administrators) [2010] EWHC 836 (Ch). The case concerns the fallout from various bank insolvencies and the question of COMI in an administration context. The learned judge mulls on issues surrounding the validity of appointment of the administrator. As she observes:

    • Was KCP's appointment of the administrators for Master effective? The applicants say it was not, on the following grounds:

    • Master's centre of main interests ("COMI") was Guernsey for the purposes of the Council Regulation on Insolvency Proceedings (1346/2000/EC) so that the English court has no jurisdiction in relation to the insolvency;
    • The appointment out of court, and the written resolution leading to the appointment, are both formally and substantively invalid.

    • If the appointment was invalid, what becomes of the remuneration drawn by the administrators to date?

    • In the alternative, the applicants asked that the administrators be removed from office and replaced with other identified insolvency practitioners pursuant to the Insolvency Act, Schedule B1, paragraphs 88 and 95(b).

    • In the second application, the administrators asked that they be permitted to make an interim distribution.

    • They also ask for an extension of their term of office to give them time to dispose of Master's remaining assets.

    • In the context of this application the administrators ask for directions as to whether the applicants are entitled to interest on their claims in respect of the period of delay caused by their application.

    • If the appointment was invalid, the administrators ask the court to make an administration order retrospectively.

    • Again, if the appointment was invalid, there is the issue of the effect of paragraph 104 of Schedule B1 and whether there should be an order for indemnity pursuant to paragraph 34 or otherwise.

    • The administrators ask that the court should allow an amendment to the notice appointing the administrators to correct what is said to be a slip.

    • Lastly, two of the investors ask to be joined to the applications to support the administrators' applications and oppose the applicants' applications. Their expressed basis for joinder, which is opposed by the applicants, is that they have a genuine economic interest justifying their presence.

  1. The first issue, therefore, is as to the validity or otherwise of the appointment."
In relation to COMI the learned judge noted:

The English Court also has jurisdiction where it would, apart from the EC Regulation, have jurisdiction under domestic legislation. The applicable provision is Section 117 of the Insolvency Act 1986, as amended and applied to partnerships by the Insolvent Partnerships Order 1994. There is jurisdiction if Master has, or at any time has had, a principal place of business in England and Wales: section 117(1). Mr Todd QC asserted on behalf of the administrators that Master had "a" principal place of business in London, notwithstanding that it had another principal place of business elsewhere. This was to get round the fact that, in order to obtain registration as a limited partnership in Guernsey, Master had declared for the purposes of section 8(2)(d)(ii) of the 1995 Law, that its principal place of business was at an address in St Peter Port, Guernsey.


    (i) There is a presumption that the body's COMI is in the state where its registered office is located.
    (ii) The presumption can be rebutted only by factors which are both objective and ascertainable by third parties. Thus the court is to have regard to factors already in the public domain, or which would be apparent to a typical third party doing business with the body, excluding such matters as might only be ascertained on inquiry.
    (iii) Accordingly, the place where the body's head office functions are carried out is only relevant if so ascertainable by third parties.
    (iv) Each body or individual has its own COMI, there is no COMI constituted by an aggregation of bodies or individuals."

Picture Credit: http://www.thelawyer.com/pictures/web/images/13527_prudman.jpg

s.281 (3) IA86 and trusts considered - Soutzos v Asombang & Ors [2010] EWHC 842 (Ch) (23 April 2010)

Mr Justice Newey (pictured - whose MG Rover Report is critiqued in the latest Private Eye - see also the "Farepak Convention" article) has recently handed down a huge judgment in the case of Soutzos v Asombang & Ors [2010] EWHC 842 (Ch). The case concerns a lengthy judicial consideration of property development financing in the greater London area. The substance of the case comes down to a couple of specific points regarding some rather substantial loans, totaling some £620,000. As the learned judge states:
With specific regard to the bankruptcy the learned judge noted:

    "The debt due to Mr and Mrs Penna arose in the course of a series of written transactions between them and [Mr Asombang] between 2001 and 2004 in which Mr and Mrs Penna advanced moneys to the debtor to finance the debtor's business as a property developer, against the debtor's promises to repay the same together with agreed fees and interest upon the several dates and the terms set out therein."
    At about the end of February 2008, Dr Soutzos, by his solicitors, himself served a statutory demand on Mr Asombang. A similar statutory demand was served on 29 February 2008 on Miss Dawkins, but she applied to have the demand set aside.
    On 30 April 2008 Mr Asombang was adjudged bankrupt on the petition which had been presented by Mr and Mrs Penna and Mr Kelly."
The case all contains a discussion of the place of trusts in insolvency. Happy reading!

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Monday, 26 April 2010

Peerage and MP ledger: the 2nd Earl of Halsbury, barrister, recorder of Carmarthen, and bankrupt

Hardinge Goulburn Giffard, the 2nd Earl of Halsbury (1880–1943) is a particularly interesting entry in the Peerage and MP ledger. He was a barrister and recorder of Carmarthen. One commentator has noted that he was, "a struggling lawyer...a stern disciplinarian and had an intimidating presence" (Lindsay). This view is of course all the more interesting when one considers that his father was Hardinge Stanley Giffard, 1st Earl of Halsbury (1823–1921 - pictured) the famous Lord Chancellor whose, "short legs accentuated his dumpy and pugnacious appearance." (ODNB). In addition to editing the famous Halsbury's Laws of England, the 1st Earl had three children, Hardinge Goulburn (1880–1943); Lynie May Rohais; and Constance Mary Evelyn. The eldest child makes up the subject matter of this blog entry.

Debt seems to have been a preoccupation of the 2nd Earl of Halsbury throughout his lifetime. This may seem curious on the face of it particularly as he inherited £25,009 11s. 6d in 1921 (in addition to the Earldom) when his father passed away. This was not an insubstantial sum at the time. Some would argue that it is not now! However, something seems to have gone wrong for the 2nd Earl. Unfortunately little information survives on him or the state of his personal finances when he was Viscount Tiverton or the 2nd Earl of Halsbury. Certain questions arise from what does survive. Did he accrue over-indebtedness whilst he was Viscount Tiverton in the hope that when he inherited he would be able to discharge his liabilities? Were his skills as a barrister not as great as his father? What other misfortune affected him? Unfortunately few records survive which help to reconstruct the life of the 2nd Earl of Halsbury. At least one record does however survive. This document is discussed below.

The problem of debt cascaded down the generations. The 2nd Earl once told his own heir, Viscount Tiverton (who became the 3rd Earl), that ‘You will need money to lead the life you have been brought up to, and science will never bring you anything on that scale." (Lindsay). Viscount Tiverton was attempting to obtain a scholarship from Eton to Oxfrod to further his scientific ambitions. His father, the 2nd Earl, wanted him to be an accountant. He followed this path for a short period beginning articles at Deloittes.

The debt problems did not improve for the 2nd Earl who faced, "a declining legal practice and faced approaching bankruptcy." (Lindsay). He faced more than that. This is evidenced by an entry in the Peerage and MP ledger which notes:
"Giffard, Harding Goulbourn [sic]

Earl of Halsbury

965/35 - Dismissed 11/2/36
216/36 - Earl of Halsbury, dismissed 5/5/36

Giffard, Hardinge Goulburn

Earl of Halsbury

No.26 of 1938

Receiving Order: 5/4/38
Adjudication 29/4/38

Notification sent to the speaker of the House of Lords & to the Clerk of the Crown in Chancery (sec 106(1))..."
Things did not improve for the 2nd Earl following his bankruptcy. As his son's biographer notes:
"In 1943 the news had arrived that his father, the 2nd Earl of Halsbury, had died in a

civilian internment camp in German-occupied France. When the Germans had taken Paris, he

had gone into hiding and could only feed himself by selling his clothes; he was barefoot when

rounded up by the authorities. A fellow internee later reported that Halsbury had been the

saddest man in the whole camp and just used to stand by himself all day, unspeaking, gazing

out at the horizon. When his health started to fail he was shifted to a hospital in the Vosges,

the part of France that he had loved best and where he was quartered in the days of World

War I when all went well for him. There he died and was buried in the common grave.

It was thus that Tiverton inherited the title of 3rd Earl of Halsbury, although there was

nothing else to inherit." (Lindsay).

Sources:
Peerage and MP ledger.
OJM Lindsay. John Anthony Hardinge Giffard, 3rd Earl of Halsbury. 4 June 1908-14 January 2000. Biogr. Mems Fell. R. Soc. 2001 47, 239-253.
G. R. Rubin, ‘Giffard, Hardinge Stanley, first earl of Halsbury (1823–1921)’, Oxford Dictionary of National Biography, Oxford University Press, Sept 2004; online edn, Jan 2008.


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Friday, 23 April 2010

Peerage and MP ledger: 7th Earl of Lucan - soldier, banker, professional gambler and suspected murderer who is missing presumed dead - also a bankrupt

Following yesterday's blog entry on the recent long term loan of the Peerage and MP ledger and the Permanent Public Interest ledger from the Royal Courts of Justice we can now move to consider our first entry. One of the most remarkable entries is that which is contained in the Peerage and MP ledger for John, the 7th Earl of Lucan (1934-1999 - pictured) a man who was, "deeply interested in money, and craved all the accoutrements and veneer of wealth." (per Davenport-Hines). The Peerage and MP ledger entry includes the following information:
"Lucan, Richard John Bingham, Seventh Earl of...

Whose present residence is unknown and lately residing at 5 Eaton Row, London, SW1 of No Occupation.

Date of Filing Petition - 28 January 1975
Date of Receiving Order - 30 June 1975
Date of Adjudication - 20 August 1975

Act of Bankruptcy Alleged in Petition
"That with intent to defeat or delay his creditors he departed out of England on or about 8 November 1974 and being out of England remaining out of England with like intent or alternatively has with like intent departed from his dwelling house of otherwise absented himself with like intent to the date hereof."

Notice Sent to the Speaker of the House of Lords and the Clerk of the Crown in Chancery, 29 October 1975."
The source of Lord Lucan's impecunity which led to his eventual bankruptcy could be attributed to his gambling activity. As his ODNB biographer notes, "His domestic misfortunes took him into debt, and under the stress of his circumstances he began losing heavily at the Clermont and chasing his losses. ‘Aspers’ had sold the Clermont to Hugh Hefner's Playboy organization in 1972, and without his protection Lucan's debts became pressing."

If indeed Lord Lucan did flee abroad as the ledger suggests, it could be argued that it was not to avoid his creditors' claims, but to avoid prosecution at the Central Criminal Court for the murder of his children's nanny, Ms. Sandra Rivett. What evidence did the petitioning creditors have which suggested that Lord Lucan had gone abroad? The 7th Earl of Lucan was officially presumed deceased on or after the 8 November 1974 following a Chancery Division ruling made on the 11 December 1992. His son George, the Lord Bingham, could now style himself the 8th Earl of Lucan, although he cannot formally take the title or sit in the House of Lords following a 1992 judgment by the Lord Chancellor. Full probate was granted on 11 August 1999. The Countess of Lucan is the sole beneficiary of her late husband’s residuary estate.

Picture Credit: http://4.bp.blogspot.com/_BUOfb81B9EE/SwBeF4RaoQI/AAAAAAAABQQ/yJ8nv2riWIU/s400/lord+lucan.jpg

Thursday, 22 April 2010

"Register of Potential and Actual Peerage Cases in which the Debtor is a Member of the House of Commons including a Record of Returns Sent"

It has been remarked that Sir Francis Bacon (1561-1626), the father of insolvency compositions and so much more, suffered from an embarrassment of riches. With the recent acquisition of Professor Muir Hunter QC's entire working library of Cork papers (currently being catalogued by Dr Constantine Nana) we have suffered a similar fate of late here at Kingston Law School. This has now been compounded by a further long term loan of two incredibly important primary source documents. The Chief Bankruptcy Registrar has kindly lent the "Register of Potential and Actual Peerage Cases in which the Debtor is a Member of the House of Commons including a record of returns sent" (Pictured - hereafter "Peerage and MP Cases ledger") and a ledger which includes a "List of Files to be Preserved as Being of Permanent Public Interest" (hereafter "Permanent Public Interest Cases ledger") to the Law School. These are both incredibly important sources for the history of our subject. Over the coming weeks details from these documents will be examined and discussed here on the blog.

Destitute Dukes, broke Barons, cash strapped Countesses, monetarily challenged Marchionesses, impecunious Earls, valueless Viscounts, a Marquess who is lacking in means, bust Baronets, needy Knights, debtor Dames, and other Penniless Peers have been discussed on this blog before (see here). We can now go much further with our exposition of impecunious aristocrats and Members of Parliament as the Peerage and MP Cases ledger contains a wealth of information on bankrupt members of both Houses of the Palace of Westminster, beginning with the case of Lord Alfred Douglas and ending with Mr Neil Hamilton, a barrister, who once remarked, "If I am bankrupt, [which he was the following month] I won't be able to return to the bar but even if I was able to do so, I couldn't contain myself from saying what I thought to some of the judges."

This is an important area to consider, particularly in the current election climate, as bankruptcy can cause certain debilitations, including exclusion from sitting in the Legislature. In relation to the majority of the time period covered by the ledgers we must consider s.106 of the Bankruptcy Act 1914 which stipulated that:
"106.—(l) If a peer of the United Kingdom or of any part of the United Kingdom or any other Lord of Parliament is bankruptcy is adjudged bankrupt, the court shall cause the fact of his having been adjudged bankrupt to be certified as soon as may be to the Speaker of the House of Lords and the Clerk of the Crown in Chancery.

(2) If a member of the House of Commons is adjudged bankrupt, and the disqualifications arising from his bankruptcy are not removed within six months from the date of the order, the court shall immediately after the expiration of that time certify the same to the Speaker of the House of Commons."

The first blog entry drawn from the Peerage and MP Cases ledger will appear tomorrow. It will discuss Richard John Bingham, the 7th Earl of Lucan.
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