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The Insolvency Rules (Northern Ireland) 1991

Type Ni-Statutory-Rule

Publication 1991-08-05

State In force

Jurisdiction Northern Ireland

Department Government Printer for Northern Ireland

Source legislation.gov.uk

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articles Not indexed

Reform history JSON API

(7) Where paragraph (6) applies, any reference in the Rules to a resolution that the trustee's resignation be accepted is replaced by a reference to the making of a written statement, signed by the person who, had there been a quorum present, would have been chairman of the meeting, that no quorum was present and that the trustee may resign.

Action following acceptance of resignation

6.124

(1) This Rule applies where a meeting is summoned to receive the trustee's resignation.

(2) If the chairman of the meeting is other than the official receiver, and there is passed at the meeting any of the following resolutions—

(a) that the trustee's resignation be accepted,

(b) that a new trustee be appointed,

the chairman shall, within 3 days, send to the official receiver a copy of the resolution.

(3) If it has been resolved to accept the trustee's resignation, the chairman shall send to the official receiver a certificate to that effect.

(4) If the creditors have resolved to appoint a new trustee, the certificate of his appointment shall also be sent to the official receiver within that time; and Rule 6.120 shall be complied with in respect of it.

(5) If the trustee's resignation is accepted, the notice of it required by Article 271 (6) shall be given by him forthwith after the meeting; and he shall send a copy of the notice to the official receiver.

(6) The notice under Article 271(6) shall be accompanied by a copy of the account sent to creditors under Rule 6.123(3).

(7) The official receiver shall file a copy of the notice in court.

(8) The trustee's resignation is effective as from the date on which the official receiver files the copy notice in court, that date to be endorsed on the copy notice.

Leave to resign granted by the court

6.125

(1) If at a creditors' meeting summoned to accept the trustee's resignation it is resolved that it be not accepted, the court may, on the trustee's application, make an order giving him leave to resign.

(2) The court's order under this Rule may include such provision as it thinks fit with respect to matters arising in connection with the resignation, and shall determine the date from which the trustee's release is effective.

(3) The court shall send 2 sealed copies of the order to the trustee, who shall send one of the copies forthwith to the official receiver.

(4) On sending notice of his resignation to the court, as required by Article 271(6), the trustee shall send a copy of it to the official receiver.

Meeting of creditors to remove trustee

6.126

(1) Where a meeting of creditors is summoned for the purpose of removing the trustee, the notice summoning it shall indicate that this is the purpose, or one of the purposes, of the meeting; and the notice shall draw the attention of creditors to Article 272(3) with respect to the trustee's release.

(2) A copy of the notice shall at the same time also be sent to the official receiver.

(3) At the meeting, a person other than the trustee or his nominee may be elected to act as chairman; but if the trustee or his nominee is chairman and a resolution has been proposed for the trustee's removal, the chairman shall not adjourn the meeting without the consent of at least one-half (in value) of the creditors present (in person or by proxy) and entitled to vote.

(4) Where the chairman of the meeting is other than the official receiver, and there is passed at the meeting any of the following resolutions—

(a) that the trustee be removed,

(b) that a new trustee be appointed,

the chairman shall, within 3 days, send to the official receiver a copy of the resolution.

(5) If it has been resolved to remove the trustee, the chairman shall send to the official receiver a certificate to that effect.

(6) If the creditors have resolved to appoint a new trustee, the certificate of his appointment shall also be sent to the official receiver within 3 days of the passing of the resolution; and Rule 6.117 shall be complied with in respect of it.

Court's power to regulate meeting under Rule 6.126

6.127

Where a meeting under Rule 6.126 is to be held, or is proposed to be summoned, the court may on the application of any creditor give directions as to the mode of summoning it, the sending out and return of forms of proxy, the conduct of the meeting, and any other matter which appears to the court to require regulation or control.

Procedure on removal

6.128

(1) Where the creditors have resolved that the trustee be removed, the official receiver shall file the certificate of removal in court.

(2) The resolution is effective as from the date on which the official receiver files the certificate of removal in court, and that date shall be endorsed on the certificate.

(3) A copy of the certificate, so endorsed, shall be sent by the official receiver to the trustee who has been removed and, if a new trustee has been appointed, to him.

(4) The official receiver shall not file the certificate in court until the Department has certified to him that the removed trustee has reconciled his account with that held by the Department in respect of the bankruptcy.

Removal of trustee by the court

6.129

(1) This Rule applies where application is made to the court for the removal of the trustee, or for an order directing the trustee to summon a meeting of creditors for the purpose of removing him.

(2) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(3) If the application is not dismissed under paragraph (2), the court shall fix a venue for it to be heard.

(4) The applicant shall, at least 14 days before the hearing date, send to the trustee and the official receiver notice stating the venue so fixed; and the notice shall be accompanied by a copy of the application, and of any evidence which the applicant intends to adduce in support of it.

(5) Subject to any contrary order of the court, the costs of the application do not fall on the estate.

(6) Where the court removes the trustee—

(a) it shall send copies of the order of removal to him and to the official receiver;

(b) the order may include such provision as the court thinks fit with respect to matters arising in connection with the removal; and

Removal of trustee by Department

6.130

(1) If the Department decides to remove the trustee, it shall before doing so notify the trustee and the official receiver of its decision and the grounds of it, and specify a period within which the trustee may make representations against implementation of the decision.

(2) If the Department directs the removal of the trustee, it shall forthwith—

(a) file notice of its decision in court, and

(b) send notice to the trustee and the official receiver.

(3) If the trustee is removed by direction of the Department, the court may make any such order in his case as it would have power to make if he had been removed by itself.

Advertisement of resignation or removal

6.131

Where a new trustee is appointed in place of one who has resigned or been removed, the new trustee shall, in the advertisement of his appointment, state that his predecessor has resigned or, as the case may be, been removed and (if it be the case) that he has been given his release.

Release of resigning or removed trustee

6.132

(1) Where the trustee's resignation is accepted by a meeting of creditors which has not resolved against his release, he has his release from when his resignation is effective under Rule 6.124.

(2) Where the trustee is removed by a meeting of creditors which has not resolved against his release, that fact shall be stated in the certificate of removal.

(3) Where—

(a) the trustee resigns, and the creditors' meeting called to receive his resignation has resolved against his release, or

(b) he is removed by a creditors' meeting which has so resolved, or is removed by the court,

he must apply to the Department for his release.

(4) When the Department gives the release, it shall so certify, and send the certificate to the official receiver, to be filed in court.

(5) A copy of the certificate shall be sent by the Department to the former trustee, whose release is effective from the date of the certificate.

SECTION C: RELEASE ON COMPLETION OF ADMINISTRATION

Release of official receiver

6.133

(1) The official receiver shall, before giving notice to the Department under Article 272(2) (that the administration of the estate is for practical purposes complete), send out notice of his intention to do so to all creditors who have proved their debts, and to the bankrupt.

(2) The notice shall in each case be accompanied by a summary of the official receiver's receipts and payments as trustee.

(3) The Department, when it has under Article 272(2) determined the date from which the official receiver is to have his release, shall give notice to the court that it has done so. The notice shall be accompanied by the summary referred to in paragraph (2).

Final meeting of creditors

6.134

(1) Where the trustee is other than the official receiver, he shall give at least 28 days' notice of the final meeting of creditors to be held under Article 304. The notice shall be sent to all creditors who have proved their debts, and to the bankrupt.

(2) The trustee's report laid before the meeting under that Article shall include—

(a) a summary of his receipts and payments, and

(b) a statement by him that he has reconciled his account with that which is held by the Department in respect of the bankruptcy.

(3) At the final meeting, the creditors may question the trustee with respect to any matter contained in his report, and may resolve against him having his release.

(4) The trustee shall give notice to the court that the final meeting has been held; and the notice shall state whether or not the creditors have resolved against his release, and be accompanied by a copy of the report laid before the final meeting. A copy of the notice shall be sent by the trustee to the official receiver.

(5) If there is no quorum present at the final meeting, the trustee shall report to the court that a final meeting was summoned in accordance with the Rules, but there was no quorum present; and the final meeting is then deemed to have been held, and the creditors not to have resolved against the trustee having his release.

(6) If the creditors at the final meeting have not so resolved, the trustee is released when the notice under paragraph (4) is filed in court. If they have so resolved, the trustee must obtain his release from the Department, as provided by Rule 6.132.

SECTION D: REMUNERATION

Fixing of remuneration

6.135

(1) The trustee is entitled to receive remuneration for his services as such.

(2) The remuneration shall be fixed either—

(a) as a percentage of the value of the assets in the bankrupt's estate which are realised or distributed, or of the one value and the other in combination, or

(b) by reference to the time properly given by the responsible insolvency practitioner (as trustee) and his staff in attending to matters arising in the bankruptcy.

(3) Where the trustee is other than the official receiver, it is for the creditors' committee (if there is one) to determine whether his remuneration is to be fixed under paragraph (2)(a) or (b) and, if under paragraph (2)(a), to determine any percentage to be applied as there mentioned.

(4) In arriving at that determination, the committee shall have regard to the following matters—

(a) the complexity (or otherwise) of the case,

(b) any respects in which, in connection with the administration of the estate, there falls on the responsible insolvency practitioner (as trustee) any responsibility of an exceptional kind or degree,

(c) the effectiveness with which the responsible insolvency practitioner appears to be carrying out, or to have carried out, his duties as trustee, and

(d) the value and nature of the assets in the estate with which the trustee has to deal.

(5) If there is no creditors' committee, or the committee does not make the requisite determination, the trustee's remuneration may be fixed (in accordance with paragraph (2)) by a resolution of a meeting of creditors; and paragraph (4) applies to them as it does to the creditors' committee.

(6) If not fixed under paragraphs (2) to (5), the trustee's remuneration shall be on the scale laid down for the official receiver by general regulations.

Other matters affecting remuneration

6.136

(1) Where the trustee sells assets on behalf of a secured creditor, he is entitled to take for himself, out of the proceeds of sale, a sum by way of remuneration equivalent to the remuneration chargeable in corresponding circumstances by the official receiver under general regulations.

(2) Where there are joint trustees, it is for them to agree between themselves as to how the remuneration payable should be apportioned. Any dispute arising between them may be referred—

(a) to the court, for settlement by order, or

(b) to the creditors' committee or a meeting of creditors, for settlement by resolution.

(3) If the trustee is a solicitor and employs his own firm, or any partner in it, to act on behalf of the estate, profit costs shall not be paid unless this is authorised by the creditors' committee, the creditors or the court.

Recourse of trustee to meeting of creditors

6.137

If the trustee's remuneration has been fixed by the creditors' committee, and he considers the rate or amount to be insufficient, he may request that it be increased by resolution of the creditors.

Recourse to the court

6.138

(1) If the trustee considers that the remuneration fixed for him by the creditors' committee, or by resolution of the creditors, or as under Rule 6.135(6), is insufficient, he may apply to the court for an order increasing its amount or rate.

(2) The trustee shall give at least 14 days' notice of his application to the members of the creditors' committee; and the committee may nominate one or more members to appear or be represented, and to be heard, on the application.

(3) If there is no creditors' committee, the trustee's notice of his application shall be sent to such one or more of the bankrupt's creditors as the court may direct, which creditors may nominate one or more of their number to appear or be represented.

(4) The court may, if it appears to be a proper case, order the costs of the trustee's application, including the costs of any member of the creditors' committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid out of the estate.

Creditor's claim that remuneration is excessive

6.139

(1) Any creditor of the bankrupt may, with the concurrence of at least 25 per cent. in value of the creditors (including himself), apply to the court for an order that the trustee's remuneration be reduced, on the grounds that it is, in all the circumstances, excessive.

(2) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(3) If the application is not dismissed under paragraph (2), the court shall fix a venue for it to be heard.

(4) The applicant shall, at least 14 days before the hearing date, send to the trustee a notice stating the venue so fixed; and the notice shall be accompanied by a copy of the application, and of any evidence which the applicant intends to adduce in support of it.

(5) If the court considers the application to be well-founded, it shall make an order fixing the remuneration at a reduced amount or rate.

(6) Unless the court orders otherwise, the costs of the application shall be paid by the applicant, and do not fall on the estate.

SECTION E: SUPPLEMENTARY PROVISIONS

Trustee deceased

6.140

(1) Subject to paragraph (2), where the trustee (other than the official receiver) has died, it is the duty of his personal representatives to give notice of the fact to the official receiver, specifying the date of the death.

(2) Paragraph (1) does not apply if notice has been given under paragraphs (3) or (4).

(3) If the deceased trustee was a partner in a firm, notice may be given to the official receiver by a partner in the firm who is qualified to act as an insolvency practitioner, or is a member of any body recognised by the Department for the authorisation of insolvency practitioners.

(4) Notice of the death may be given by any person producing to the official receiver the relevant death certificate or a copy of it.

(5) The official receiver shall give notice to the court, for the purpose of fixing the date of the deceased trustee's release in accordance with Article 272(3)(a).

Loss of qualification as insolvency practitioner

6.141

(1) This Rule applies where the trustee vacates office, under Article 271(5), on his ceasing to be qualified to act as an insolvency practitioner in relation to the bankrupt.

(2) The trustee vacating office shall forthwith give notice of his doing so to the official receiver, who shall give notice to the Department.

(3) The official receiver shall file in court a copy of his notice under paragraph (2).

(4) Rule 6.132 applies as regards the trustee obtaining his release, as if he had been removed by the court.

Notice to official receiver of intention to vacate office

6.142

(1) Where the trustee intends to vacate office, whether by resignation or otherwise, he shall give notice of his intention to the official receiver together with notice of any creditors' meeting to be held in respect of his vacation of office, including any meeting to receive his resignation.

(2) The notice to the official receiver must be given at least 21 days before any such creditors' meeting.

(3) Where there remains in the bankrupt's estate any property which has not been realised, applied, distributed or otherwise fully dealt with in the bankruptcy, the trustee shall include in his notice to the official receiver details of the nature of that property, its value (or the fact that it has no value), its location, any action taken by the trustee to deal with that property or any reason for his not dealing with it, and the current position in relation to it.

Trustee's duties on vacating office

6.143

(1) Where the trustee ceases to be in office as such, in consequence of removal, resignation or cessor of qualification as an insolvency practitioner, he is under obligation forthwith to deliver up to the person succeeding him as trustee the assets of the estate (after deduction of any expenses properly incurred, and distributions made, by him) and further to deliver up to that person—

(a) the records of the bankruptcy, including correspondence, proofs and other related papers appertaining to the bankruptcy while it was within his responsibility, and

(b) the bankrupt's books, papers and other records.

(2) When the administration of the bankrupt's estate is for practical purposes complete, the trustee shall forthwith file in court all proofs remaining with him in the proceedings.

Power of court to set aside certain transactions

6.144

(1) If in the administration of the estate the trustee enters into any transaction with a person who is an associate of his, the court may, on the application of any person interested, set the transaction aside and order the trustee to compensate the estate for any loss suffered in consequence of it.

(2) This does not apply if either—

(a) the transaction was entered into with the prior consent of the court, or

(b) it is shown to the court's satisfaction that the transaction was for value, and that it was entered into by the trustee without knowing, or having any reason to suppose, that the person concerned was an associate.

(3) Nothing in this Rule is to be taken as prejudicing the operation of any rule of law or equity with respect to a trustee's dealings with trust property, or the fiduciary obligations of any person.

Rule against solicitation

6.145

(1) Where the court is satisfied that any improper solicitation has been used by or on behalf of the trustee in obtaining proxies or procuring his appointment, it may order that no remuneration out of the estate be allowed to any person by whom, or on whose behalf, the solicitation was exercised.

(2) An order of the court under this Rule overrides any resolution of the creditors' committee or the creditors, or any other provision of the Rules relating to the trustee's remuneration.

Enforcement of trustee's obligations to official receiver

6.146

(1) The court may, on the application of the official receiver, make such orders as it thinks necessary for enforcement of the duties of the trustee under Article 278(3) (information and assistance to be given; production and inspection of books and records relating to the bankruptcy).

(2) An order of the court under this Rule may provide that all costs of and incidental to the official receiver's application shall be borne by the trustee.

CHAPTER 11 — THE CREDITORS' COMMITTEE

Membership of creditors' committee

6.147

(1) The creditors' committee shall consist of at least three, and not more than five, members.

(2) All the members of the committee must be creditors of the bankrupt; and any creditor (other than one who is fully secured) may be a member, so long as—

(a) he has lodged a proof of his debt, and

(b) his proof has neither been wholly disallowed for voting purposes, nor wholly rejected for the purposes of distribution or dividend.

(3) A body corporate may be a member of the committee, but it cannot act as such otherwise than by a representative appointed under Rule 6.153.

Formalities of establishment

6.148

(1) The creditors' committee does not come into being, and accordingly cannot act, until the trustee has issued a certificate of its due constitution.

(2) If the chairman of the creditors' meeting which resolves to establish the committee is not the trustee, he shall forthwith give notice of the resolution to the trustee (or, as the case may be, the person appointed as trustee by that same meeting), and inform him of the names and addresses of the persons elected to be members of the committee.

(3) No person may act as a member of the committee unless and until he has agreed to do so and, unless the relevant proxy contains a statement to the contrary, such agreement may be given by his proxy-holder present at the meeting establishing the committee.

(4) The trustee's certificate of the committee's due constitution shall not issue before at least three persons elected to be members of the committee have agreed to act.

(5) As and when the others (if any) agree to act, the trustee shall issue an amended certificate.

(6) The certificate, and any amended certificate, shall be filed in court by the trustee.

(7) If after the first establishment of the committee there is any change in its membership, the trustee shall report the change to the court.

Obligations of trustee to committee

6.149

(1) Subject to paragraphs (2) and (4), it is the duty of the trustee to report to the members of the creditors' committee all such matters as appear to him to be, or as they have indicated to him as being, of concern to them with respect to the bankruptcy.

(2) In the case of matters so indicated to him by the committee, the trustee need not comply with any request for information where it appears to him that—

(a) the request is frivolous or unreasonable, or

(b) the cost of complying would be excessive, having regard to the relative importance of the information, or

(3) Where the committee has come into being more than 28 days after the appointment of the trustee, the latter shall report to them, in summary form, what actions he has taken since his appointment, and shall answer such questions as they may put to him regarding his conduct of the bankruptcy hitherto.

(4) A person who becomes a member of the committee at any time after its first establishment is not entitled to require a report to him by the trustee, otherwise than in summary form, of any matters previously arising.

(5) Nothing in this Rule disentitles the committee, or any member of it, from having access to the trustee's records of the bankruptcy, or from seeking an explanation of any matter within the committee's responsibility.

Meetings of the committee

6.150

(1) Subject to paragraph (2), meetings of the creditors' committee shall be held when and where determined by the trustee.

(2) The trustee shall call a first meeting of the committee to take place within 3 months of his appointment or of the committee's establishment (whichever is the later); and thereafter he shall call a meeting—

(a) if so requested by a member of the committee or his representative (the meeting then to be held within 21 days of the request being received by the trustee), and

(b) for a specified date, if the committee has previously resolved that a meeting be held on that date.

(3) The trustee shall give 7 days' notice in writing of the venue of any meeting to every member of the committee (or his representative, if designated for that purpose), unless in any case the requirement of the notice has been waived by or on behalf of any member.

(4) For the purpose of paragraph (3), waiver may be signified either at or before the meeting.

The chairman at meetings

6.151

(1) The chairman at any meeting of the creditors' committee shall be the trustee, or a person appointed by him in writing to act.

(2) A person so nominated must be either—

(a) one who is qualified to act as an insolvency practitioner in relation to the bankrupt, or

(b) an employee of the trustee or his firm who is experienced in insolvency matters.

Quorum

6.152

A meeting of the committee is duly constituted if due notice of it has been given to all the members and at least two of the members are present or represented.

Committee-members' representatives

6.153

(1) A member of the creditors' committee may, in relation to the business of the committee, be represented by another person duly authorised by him for that purpose.

(2) A person acting as a committee-member's representative must hold a letter of authority entitling him so to act (either generally or specially) and signed by or on behalf of the committee-member, and for this purpose any proxy in relation to any meeting of creditors of the bankrupt shall, unless it contains a statement to the contrary, be treated as such a letter of authority to act generally signed by or on behalf of the committee-member.

(3) The chairman at any meeting of the committee may call on a person claiming to act as a committee-member's representative to produce his letter of authority, and may exclude him if it appears that his authority is deficient.

(4) No member may be represented by a body corporate, or by a person who is an undischarged bankrupt or is subject to a composition or arrangement with his creditors.

(5) No person shall—

(a) on the same committee, act at one and the same time as representative of more than one committee-member, or

(b) act both as a member of the committee and as representative of another member.

(6) Where the representative of a committee-member signs any document on the latter's behalf, the fact that he so signs must be stated below his signature.

(7) The acts of the committee are valid notwithstanding any defect in the appointment or qualifications of any committee-member's representative.

Resignation

6.154

A member of the creditors' committee may resign by notice in writing delivered to the trustee.

Termination of membership

6.155

(1) A person's membership of the creditors' committee is automatically terminated if—

(a) he becomes bankrupt or compounds or arranges with his creditors, or

(b) at 3 consecutive meetings of the committee he is neither present nor represented (unless at the third of those meetings it is resolved that this Rule is not to apply in his case), or

(2) However, if the cause of termination is the member's bankruptcy, his trustee in bankruptcy replaces him as a member of the committee.

Removal

6.156

A member of the creditors' committee may be removed by resolution at a meeting of creditors, at least 14 days' notice having been given of the intention to move that resolution.

Vacancies

6.157

(1) This Rule applies if there is a vacancy in the membership of the creditors' committee.

(2) The vacancy need not be filled if the trustee and a majority of the remaining committee-members so agree and if the number of members does not fall below the minimum required by Rule 6.147(1).

(3) The trustee may appoint any creditor (being qualified under the Rules to be a member of the committee) to fill the vacancy, if a majority of the other members of the committee agree to the appointment and the creditor concerned consents to act.

(4) Alternatively, a meeting of creditors may resolve that a creditor be appointed (with his consent) to fill the vacancy. In this case at least 14 days' notice must have been given of a resolution to make such an appointment (whether or not of a person named in the notice).

(5) Where the vacancy is filled by an appointment made by a creditors' meeting at which the trustee is not present, the chairman of the meeting shall report to the trustee the appointment which has been made.

Voting rights and resolutions

6.158

(1) At any meeting of the committee, each member (whether present himself, or by his representative) has one vote; and a resolution is passed when a majority of the members present or represented have voted in favour of it.

(2) Every resolution passed shall be recorded in writing, either separately or as part of the minutes of the meeting. The record shall be signed by the chairman and kept with the records of the bankruptcy.

Resolutions by post

6.159

(1) In accordance with this Rule, the trustee may seek to obtain the agreement of members of the creditors' committee to a resolution by sending to every member (or his representative designated for the purpose) a copy of the proposed resolution.

(2) Where the trustee makes use of the procedure allowed by this Rule, he shall send out to members of the committee or their representatives (as the case may be) a copy of any proposed resolution on which a decision is sought, which shall be set out in such a way that agreement with or dissent from each separate resolution may be indicated by the recipient on the copy so sent.

(3) Any member of the committee may, within 7 business days from the date of the trustee sending out a resolution, require the trustee to summon a meeting of the committee to consider the matters raised by the resolution.

(4) In the absence of such a request, the resolution is deemed to have been carried in the committee if and when the trustee is notified in writing by a majority of the members that they concur with it.

(5) A copy of every resolution passed under this Rule, and a note that the concurrence of the committee was obtained, shall be kept with the records of the bankruptcy.

Trustee's reports

6.160

(1) The trustee shall, as and when directed by the creditors' committee (but not more often than once in any period of 2 months), send a written report to every member of the committee setting out the position generally as regards the progress of the bankruptcy and matters arising in connection with it, to which he (the trustee) considers the committee's attention should be drawn.

(2) In the absence of any such directions by the committee, the trustee shall send such a report not less often than once in every period of 6 months.

(3) The obligations of the trustee under this Rule are without prejudice to those imposed by Rule 6.149.

Expenses of members, etc.

6.161

The trustee shall defray out of the estate, in the prescribed order of priority, any reasonable travelling expenses directly incurred by members of the creditors' committee or their representatives in respect of their attendance at the committee's meetings, or otherwise on the committee's business.

Dealings by committee-members and others

6.162

(1) This Rule applies to—

(a) any member of the creditors' committee,

(b) any committee-member's representative,

(c) any person who is an associate, or who has been an associate at any time in the last 12 months, of a member of the committee or of a committee-member's representative, and

(d) any person who has been a member of the committee or a committee-member's representative at any time in the last 12 months or who is, or has been at any time in the last 12 months, an associate of such a person.

(2) Subject to paragraphs (3) and (4), a person to whom this Rule applies shall not enter into any transaction whereby he—

(a) receives out of the estate any payment for services given or goods supplied in connection with the estate's administration, or

(b) obtains any profit from the administration, or

(3) Such a transaction may be entered into by a person to whom this Rule applies—

(a) with the prior leave of the court, or

(b) if he does so as a matter of urgency, or by way of performance of a contract in force before the commencement of the bankruptcy, and obtains the court's leave for the transaction, having applied for it without undue delay, or

(c) with the prior sanction of the creditors' committee, where it is satisfied (after full disclosure of the circumstances) that the person will be giving full value in the transaction.

(4) Where in the committee a resolution is proposed that sanction be accorded for a transaction to be entered into which, without that sanction or the leave of the court, would be in contravention of this Rule, no member of the committee, and no representative of a member, shall vote if he is to participate directly or indirectly in the transaction.

(5) The court may, on the application of any person interested—

(a) set aside a transaction on the ground that it has been entered into in contravention of this Rule, and

(b) make with respect to it such other order as it thinks fit, including (subject to paragraph (6)) an order requiring a person to whom this Rule applies to account for any profit obtained from the transaction and compensate the estate for any resultant loss.

(6) In the case of a person to whom this Rule applies as an associate of a member of the committee or of a committee-member's representative, the court shall not make any order under paragraph (5), if satisfied that he entered into the relevant transaction without having any reason to suppose that in doing so he would contravene this Rule.

(7) The costs of an application to the court for leave under this Rule do not fall on the estate, unless the court so orders.

Committee's functions vested in Department

6.163

(1) At any time when the functions of the creditors' committee are vested in the Department under Article 275(1) or (2), requirements of the Order or the Rules about notices to be given, or reports to be made, to the committee by the trustee do not apply, otherwise than as enabling the committee to require a report as to any matter.

(2) Where the committee's functions are so vested under Article 275(2), they may be exercised by the official receiver.

CHAPTER 12 — SPECIAL MANAGER

Appointment and remuneration

6.164

(1) An application made by the official receiver or trustee under Article 341 for the appointment of a person to be special manager shall be supported by a report setting out the reasons for the application.

(2) The report under paragraph (1) shall include the applicant's estimate of the value of the estate, property or business in respect of which the special manager is to be appointed.

(3) The court's order appointing the special manager shall specify the duration of his appointment, which may be for a period of time, or until the occurrence of a specified event. Alternatively, the order may specify that the duration of the appointment is to be subject to a further order of the court.

(4) The appointment of a special manager may be renewed by order of the court.

(5) The special manager's remuneration shall be fixed from time to time by the court.

Security

6.165

(1) The appointment of the special manager does not take effect until the person appointed has given (or, being allowed by the court to do so, undertaken to give) security to the person who applies for him to be appointed.

(2) It is not necessary that security shall be given for each separate bankruptcy; but it may be given either specially for a particular bankruptcy, or generally for any bankruptcy in relation to which the special manager may be employed as such.

(3) The amount of the security shall be not less than the value of the estate, property or business in respect of which he is appointed, as estimated under Rule 6.164(2) by the applicant in his report under paragraph (1) of that Rule.

(4) When the special manager has given security to the person applying for his appointment, that person's certificate as to the adequacy of the security shall be filed in court.

(5) The cost of providing the security shall be paid in the first instance by the special manager; but—

(a) where a bankruptcy order is not made, he is entitled to be reimbursed out of the property of the debtor, and the court may make an order on the debtor accordingly, and

(b) where a bankruptcy order is made, he is entitled to be reimbursed out of the estate in the prescribed order of priority.

Failure to give or keep up security

6.166

(1) If the special manager fails to give the required security within the time stated for that purpose by the order appointing him, or any extension of that time that may be allowed, the official receiver or trustee (as the case may be) shall report the failure to the court, which may thereupon discharge the order appointing the special manager.

(2) If the special manager fails to keep up his security, the official receiver or trustee shall report his failure to the court, which may thereupon remove the special manager, and make such order as it thinks fit as to costs.

(3) If an order is made under this Rule removing the special manager, or discharging the order appointing him, the court shall give directions as to whether any, and if so what, steps should be taken for the appointment of another special manager in his place.

Accounting

6.167

(1) The special manager shall produce accounts, containing details of his receipts and payments, for the approval of the trustee.

(2) The accounts shall be in respect of 3-month periods for the duration of the special manager's appointment (or for a lesser period, if his appointment terminates less than 3 months from its date, or from the date to which the last accounts were made up).

(3) When the accounts have been approved, the special manager's receipts and payments shall be added to those of the trustee.

Termination of appointment

6.168

(1) The special manager's appointment terminates if the bankruptcy petition is dismissed or if, an interim receiver having been appointed, the latter is discharged without a bankruptcy order having been made.

(2) If the official receiver or the trustee is of opinion that the employment of the special manager is no longer necessary or profitable for the estate, he shall apply to the court for directions, and the court may order the special manager's appointment to be terminated.

(3) The official receiver or the trustee shall make the same application if a resolution of the creditors is passed, requesting that the appointment be terminated.

CHAPTER 13 — PUBLIC EXAMINATION OF BANKRUPT

Order for public examination

6.169

(1) If the official receiver applies to the court, under Article 263, for the public examination of the bankrupt, a copy of the court's order shall, forthwith after its making, be sent by the official receiver to the bankrupt.

(2) The order shall appoint a venue for the hearing, and direct the bankrupt's attendance thereat.

(3) The official receiver shall give at least 14 days' notice of the hearing date—

(a) if a trustee has been nominated or appointed, to him;

(b) if a special manager has been appointed, to him; and

(c) subject to any contrary direction of the court, to every creditor of the bankrupt who is known to the official receiver or is identified in the bankrupt's statement of affairs.

(4) The official receiver may, if he thinks fit, cause notice of the order to be given, by public advertisement in one or more newspapers, at least 14 days before the hearing date.

Order on request by creditors

6.170

(1) A request by a creditor to the official receiver, under Article 263(2), for the bankrupt to be publicly examined shall be made in writing and be accompanied by—

(a) a list of the creditors concurring with the request and the amount of their respective claims in the bankruptcy,

(b) from each creditor concurring, written confirmation of his concurrence, and

(2) Paragraph (1)(a) and (b) does not apply if the requisitioning creditor's debt is alone sufficient, without the concurrence of others.

(3) Before an application to the court is made on the request, the requisitionist shall deposit with the official receiver such sum as the latter may determine to be appropriate by way of security for the expenses of the hearing of a public examination, if ordered.

(4) Subject to paragraph (5), the official receiver shall, within 28 days of receiving the request, make the application to the court required by Article 263(2).

(5) If the official receiver is of opinion that the request is an unreasonable one in the circumstances, he may apply to the court for an order relieving him from the obligation to make the application otherwise required by Article 263(2).

(6) If the court so orders, and the application for the order was made ex parte, notice of the order shall be given forthwith by the official receiver to the requisitionist. If the application for an order is dismissed, the official receiver's application under Article 263(2) shall be made forthwith on conclusion of the hearing of the application first mentioned.

Bankrupt unfit for examination

6.171

(1) Where the bankrupt is suffering from any mental disorder or physical affliction or disability rendering him unfit to undergo or attend for public examination, the court may, on application in that behalf, either stay the order for his public examination or direct that it shall be conducted in such manner and at such place as it thinks fit.

(2) Application under this Rule shall be made—

(a) by a person who has been appointed by a court in the United Kingdom or elsewhere to manage the affairs of, or to represent, the bankrupt, or

(b) by a relative or friend of the bankrupt whom the court considers to be a proper person to make the application, or

(3) Where the application is made by a person other than the official receiver, then—

(a) it shall, unless the bankrupt is a patient within the meaning of the Mental Health (Northern Ireland) Order 1986[^f00025], be supported by the affidavit of a registered medical practitioner as to the bankrupt's mental and physical condition;

(b) at least 7 days' notice of the application shall be given to the official receiver and the trustee (if any); and

(c) before any order is made on the application, the applicant shall deposit with the official receiver such sum as the latter certifies to be necessary for the additional expenses of any examination that may be ordered on the application.

(4) An order made on the application may provide that the expenses of the examination are to be payable, as to a specified proportion, out of the deposit under paragraph (3) (c), instead of out of the estate.

(5) Where the application is made by the official receiver, it may be made ex parte, and may be supported by evidence in the form of a report to the court by the official receiver.

Procedure at hearing

6.172

(1) The bankrupt shall at the hearing be examined on oath; and he shall answer all such questions as the court may put, or allow to be put, to him.

(2) Any of the persons allowed by Article 263(4) to question the bankrupt may, with the approval of the court (made known either at the hearing or in advance of it), appear by solicitor or counsel; or he may in writing authorise another person to question the bankrupt on his behalf.

(3) The bankrupt may at his own expense employ a solicitor with or without counsel, who may put to him such questions as the court may allow for the purpose of enabling him to explain or qualify any answers given by him, and may make representations on his behalf.

(4) There shall be made in writing such record of the examination as the court thinks proper. The record shall be read over either to or by the bankrupt, signed by him, and verified by affidavit at a venue fixed by the court.

(5) The written record may, in any proceedings (whether under the Order or otherwise) be used as evidence against the bankrupt of any statement made by him in the course of his public examination.

(6) If criminal proceedings have been instituted against the bankrupt, and the court is of opinion that the continuance of the hearing would be calculated to prejudice a fair trial of those proceedings, the hearing may be adjourned.

Adjournment

6.173

(1) The public examination may be adjourned by the court from time to time, either to a fixed date or generally.

(2) Where the examination has been adjourned generally, the court may at any time on the application of the official receiver or of the bankrupt—

(a) fix a venue for the resumption of the examination, and

(b) give directions as to the manner in which, and the time within which, notice of the resumed public examination is to be given to persons entitled to take part in it.

(3) Where application under paragraph (2) is made by the bankrupt, the court may grant it on terms that the expenses of giving the notices required by that paragraph shall be paid by him and that, before a venue for the resumed public examination is fixed, he shall deposit with the official receiver such sum as the latter considers necessary to cover those expenses.

(4) Where the examination is adjourned generally, the official receiver may, there and then, make application under Article 253(3) (suspension of automatic discharge).

Expenses of examination

6.174

(1) Where a public examination of the bankrupt has been ordered by the court on a creditors' requisition under Rule 6.170, the court may order that the expenses of the examination are to be paid, as to a specified proportion, out of the deposit under Rule 6.170(3), instead of out of the estate.

(2) In no case do the costs of a public examination fall on the official receiver personally.

CHAPTER 14 — DISCLAIMER

Trustee's notice of disclaimer

6.175

(1) Where the trustee disclaims property under Article 288, the notice of disclaimer shall contain such particulars of the property disclaimed as enable it to be easily identified.

(2) The notice shall be signed by the trustee and filed in court, with a copy. The court shall secure that both the notice and the copy are sealed and endorsed with the date of filing.

(3) The copy notice, so sealed and endorsed, shall be returned by the court to the trustee as follows—

(a) if the notice has been delivered at the office of the court by the trustee in person, it shall be handed to him,

(b) if it has been delivered by some person acting on the trustee's behalf, it shall be handed to that person, for immediate transmission to the trustee, and

(4) The court shall cause to be endorsed on the original notice, or otherwise recorded on the file, the manner in which the copy notice was returned to the trustee.

(5) For the purposes of Article 288, the date of the prescribed notice is that which is endorsed on it, and on the copy, in accordance with this Rule.

Communication of disclaimer to persons interested

6.176

(1) Within 7 days after the day on which a copy of the notice of disclaimer is returned to him, the trustee shall send or give copies of the notice (showing the date endorsed as required by Rule 6.175) to the persons mentioned in paragraphs (2) to (8).

(2) Where the property disclaimed is of a leasehold nature, he shall send or give a copy to every person who (to his knowledge) claims under the bankrupt as underlessee or mortgagee.

(3) Where the disclaimer is of property in a dwelling-house, he shall send or give a copy to every person who (to his knowledge) is in occupation of, or claims a right to occupy, the house.

(4) He shall in any case send or give a copy of the notice to every person who (to his knowledge)—

(a) claims an interest in the disclaimed property, or

(b) is under any liability in respect of the property, not being a liability discharged by the disclaimer.

(5) If the disclaimer is of an unprofitable contract, he shall send or give copies of the notice to all such persons as, to his knowledge, are parties to the contract or have interests under it.

(6) If subsequently it comes to the trustee's knowledge, in the case of any person, that he has such an interest in the disclaimed property as would have entitled him to receive a copy of the notice of disclaimer in pursuance of paragraphs (2) to (5), the trustee shall then forthwith send or give to that person a copy of the notice.

(7) Compliance with paragraph (6) is not required if—

(a) the trustee is satisfied that the person has already been made aware of the disclaimer and its date, or

(b) the court, on the trustee's application, orders that compliance is not required in that particular case.

(8) A notice or copy notice to be served on any person under the age of 18 in relation to the disclaimer of property in a dwelling-house is sufficiently served if sent or given to the parent or guardian of that person.

Additional notices

6.177

The trustee disclaiming property may, without prejudice to his obligations under Articles 288 to 292 and Rules 6.175 and 6.176, at any time give notice of the disclaimer to any persons who in his opinion ought, in the public interest or otherwise, to be informed of it.

Duty to keep court informed

6.178

The trustee shall notify the court from time to time as to the persons to whom he has sent or given copies of the notice of disclaimer under Rules 6.17 6 and 6.177, giving their names and addresses, and the nature of their respective interests.

Application for leave to disclaim

6.179

(1) Where under Article 288(4) the trustee requires the leave of the court to disclaim property claimed for the bankrupt's estate under Article 280 or 281, he may apply for that leave ex parte.

(2) The application must be accompanied by a report—

(a) giving such particulars of the property proposed to be disclaimed as enable it to be easily identified,

(b) setting out the reasons why, the property having been claimed for the estate, the court's leave to disclaim is now applied for, and

(3) If it is stated in the report that any person's consent to the disclaimer has been signified, a copy of that consent must be annexed to the report.

(4) The court may, on consideration of the application, grant the leave applied for; and it may, before granting leave—

(a) order that notice of the application be given to all such persons who, if the property is disclaimed, will be entitled to apply for a vesting or other order under Article 293, and

(b) fix a venue for the hearing of the application under Article 288(4).

Application by interested party under Article 289

6.180

(1) Paragraphs (2) to (4) apply where, in the case of any property, application is made to the trustee by an interested party under Article 289 (request for decision whether the property is to be disclaimed or not).

(2) The application—

(a) shall be delivered to the trustee personally or by registered post, and

(b) shall be made in the form known as “notice to elect”, or a substantially similar form.

(3) Paragraph (4) applies in a case where the property concerned cannot be disclaimed by the trustee without the leave of the court.

(4) If within the period of 28 days mentioned in Article 289(1) the trustee applies to the court for leave to disclaim, the court shall extend the time allowed by that Article for giving notice of disclaimer to a date not earlier than the date fixed for the hearing of the application.

Interest in property to be declared on request

6.181

(1) If, in the case of property which the trustee has the right to disclaim, it appears to him that there is some person who claims, or may claim, to have an interest in the property, he may give notice to that person calling on him to declare within 14 days whether he claims any such interest and, if so, the nature and extent of it.

(2) Failing compliance with the notice, the trustee is entitled to assume that the person concerned has no such interest in the property as will prevent or impede its disclaimer.

Disclaimer presumed valid and effective

6.182

Any disclaimer of property by the trustee is presumed valid and effective, unless it is proved that he has been in breach of his duty with respect to the giving of notice of disclaimer, or otherwise under Articles 288 to 292, or under this Chapter.

Application for exercise of court's powers under Article 293

6.183

(1) This Rule applies with respect to an application by any person under Article 293 for an order of the court to vest or deliver disclaimed property.

(2) The application must be made within 3 months of the applicant becoming aware of the disclaimer, or of his receiving a copy of the trustee's notice of disclaimer sent under Rule 6.176, whichever is the earlier.

(3) The applicant shall with his application file an affidavit—

(a) stating whether he applies under sub-paragraph (a) of Article 293(2) (claim of interest in the property), under sub-paragraph (b) (liability not discharged) or under sub-paragraph (c) (occupation of dwelling-house);

(b) specifying the date on which he received a copy of the trustee's notice of disclaimer, or otherwise became aware of the disclaimer; and

(4) The court shall fix a venue for the hearing of the application; and the applicant shall, not later than 7 days before the hearing date, give to the trustee notice of the venue, accompanied by copies of the application and the affidavit under paragraph (3).

(5) On the hearing of the application, the court may give directions as to other persons (if any) who should be sent or given notice of the application and the grounds on which it is made.

(6) Sealed copies of any order made on the application shall be sent by the court to the applicant and the trustee.

(7) In a case where the property disclaimed is of a leasehold nature, or is property in a dwelling-house, and Article 290 or (as the case may be) Article 291 applies to suspend the effect of the disclaimer, there shall be included in the court's order a direction giving effect to the disclaimer.

(8) Paragraph (7) does not apply if, at the time when the order is issued, other applications under Article 293 are pending in respect of the same property.

CHAPTER 15 — REPLACEMENT OF EXEMPT PROPERTY

Purchase of replacement property

6.184

(1) A purchase of replacement property under Article 281(3) may be made either before or after the realisation by the trustee of the value of the property vesting in him under that Article.

(2) The trustee is under no obligation, by virtue of Article 281, to apply funds to the purchase of a replacement for property vested in him, unless and until he has sufficient funds in the estate for that purpose.

Money provided in lieu of sale

6.185

(1) Paragraph (2) applies where a third party proposes to the trustee that he (the former) should provide the estate with a sum of money enabling the bankrupt to be left in possession of property which would otherwise be made to vest in the trustee under Article 281.

(2) The trustee may accept that proposal, if satisfied that it is a reasonable one, and that the estate will benefit to the extent of the value of the property in question less the cost of a reasonable replacement.

CHAPTER 16 — INCOME PAYMENTS ORDERS

Application for order

6.186

(1) Where the trustee applies for an income payments order under Article 283, the court shall fix a venue for the hearing of the application.

(2) Notice of the application, and of the venue, shall be sent by the trustee to the bankrupt at least 28 days before the hearing date, together with a copy of the trustee's application and a short statement of the grounds on which it is made.

(3) The notice shall inform the bankrupt that—

(a) unless at least 7 days before the hearing date he sends to the court and to the trustee written consent to an order being made in the terms of the application, he is required to attend the hearing, and

(b) if he attends, he will be given an opportunity to show cause why the order should not be made, or an order should be made otherwise than as applied for by the trustee.

Action to follow making of order

6.187

(1) Where the court makes an income payments order, a sealed copy of the order shall, forthwith after it is made, be sent by the trustee to the bankrupt.

(2) If the order is made under Article 283(3)(b), a sealed copy of the order shall also be sent by the trustee to the person to whom the order is directed.

Variation of order

6.188

(1) If an income payments order is made under Article 283(3)(a), and the bankrupt does not comply with it, the trustee may apply to the court for the order to be varied, so as to take effect under Article 283(3)(b) as an order to the payor of the relevant income.

(2) The trustee's application under this Rule may be made ex parte.

(3) Sealed copies of any order made on the application shall, forthwith after it is made, be sent by the court to the trustee and the bankrupt.

(4) In the case of an order varying or discharging an income payments order made under Article 283(3)(b), an additional sealed copy shall be sent to the trustee, for transmission forthwith to the payor of the relevant income.

Order to payor of income: administration

6.189

(1) Where a person receives notice of an income payments order under Article 283(3)(b), with reference to income otherwise payable by him to the bankrupt, he shall make the arrangements requisite for immediate compliance with the order.

(2) When making any payment to the trustee, he may deduct the appropriate fee towards the clerical and administrative costs of compliance with the income payments order.

(3) He shall give to the bankrupt a written statement of any amount deducted by him under paragraph (2).

(4) Where a person receives notice of an income payments order imposing on him a requirement under Article 283(3)(b), and either—

(a) he is then no longer liable to make to the bankrupt any payment of income, or

(b) having made payments in compliance with the order, he ceases to be so liable,

he shall forthwith give notice of that fact to the trustee.

Review of order

6.190

(1) Where an income payments order is in force, either the trustee or the bankrupt may apply to the court for the order to be varied or discharged.

(2) If the application is made by the trustee, Rule 6.186 applies (with any necessary modification) as in the case of an application for an income payments order.

(3) If the application is made by the bankrupt, it shall be accompanied by a short statement of the grounds on which it is made.

(4) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(5) If the application is not dismissed under paragraph (4), the court shall fix a venue for it to be heard.

(6) At least 28 days before the hearing date, the applicant shall send to the trustee or the bankrupt (whichever of them is not himself the applicant) notice of the venue, accompanied by a copy of the application.

(7) Where the applicant is the bankrupt, the notice shall be accompanied by a copy of the statement of grounds under paragraph (3).

(8) The trustee may, if he thinks fit, appear and be heard on the application; and, whether or not he intends to appear, he may, not less than 7 days before the hearing date, file a written report of any matters which he considers ought to be drawn to the court's attention.

(9) If a report is filed under paragraph (8), a copy of it shall be sent by the trustee to the bankrupt.

(10) Sealed copies of any order made on the application shall, forthwith after the order is made, be sent by the court to the trustee, the bankrupt and the payor (if other than the bankrupt).

CHAPTER 17 — ACTION BY COURT UNDER ARTICLE 340 ORDER TO INLAND REVENUE OFFICIAL

Application for order

6.191

(1) An application by the official receiver or the trustee for an order under Article 340 (order to inland revenue official to produce documents) shall specify (with such particularity as will enable the order, if made, to be most easily complied with) the documents whose production to the court is desired, naming the official to whom the order is to be addressed.

(2) The court shall fix a venue for the hearing of the application.

(3) Notice of the venue, accompanied by a copy of the application, shall be sent by the applicant to the Commissioners of Inland Revenue (“the Commissioners”) at least 28 days before the hearing date.

(4) The notice shall require the Commissioners, not later than 7 days before the date fixed for the hearing of the application, to inform the court whether they consent or object to the making of an order under Article 340.

(5) If the Commissioners consent to the making of an order, they shall inform the court of the name of the official to whom it should be addressed, if other than the one named in the application.

(6) If the Commissioners object to the making of an order, they shall secure that an officer of theirs attends the hearing of the application and, not less than 7 days before the hearing date, deliver to the court a statement in writing of their grounds of objection.

(7) A copy of the statement mentioned in paragraph (6) shall be sent forthwith by the Commissioners to the applicant.

Making and service of the order

6.192

(1) If on the hearing of the application it appears to the court to be a proper case, the court may make the order applied for, with such modifications (if any) as appear appropriate having regard to any representations made on behalf of the Commissioners.

(2) The order—

(a) may be addressed to an inland revenue official other than the one named in the application,

(b) shall specify a time, not less than 28 days after service on the official to whom the order is addressed, within which compliance is required, and

(3) A sealed copy of the order shall be served by the applicant on the official to whom it is addressed.

(4) If the official is unable to comply with the order because he has not the relevant documents in his possession, and has been unable to obtain possession of them, he shall deliver to the court a statement in writing as to the reasons for his non-compliance.

(5) A copy of the statement delivered under paragraph (4) shall be sent forthwith by the official to the applicant.

Custody of documents

6.193

Where in compliance with an order under Article 340 original documents are produced, and not copies, any person who, by order of the court under Article 340(2) (authorised disclosure to persons with right of inspection), has them in his possession or custody is responsible to the court for their safe keeping and return as and when directed.

CHAPTER 18 — MORTGAGED PROPERTY

Claim by mortgagee of land

6.194

(1) Any person claiming to be the legal or equitable mortgagee of land belonging to the bankrupt may apply to the court for an order directing that the land be sold.

(2) The court, if satisfied as to the applicant's title, may direct accounts to be taken and enquiries made to ascertain—

(a) the principal, interest and costs due under the mortgage, and

(b) where the mortgagee has been in possession of the land or any part of it, the rents and profits, dividends, interest, or other proceeds received by him or on his behalf.

(3) Directions may be given by the court under paragraph (2) with respect to any mortgage (whether prior or subsequent) on the same property, other than that of the applicant.

(4) For the purpose of those accounts and enquiries, and of making title to the purchaser, any of the parties may be examined by the court, and shall produce on oath before the court all such documents in their custody or under their control relating to the estate of the bankrupt as the court may direct.

(5) The court may under paragraph (4) authorise the service of interrogatories on any party.

(6) In any proceedings between a mortgagor and mortgagee, or the trustee of either of them, the court may order any necessary accounts or enquiries to be taken or made under Order 43 of the Supreme Court Rules.

Power of court to order sale

6.195

(1) The court may order that the land, or any specified part of it, be sold; and any party bound by the order and in possession of the land or part, or in receipt of the rents and profits from it, may be ordered to deliver up possession or receipt to the purchaser or to such other person as the court may direct.

(2) The court may permit the person having the conduct of the sale to sell the land in such manner as he thinks fit. Alternatively, the court may direct that the land be sold as directed by the order.

(3) The court's order may contain directions—

(a) appointing the persons to have the conduct of the sale;

(b) fixing the manner of sale (whether by contract conditional on the court's approval, private treaty, public auction, or otherwise);

(d) obtaining evidence of the value of the property, and fixing a reserve or minimum price;

(e) requiring particular persons to join in the sale and conveyance;

(f) requiring the payment of the purchase money into the court, or to trustees or others;

(g) if the sale is to be by public auction, fixing the security (if any) to be given by the auctioneer, and his remuneration.

(4) The court may direct that, if the sale is to be by public auction, the mortgagee may appear and bid on his own behalf.

Proceeds of sale

6.196

(1) The proceeds of sale shall be applied—

(a) first, in payment of the expenses of the trustee, of and occasioned by the application to the court, of the sale and attendance thereat, and of any costs arising from the taking of accounts, and making of enquiries, as directed by the court under Rule 6.194; and

(b) secondly, in payment of the amount found due to any mortgagee, for principal, interest and costs;

and the balance (if any) shall be retained by or paid to the trustee.

(2) Where the proceeds of the sale are insufficient to pay in full the amount found due to any mortgagee, he is entitled to prove as a creditor for any deficiency, and to receive dividends rateably with other creditors, but not so as to disturb any dividend already declared.

CHAPTER 19 — AFTER-ACQUIRED PROPERTY OR INCREASED INCOME

Duties of bankrupt in respect of after-acquired property or increased income

6.197

(1) The notice to be given by the bankrupt to the trustee, under Article 306(2), of property acquired by, or devolving upon, him, or of any increase of his income, shall be given within 21 days of his becoming aware of the relevant facts.

(2) Having served notice in respect of property acquired by or devolving upon him, the bankrupt shall not, without the trustee's consent in writing, dispose of it within the period of 42 days beginning with the date of the notice.

(3) If the bankrupt disposes of property before giving the notice required by this Rule or in contravention of paragraph (2), it is his duty forthwith to disclose to the trustee the name and address of the disponee, and to provide any other information which may be necessary to enable the trustee to trace the property and recover it for the estate.

(4) Subject to paragraphs (5) and (6), paragraphs (1) to (3) do not apply to property acquired by the bankrupt in the ordinary course of a business carried on by him.

(5) If the bankrupt carries on a business, he shall, not less often than 6 monthly, furnish to the trustee information with respect to it, showing the total of goods bought and sold (or, as the case may be, services supplied) and the profit or loss arising from the business.

(6) The trustee may require the bankrupt to furnish fuller details (including accounts) of the business carried on by him.

Trustee's recourse to disponee of property

6.198

(1) Where property has been disposed of by the bankrupt, before giving the notice required by Rule 6.197 or otherwise in contravention of that Rule, the trustee may serve notice on the disponee, claiming the property as part of the estate by virtue of Article 280(3).

(2) The trustee's notice under this Rule must be served within 28 days of his becoming aware of the disponee's identity and an address at which he can be served.

Expenses of getting in property for the estate

6.199

Any expenses incurred by the trustee in acquiring title to after acquired property shall be paid out of the estate, in the prescribed order of priority.

CHAPTER 20 — LEAVE TO ACT AS DIRECTOR, ETC.

Application for leave

6.200

(1) An application by the bankrupt for leave, under Article 14 of the Companies (Northern Ireland) Order 1989 [^f00026], to act as director of, or to take part or be concerned in the promotion, formation or management of a company, shall be supported by an affidavit complying with this Rule.

(2) The affidavit must identify the company and specify—

(a) the nature of its business or intended business, and the place or places where that business is, or is to be, carried on,

(b) whether it is, or is to be, a private or a public company,

(c) the persons who are, or are to be, principally responsible for the conduct of its affairs (whether as directors, shadow directors, managers or otherwise),

(d) the manner and capacity in which the applicant proposes to take part or be concerned in the promotion or formation of the company or, as the case may be, its management, and

(e) the emoluments and other benefits to be obtained from the directorship.

(3) If the company is already in existence, the affidavit must specify the date of its incorporation and the amount of its nominal and issued share capital; and if not, it must specify the amount, or approximate amount, of its proposed commencing share capital, and the sources from which that capital is to be obtained.

(4) Where the bankrupt intends to take part or be concerned in the promotion or formation of a company, the affidavit must contain an undertaking by him that he will, within not less than 7 days of the company being incorporated, file in court a copy of its memorandum of association and certificate of incorporation under Article 24 of the Companies Order.

(5) The court shall fix a venue for the hearing of the bankrupt's application, and give notice to him accordingly.

Report of official receiver

6.201

(1) The bankrupt shall, not less than 28 days before the hearing date, give to the official receiver and the trustee notice of the venue, accompanied by copies of the application and the affidavit under Rule 6.200.

(2) The official receiver may, not less than 14 days before the hearing date, file in court a report of any matters which he considers ought to be drawn to the court's attention. A copy of the report shall be sent by him, forthwith after it is filed, to the bankrupt and to the trustee.

(3) The bankrupt may, not later than 7 days before the hearing date, file in court a notice specifying any statements in the official receiver's report which he intends to deny or dispute.

(4) If he gives notice under paragraph (3), he shall send copies of it, not less than 4 days before the hearing date, to the official receiver and the trustee.

(5) The official receiver and the trustee may appear on the hearing of the application, and may make representations and put to the bankrupt such questions as the court may allow.

Court's order on application

6.202

(1) If the court grants the bankrupt's application for leave under Article 14 of the Companies (Northern Ireland) Order 1989, its order shall specify that which by virtue of the order the bankrupt has leave to do.

(2) The court may at the same time, having regard to any representations made by the trustee on the hearing of the application—

(a) include in the order provision varying an income payments order already in force in respect of the bankrupt, or

(b) if no income payments order is in force, make one.

(3) Whether or not the application is granted, copies of the order shall be sent by the court to the bankrupt, the trustee and the official receiver.

CHAPTER 21 — ANNULMENT OF BANKRUPTCY ORDER

Application for annulment

6.203

(1) An application to the court under Article 256(1) for the annulment of a bankruptcy order shall specify whether it is made—

(a) under Article 256 (1)(a) (claim that the order ought not to have been made), or

(b) under Article 256 (1)(b) (debts and expenses of the bankruptcy all paid or secured).

(2) The application shall, in either case, be supported by an affidavit stating the grounds on which it is made; and, where it is made under Article 256(1)(b), there shall be set out in the affidavit all the facts by reference to which the court is, under the Order and the Rules, required to be satisfied before annulling the bankruptcy order.

(3) A copy of the application and supporting affidavit shall be filed in court; and the court shall give to the applicant notice of the venue fixed for the hearing.

(4) The applicant shall give to the official receiver and (if other) the trustee notice of the venue, accompanied by copies of the application and the affidavit under paragraph (2)—

(a) where the application is made under Article 256(1)(a), in sufficient time to enable them to be present at the hearing, and

(b) where the application is made under Article 256 (1)(b), not less than 28 days before the hearing date.

(5) Where the application is made under Article 256(1)(a), paragraph (4) shall additionally be complied with in relation to the person on whose petition the bankruptcy order was made.

Report by trustee

6.204

(1) This Rule applies where the application is made under Article 256(1)(b) (debts and expenses of the bankruptcy all paid or secured).

(2) Not less than 21 days before the hearing date, the trustee or, if no trustee has been appointed, the official receiver shall file in court a report with respect to the following matters—

(a) the circumstances leading to the bankruptcy;

(b) (in summarised form) the extent of the bankrupt's assets and liabilities at the date of the bankruptcy order and at the date of the present application;

(d) such other matters as the person making the report considers to be, in the circumstances, necessary for the information of the court.

(3) The report shall include particulars of the extent (if any) to which, and the manner in which, the debts and expenses of the bankruptcy have been paid or secured.

(4) In so far as debts and expenses are unpaid but secured, the person making the report shall state in it whether and to what extent he considers the security to be satisfactory.

(5) A copy of the report shall be sent to the applicant at least 14 days before the hearing date; and he may, if he wishes, file further affidavits in answer to statements made in the report.

(6) Copies of any affidavits filed under paragraph (5) shall be sent by the applicant to the official receiver and (if other) the trustee.

(7) If the trustee is other than the official receiver, a copy of his report shall be sent to the official receiver at least 21 days before the hearing date. The official receiver may then file an additional report, a copy of which shall be sent to the applicant at least 7 days before the hearing date.

Power of court to stay proceedings

6.205

(1) The court may, in advance of the hearing date, make an interim order staying any proceedings which it thinks ought, in the circumstances of the application, to be stayed.

(2) Except in relation to an application for an order staying all or any part of the proceedings in the bankruptcy, application for an order under this Rule may be made ex parte.

(3) Where application is made under this Rule for an order staying all or any part of the proceedings in the bankruptcy, the applicant shall send copies of the application to the official receiver and (if other) the trustee in sufficient time to enable them to be present at the hearing and (if they wish to do so) make representations.

(4) Where the court makes an order under this Rule staying all or any part of the proceedings in the bankruptcy, this Chapter nevertheless continues to apply to any application for, or other matters in connection with, the annulment of the bankruptcy order.

(5) If the court makes an order under this Rule, it shall send copies of the order to the applicant, the official receiver and (if other) the trustee.

Notice to creditors who have not proved

6.206

Where the application for annulment is made under Article 256(1)(b) and it has been reported to the court under Rule 6.204 that there are known creditors of the bankrupt who have not proved, the court may—

(a) direct the trustee or, if no trustee has been appointed, the official receiver to send notice of the application to such of those creditors as the court thinks ought to be informed of it, with a view to their proving their debts (if they so wish) within 21 days, and

(b) direct the trustee or, if no trustee has been appointed, the official receiver to advertise the fact that the application has been made, so that creditors who have not proved may do so within a specified time, and

The hearing

6.207

(1) The trustee shall attend the hearing of the application.

(2) The official receiver, if he is not the trustee, may attend, but is not required to do so unless he has filed a report under Rule 6.204.

Matters to be proved under Article 256(1)(b)

6.208

(1) This Rule applies with regard to the matters which must, in an application under Article 256(1)(b), be proved to the satisfaction of the court.

(2) Subject to paragraph (3), all bankruptcy debts which have been proved must have been paid in full.

(3) If a debt is disputed, or a creditor who has proved can no longer be traced, the bankrupt must have given such security (in the form of money paid into court, or a bond) as the court considers adequate to satisfy any sum that may subsequently be proved to be due to the creditor concerned and (if the court thinks fit) costs.

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