Bankruptcy and Debts Owed

The Insolvency Act 1986 establishes a process by which a debtor may be made bankrupt in respect of debts which are “owed” (ss.267, 268 Insolvency Act 1968).

A landlord must provide a tenant with an address in England or Wales where notices, including notices in proceedings, may be served on him by the tenant (s.48(1), Landlord and Tenant Act 1987). Rent, service charges or administration charges are not to be treated as due from the tenant at any time before that address is provided.

In the case of Sunset Ltd and another v Al-Hindi [2023] EWHC 2443 (Ch), Sunset Ltd presented a bankruptcy petition in respect of Mr Al-Hindi alleging that he owed £248,750 in respect of four properties which he had rented from them as tenant. He defended the bankruptcy proceedings and alleged, amongst other things, that the rent was not yet due because Sunset Ltd had not complied with s.48, having only provided an address for service in Jersey. Sunset Ltd responded by serving a document which it contended complied with the requirements of s.48.

The bankruptcy petition was dismissed by Judge Mullen. A bankruptcy petition could only be presented in respect of a debt which was “owed”. When the petition was presented, the rent had not been due at all because, at that time, there had been non-compliance with s.48. Providing the s.48 details after the presentation of the petition did not retrospectively solve that problem.

 

Oliver Kew

Published on 11/10/2023

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