Bankruptcy is No Soft Option

This post was originally published on this site

In a case which bitterly illustrated the consequences of failing to keep tax matters in order, a wedding photographer who went bankrupt, owing the tax authorities more than £80,000, has failed to convince the High Court that his trustee in bankruptcy mishandled his affairs.

The photographer argued that his trustee had, amongst other things, failed to pay him sufficient interest on a bank account balance, wrongly sold his car – which he viewed as an essential tool of his trade – and unjustifiably shut down his ISA. The trustee was also said to have delayed unreasonably in allowing the photographer to obtain his discharge from bankruptcy, with the result that he was uninsured when £8,000-worth of camera equipment was stolen from his car.

The photographer sought reversal or modification of the trustee’s decisions and actions under Section 303(1) of the Insolvency Act 1986. However, his criticisms of the trustee were rejected by a deputy district judge, who noted that it was the trustee’s duty to realise the photographer’s assets at the best available price for the benefit of his creditor, HM Revenue and Customs.

In dismissing his appeal against that ruling, the Court noted that Section 303 could only be invoked in circumstances where a decision or act of a trustee was one which no trustee, acting reasonably, could have made. The photographer had, on the evidence, failed to surmount that hurdle.