In his judgment in the matter of Ardawa v Uppal & Jordan EWHC 456 (Ch) Mr Justice Roth declined to annul a bankruptcy order, despite finding that the petition had not been properly served, highlighting the importance of the Court’s ability to exercise a discretion when considering an application to annul.
The matter had a lengthy history. The statutory demand had been served by substituted service by a process server and on 1 February 2016 the process server left a copy of the petition at the debtor’s property, having been unable to effect personal service earlier in the day. District Judge Hickman subsequently made an order on 17 February 2016 that the actions on 1 February 2016 constituted good service of the petition (a retrospective order for substituted service). A bankruptcy order was subsequently made on 6 April 2016.
The Debtor subsequently made an application to set aside the bankruptcy order under s.282(1)(a) Insolvency Act 1986. There were multiple grounds for the application, including that District Judge Hickman did not have the discretion to make the retrospective service order on 17 February 2016. District Judge Thorpe declined to set aside District Judge Hickman’s order and dismissed the application, noting that even if there had been a procedural irregularity she would, in her discretion, decline to annul the bankruptcy order, given her various findings of fact. The Debtor appealed.
Roth J held that the Court had no power to retrospectively allow substituted service and so agreed with the Debtor that the order of District Judge Hickman was not valid and therefore there had not been good service of the petition. Whilst Roth J acknowledged that the Court would not have granted the bankruptcy order on 5 April 2016 had it been aware of the issue relating to service, he was still not prepared to exercise his discretion to annul the order. He noted that there had been a finding of fact (notwithstanding the lack of good service) that the Debtor was aware of the petition and all the indications suggested the Debtor was deliberately seeking to evade service.