A bankruptcy petition was issued against the debtor. Following unsuccessful attempts to serve it on the debtor personally, the process server posted the petition through the debtor’s letter box. On the creditor’s subsequent application for substituted service, pursuant to rule 6.14(2) of the Insolvency Rules 1986, the judge ordered that the earlier posting of the petition through the debtor’s letter box be deemed good service. The debtor’s application to set aside the order for substituted service and annul the bankruptcy order was refused.
On the debtor’s appeal and the question whether a failure to comply with the rules relating to service was a “formal defect” or “irregularity” for the purposes of rule 7.55 and therefore did not invalidate the proceedings—
Held, appeal allowed in part. (1) It was clear from the wording of rule 6.14(2) of the Insolvency Rules 1986 that steps already taken to bring a petition to the debtor’s attention, could not subsequently become substituted service authorised by the court. Moreover, there was no general power to authorise retrospective substituted service either under the provisions of the CPR or the court’s inherent jurisdiction. Accordingly, the order for substituted service had been made without jurisdiction and would be set aside (paras 48, 50–52, 55, 67).
(2) Whether a deficiency constituted a “formal defect” or “irregularity” falling within the scope of rule 7.55 of the Insolvency Rules 1986 depended on both the nature of the requirement that had not been complied with and the circumstances of that failure. The obligation under the Insolvency Rules for service of a petition was notably higher than for a statutory demand, reflecting the fact that a petition could lead directly to the making of a bankruptcy order. Accordingly, the improperly made order for substituted service could not be characterised as a “formal defect” or “irregularity” but was a fundamental failure regarding the rules as to service. In the circumstances, however, it was not appropriate to exercise the discretionary power to annul the bankruptcy order (paras 56, 61, 66–67).
Canning v Irwin Mitchell llp [2017] EWHC 718 (Ch); [2017] BPIR 934 considered.
Alan Tunkel (instructed directly) for the debtor.
Oberon Kwok (instructed by Sydney Mitchell llp) for the creditor.
Katie Longstaff (instructed by Morgan Phelps Solicitors) for the trustee in bankruptcy.