The High Court ordered a discharged bankrupt to pay the Official Assignee’s costs in proceedings concerning directions about pension assets. The court made no order on the discharged bankrupt’s own costs and adjourned the matter to allow an updated draft order to be prepared.
The judgment, delivered by Mr Justice Humphreys on 2 December 2021, dealt with costs and the form of an order after a previous ruling by Ms Justice Pilkington. That ruling, delivered on 29 January 2021, answered questions arising from the Official Assignee’s application for directions but left costs for later submissions. The judge said he had to treat that ruling as settled and give effect to it when dealing with the outstanding matters.
The debtor had been adjudicated bankrupt in January 2014 and discharged in July 2016. The original directions application was brought by Christopher Lehane, then Official Assignee. After he retired in July 2020, Michael Ian Larkin was appointed to the role in November 2020. The discharged bankrupt consented to Mr Larkin replacing Mr Lehane as applicant, and the court ordered the substitution.
In considering costs, the judge applied the general principle that costs follow the event. He said the outcome of the directions application had predominantly favoured the Official Assignee’s proposed answers. He acknowledged uncertainty in the law, the pension company’s doubts about the legal position and that it was difficult to fault the discharged bankrupt for not cooperating with the transfer of pension assets before it was determined who owned them. But he found insufficient grounds to depart from the usual costs principle and declined to award the applicant’s costs against other parties in the application.
For the Official Assignee’s costs, the judge considered payment from the bankruptcy estate or a costs order against the discharged bankrupt. He chose the latter, noting that payment from the estate would affect creditors who were not before the court.
The judge also identified changes needed to the proposed order, including a qualification to one answer about pension assets and the possibility of seeking a specific direction in an individual case. He proposed allowing a motion for directions if needed and giving the parties an opportunity to consider whether a requested stay and further cooperation could be reconciled. The final order adjourned the matter to 6 December 2021 for mention, to allow an updated draft order to be prepared, ideally by agreement.