Donohoe v Ingram

Donohoe v Ingram [2006] EWHC 282 (Ch)

The impact of exceptional circumstances on sales orders resultant from bankruptcy; can sales orders violate human rights.

Facts

A couple jointly occupied a home alongside their children. The father subsequently entered bankruptcy and their creditors sought to enforce sale of the property so as to recuperate their debts as per the Insolvency Act 1986, s. 335A. The mother, Donohoe, attempted to assert a beneficial interest on behalf of her and her children, citing exceptional circumstances and requesting that sale of the property be halted until the children reached adulthood. Moreover, Donohoe asserted it would be in violation of their human rights to require them to vacate their family home in these circumstances. The creditors submitted the counter claim that a delay on sale may see the property’s value lessen, thus increasing the risk that they would not receive the full payment that they were due. Further, it was unclear how the matter of interest on the money owed by the bankrupt would be dealt with were such a delaying order issued.

Issues

Were there sufficient exceptional circumstances present to justify the issuing of a delaying order despite the risk it would expose the creditors to. Furthermore, would it be a human rights violation to require the family to leave their family home.

Decision/Outcome

The Court found Donohoe’s human rights claims to be unpersuasive, stating that the issuing of a sales order violated no such rights. Whilst there may be circumstances in which claims like Donohoe’s prove compelling to a Court, given the risk it would expose the creditors to in terms of being able to reclaim the debts owed them, alongside the issue of interest, there were insufficient grounds for a delaying order to be granted.