Chancery Division [1996] 1 W.L.R 1420
Cruickshanks acted for the applicant. The applicant and his wife executed a charge over their home in favour of BCCI. After BCCI’s compulsory winding up, it began proceedings to enforce the security. The claimant’s wife alleged that the security was unenforceable against her on the grounds of undue influence. The size of the security was sufficient to discharge the debt owed to BCCI. BCCI presented a bankruptcy petition against the claimant claiming a statement under the Insolvency Act s.269 that it would give up its security in the event that a bankruptcy order was made. The claimant contended that the bankruptcy order should not be allowed to be used to circumvent their other claims under other heads against BCCI. It was held, dismissing the appeal that BCCI could enforce its security over the property by virtue of the Law of Property Act 1925 s.30 without recourse to bankruptcy proceedings. S.269 was available to BCCI even if the debtor had no other creditors and there was no improper use by BCCI of the bankruptcy procedure.
