In the matter of an application by the Applicant/Debtor to rescind, discharge and/or review the receiving order made on 7/6/90
The bottom line
#A Kenyan court refused to undo a bankruptcy order, ruling that once bankruptcy starts, debtors must work through the Official Receiver, not return to court.
What this practically means
#Executive summary
#Key legal issues
#Res judicata and abuse of process via fresh application
A similar earlier application dismissed for want of prosecution by Githinji J renders the fresh application res judicata absent new matter
Githinji J had heard the Respondent and Official Receiver and delivered a ruling; the applicant gave no reason for non-appearance and never appealed, set aside or reviewed that order. Bringing a fresh application instead of appealing or seeking review was an attempt to have the court sit on appeal over a brother judge's ruling, which it would not do.
Scope for rescinding or halting bankruptcy after a receiving order
Only very limited scope, in exceptional circumstances, exists to undo or halt bankruptcy once a regular receiving order is made; none existed here
Relying on Re a Debtor (No.12 of 1970), the court held the receiving order of 7/6/90 was regular and in full force. The applicant knew of the debt, judgment, bankruptcy notice, petition and hearing, and offered nothing new or exceptional warranting rescission, discharge or review under section 108 of the Bankruptcy Act.
Proper channel for debtor relief after receiving order
The debtor must approach the Official Receiver, who may move under Rule 160 onwards, e.g. propose a scheme of repaying creditors
The court held it had no jurisdiction to deal with a stay directly with the applicant. The applicant's remedy lies with the Official Receiver, who could convene creditors to consider a scheme allowing sale of properties by private treaty to pay debts and exit bankruptcy.
Legal principles established
#- Once a receiving order is made, the bankruptcy processes are fully launched and there is only limited scope for undoing or halting the bankruptcy, and only in exceptional circumstances
- A court of first instance will not sit on appeal over a ruling and order of a brother judge of concurrent jurisdiction
- After a receiving order, the debtor cannot deal with the court directly but only through the Official Receiver
Court orders
#- 1.The application dated 7/6/91 is dismissed with costs
- Jurisdiction invoked
- Section 108 of the Bankruptcy Act and Rules 144 and 147 made thereunder
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "In the matter of an application by the Applicant/Debtor to rescind, discharge and/or review the receiving order made on 7/6/90", Case Analysis (1991). Bankruptcy motion filed 8/5/91 (case number not stated in judgment). Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.