The bankrupt’s trustee applied for a possession order of his home. The bankrupt unsuccessfully appealed his bankruptcy, the order in litigation that had led to his bankruptcy and the possession order, but he refused throughout to give up possession and applied for a committal order. The court found the bankrupt in contempt of court for failing to give possession and sentenced him to six months’ imprisonment.

Although this case is about a trustee in bankruptcy’s fight to realise his interest in a property by virtue of a debtor’s bankruptcy, the facts (though extreme) are not untypical of a finance company’s position when a hirer refuses to return goods to it despite the fact the court has ordered the hirer to do so.

In this case Mr Canty was made bankrupt in relation to a relatively small debt and he never accepted the position. There followed a number of appeals and challenges over the following years in which he attempted to reopen and relitigate earlier proceedings.

1. Introduction

Most reading this will know that freezing orders are granted to prohibit defendants from disposing of or dissipating their assets in a way that will prevent the claimant from enforcing any judgment he obtains. If the defendant disobeys, he is at risk of contempt. But the primary purpose of contempt is to punish the defendant. Many claimants will simply be concerned to ensure that the defendant’s money is frozen.

In a recent opinion (Masri v Consolidated Contractors International Co. SAL and others [2009] UKHL 43) handed down in the final days of the House of Lords, their Lordships clarified a point which may be of some significance for successful claimants seeking to enforce a Court order against corporate defendants.  

In Walchuk v. Houghton, the Ontario Court of Appeal held that the stay of all proceedings against a bankrupt pursuant to the Bankruptcy and Insolvency Act applies to a contempt motion brought by a judgment credi​tor where the contempt arises after the bankruptcy.