In re Alecos Constantinou (1987) JSC 426

[*426] 1986 February 27

(KALLIS, D.J.)

IN THE DISTRICT COURT OF NICOSIA

Re: Alecos Constantinou,

Debtor.

(Bankruptcy Petition No. 72/ 85).

Bankruptcy - Receiving Order - Proof of the debt - Amount of - Material date - Section 5(1)(a) and 6(2) of the Bankruptcy Law, Cap. 5 - Amendment of section 5(1)(a) after filing of proceedings - Amount of debt required as a prerequisite for a receiving order is the one provided by the amending law.

St. Triantafyllides, for the Petitioners.

JUDGMENT

The following judgment was delivered by:

KALLIS D.J.: Need arose to pronounce on the meaning and effect of section 5(1)(a) of the Bankruptcy Law, Cap. 5.

On May 23, 1985, the petitioners filed a petition for a receiving order thereby contending that the debtor was indebted to them in the sum of £1,056. The petition was repeatedly adjourned at the instance of the petitioners and when on the 30.1.86 they proceeded to prove the petition it emerged that during the pendency thereof the debtor had made various payments and the balance of his debt was £377.38. At the time of filing of the petition - 23.5.85 - the position regarding the amount of the debt was governed by s. 5(1)(a) of the Bankruptcy Law, Cap. 5 which runs as follows:

"5(1)(a). A creditor shall not be entitled to present a bankruptcy petition against a debtor unless – [* 427]

(a) the debt owing by the debtor to the petitioning-creditor, or, if two or more creditors Join in the petition, the aggregate amount of debts owing to the several petitioning- creditors amounts to fifty pounds".

Section 5(1)(a) was amended on 31.5.85 by means of Law 49/ 85 and the "fifty" pounds were substituted by "five hundred pounds".

As the amount of the debt was below £500.- the Court raised the issue whether a receiving order could be made; and learned counsel for the petitioner submitted, in effect, that as both at the time of filing of the petition and at the time of hearing thereof the debt exceeded £50- a receiving order could be made by virtue of the combined effect of sections 5(1)(a) and section 6(2) of Cap. 5.

Now section 6(2) provides as follows:

"6(2) At the hearing of the petition, the Court shall require proof of the debt of the petitioning creditor, of the service of the petition, and of the act of Bankruptcy, or, if more than one act of bankruptcy is alleged in the petition, of some one of the alleged acts of bankruptcy, and, if satisfied with such proof, shall make a receiving order in pursuance of the petition".

As it will be seen from the contents of the aforequoted section 6 (2) there are enumerated therein the prerequisites under which a receiving order may be made; and one such prerequisite is "proof of the debt of the petitioning creditor".

Now by what provision, the one before or the one after the amendment is the amount of the debt to be governed? Having anxiously considered the position in the light, especially of the wording of section 6(2), I have arrived at the conclusion and so hold that the amount of the debt must be governed by the statutory provision in force at the time of hearing. And, therefore, after the amendment of s. 5(1)(a) no receiving [*428] order can be made in cases where the debt at the time of the making of the receiving order is below £500- This conclusion of mine is supported by a passage from Williams and Muir Hunter The Law and Practice in Bankruptcy 19th ed. where in a note to s. 5(2) of the Bankruptcy Act, 1914, of which our own section 6(2) is a replica, the following are stated at p. 56:

"Since bankruptcy affects not only the debtor and his creditors, but also the general public, the court has a duty to see that all requirements of the act and Rules have been observed. The petitioning creditor's debt must be proved not only to have existed at the date of the act of Bankruptcy and at the time of the presentation of the petition, but also to exist at the hearing and down to the making of the receiving order".

In this case the petitioning creditor's debt was admittedly below the statutory minimum of £500.- at the hearing; and in view of my above conclusion no receiving order can be made and the petition is, accordingly, dismissed with no order as to costs.

Petition dismissed with costs.