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BANKRUPT TENANT DENIES DUTY TO PAY RENT ARREARS

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A council tenant who claims his rent arrears should be 'wiped out' due to his status as a bankrupt has clashed with...
A council tenant who claims his rent arrears should be 'wiped out' due to his status as a bankrupt has clashed with his landlords in an appeal court test case which could have consequences for local authorities countrywide.

The dispute pits Norman John Hall against Harlow DC over the tenant's claim that his£1,662 rent arrears should be written off due to his having been declared bankrupt.

Mr Hall, a Harlow DC tenant for over 35 years, was brought before the county court last January, when a district judge made a possession order in favour of the local authority due to the arrears.

The order related to his tenancy of a property in The Stow, Harlow, which he first moved in to in 1970.

It was suspended on condition that Mr Hall pay off his arrears - now£1,827 including legal costs - at a rate of£10 per week, later scaled down to£5 per week.

Mr Hall appealed on grounds that the 'judgement debt' - comprising the arrears - was unenforceable, but had his case rejected by a county court judge last July.

That ruling prompted his latest challenge before the appeal court, which raises a crucial legal issue over whether the civil courts can enforce payment of rent arrears where a tenant has been declared bankrupt.

The case's potential ramifications were highlighted by Judge O'Brien, who dealt with Mr Hall's case last July, who recognised that a ruling in his favour would have 'far-reaching consequences for housing authorities up and down the country'.

The question is particularly sensitive because of the growing number of registered bankruptcies - rising from 28,000 to 35,000 in 2004 - and the fact that a bankrupt will now be automatically discharged after just one year.

Ian Loveland - Mr Hall's barrister - claimed the arrears should not be paid off as his client had been adjudged bankrupt last February, just a month after the possession order was made against him.

He cited the 1986 Insolvency Act to back his claims that any rent arrears existing at the time of his bankruptcy petition constituted a 'proveable debt' which should be written off due to his status as a bankrupt.

At the end of the hearing the chancellor of the High Court Chancery Division, Andrew Morritt, Lord Justice Chadwick, and Judge Paul Kennedy recognised the importance of the case, by reserving their ruling until a later, unspecified, date.

Sir Andrew said the court needed time to consider its decision in view of the 'public interest' issues involved.

STRAND NEWS SERVICE

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