Although the decision has been overturned by the Court of Appeal, it is reassuring that the view remains that a bankrupt cannot avoid an IPO by simply declaring himself bankrupt for a second time. The Court took a sensible view that the provisions for discharged and undischarged bankrupts should mirror each other. Further, if a bankrupt falsely declares himself bankrupt in order to avoid certain debts, the Court is likely to annul the bankruptcy or may also make other appropriate orders.
The Court of Appeal agreed with the previous finding that a bankrupt could not avoid an IPO by becoming bankrupt again; however, they found that arrears and future payments under an IPO would be provable debts in the second bankruptcy stating that “future periodical payments due under a variable court order… are provable debts” and would be available for the benefit of the second bankruptcy estate, as is the case with undischarged bankrupts. The Court of Appeal also found that if the bankrupt was not insolvent or the evidence on insolvency for the second bankrupt was found to be false, the court could annul the bankruptcy order. The Court of Appeal also noted that the Trustee was entitled to apply for a new IPO against Mr Azuonye in the second bankruptcy.