Colchester Estates (Cardiff) v Carlton Industries Plc (1984) 2 All ER 601 established the principle that where there are two conflicting decisions of the High Court, the latter decision is to be preferred, provided it was reached after full consideration of the earlier decision, unless the third judge is convinced that the second was wrong in not following the first (“the Colchester Estates principle”).
Applications for Income Payment Orders (“IPO”) pursuant to section 310 of the Insolvency Act 1986 (“s.310”) are now being adjourned, vacated or stayed throughout the country following the recent judgment of Deputy Judge Englehart QC in the matter of Horton v Henry  HC 11 C 03085 (“Henry”). Deputy Judge Englehart QC dismissed the trustee in bankruptcy’s s.310 application for an IPO in respect of payments that could be made to Mr. Henry from his personal pension policies that were not yet in payment. General commentary on the Henry judgment has considered it to be in direct conflict with the earlier judgment of Deputy Judge Livesey QC in Raithatha v Williamson  EWHC 909 (“Raithatha”), in which the possibility of a s.310 application was acknowledged, even though the matter before the court was an injunction to restrain the bankrupt from dealing with his pension. Notwithstanding general commentary, the Colchester Estates principle suggests that the present position is more unfavourable to trustees than a mere conflict of judgments; Colchester Estates suggests that the decision in Henry is now to be preferred.
Accordingly, the opportunity afforded to trustees in bankruptcy by Raithatha is now doubted by Henry, which is to be preferred unless and until an appeal is heard; until then, pensioners can temporarily rest assured that their undrawn personal pension savings are out of the trustee’s reach. It should not be overlooked that Deputy Judge Englehart QC reached his decision with some reluctance and, when making his order, simultaneously granted the trustee permission to appeal. Trustees and pensioners alike: watch this space!
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