P sought to have a bankruptcy petition set aside. An interim order had been made to enable a meeting to take place to discuss her proposal for an individual voluntary arrangement (IVA). P lived a considerable distance away from the offices of C, the nominee. At the meeting, which took place in P's absence, major amendments were made to the proposal. P later reluctantly agreed to those changes, but the meeting had not been adjourned to obtain her consent and the chairman's report was sent to the court prior to P's agreement being received. The IVA failed two years later. C responded by issuing a certificate of non compliance, presenting a bankruptcy petition and seeking appointment as P's trustee in bankruptcy. P argued that the IVA was invalid because she had not agreed to the alterations at the meeting and that no adjournment had been allowed for her consent to be obtained.
Held, granting the application, that the report filed by the chair of the meeting was incorrect as P's consent to the changes was an essential requirement of the creditors' meeting. The invalidity of the IVA meant that the 28 day period in which to challenge it on the basis of a "material irregularity " under the Insolvency Act 1986 s. 262 did not apply and C had no standing to present the bankruptcy petition