B2/2000/2545
B3/2000/2545
Neutral Citation Number: [2001] EWCA Civ 202
IN THE SUPREME COURT OF JUDICATURE                               
IN THE COURT OF APPEAL (CIVIL DIVISION)                                             
ON APPEAL FROM THE CHANCERY DIVISION
(His Honour Judge Weeks QC)
								Royal Courts of Justice
								Strand
								London WC2

								Friday, 2nd February 2001
B e f o r e:

LORD JUSTICE PETER GIBSON

LORD JUSTICE CHADWICK

LORD JUSTICE KEENE

- - - - - -

MALCOLM ELLIS CORK
(as trustee in bankruptcy of Alan James Rawlins)
Applicant/Respondent

- v -

ALAN JAMES RAWLINS
Respondent/Appellant
- - - - - -
(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 190 Fleet Street,
London EC4A 2AG
Tel: 0171 421 4040
Official Shorthand Writers to the Court)
- - - - - -
MR LOUIS DOYLE (Instructed by Freeth Cartwright Solicitors, Willoughby House, 20 Low Pavement, Nottingham, NG2 7EA) appeared on behalf of the Appellant.

MR STEPHEN DAVIES (Instructed by Messrs Osborne Clarke, 50 Queen Charlotte Street, Bristol, BS14 HL) appeared on behalf of the Respondent.
- - - - - -

J U D G M E N T

Friday, 2nd February 2001 
1.	LORD JUSTICE PETER GIBSON: This is an appeal by Alan Rawlins, the respondent to an application made under section 303(2) of the Insolvency Act 1986 (“the Act”) by his trustee in bankruptcy, Malcolm Cork. On 7th April 2000 His Honour Judge Weeks QC, sitting as a judge of the High Court in the Chancery Division, declared at the hearing of that application that the sums payable under two assurance policies effected by Mr Rawlins with Abbey Life before he became bankrupt became vested in the trustee pursuant to section 306 of the Act. The judge gave Mr Rawlins permission to appeal. The judge's judgment is now reported [2000] BPIR 654, and I need only state such of the background facts as are necessary to make this judgment comprehensible. 
2.	Of the two policies, one, called a Living Assurance policy, commenced on 9th October 1987. It was a whole life policy on Mr Rawlins' life and provided for earlier payment “on receipt by [Abbey Life] of proof satisfactory to [Abbey Life's] Chief Medical Officer that the Life Assured had become disabled such that entitlement arises to the Permanent Disablement Benefit.” That benefit was “a benefit equivalent to the Death Benefit payable if the Life Assured had died on the date of receipt of such satisfactory proof.” The sum payable was £40,000. The entitlement to permanent disablement benefit was expressed to arise “if the Life Assured has become permanently disabled before his .... 60th birthday through sickness or injury contracted after the Commencement Date and is registered as disabled”. The other policy, called a MortgageMaster Endowment policy, commenced on 12th November 1990. It had a 23-year term but it provided for earlier payment on the same contingency as the earlier policy. The sum payable was £30,000. Thus in the case of the first policy the sum assured did not change, whether the event on which the sum was payable was the death or the proof of disablement. Similarly in the case of the other policy, the sum assured was the same whether it became payable at the end of the contractual term or on the earlier receipt of proof of disablement. 
3.	Mr Rawlins was a self‑employed landscape gardener and also carried on a retail shop business. He specialised in the construction and sale of water features and ornamental pools. In January 1993 he had an accident whilst engaged in construction work and sustained a serious injury. He was unable to continue working. He submitted a claim under the policies to Abbey Life in the summer of 1993. On 2nd April 1996 a bankruptcy order was made against him on the petition of a trade creditor. On 19th June 1996 he allowed himself to be examined medically for the purpose of his policies. On 16th September 1996 Abbey Life accepted that it had received proof of disablement such that entitlement to the permanent disablement benefit arose under both policies. 
4.	On the making of the bankruptcy order the Official Receiver became the trustee, but Mr Cork was appointed trustee in his place on 4th March 1997. On 27th May 1997 Abbey Life by letter informed the trustee that it accepted that Mr Rawlins was permanently disabled and that £70,000 in total was available to be claimed. The trustee's solicitors on 3rd April 1998 wrote asking whether the payment of £70,000 related to compensation for loss of earnings or for pain and suffering. On 27th April 1998 Abbey Life replied: 
“The £70,000.00 benefit is neither compensation for loss of earnings nor compensation for pain and suffering. 
Mr Rawlins purchased life assurance policies with a supplementary sickness benefit attached to the same. The total and permanent disability benefit provides to pay the full sums assured in the event of our Chief Medical Officer being satisfied that the claimant is disabled such that he will never work in any occupation for the remainder of his lifetime. 
Our Chief Medical Officer was satisfied that Mr Rawlins' medical condition met [these] criteria.” 
5.	The trustee claimed that he was entitled to the policy monies. Mr Rawlins disputed that claim. The trustee therefore made the application which came before the judge. Mr Rawlins was then represented by counsel other that Mr Louis Doyle who appears for Mr Rawlins on this appeal. 
6.	The Judge first considered whether the rights to the policy monies were properly comprised in the bankrupt's estate which vested in the trustee. The Judge held that the contract between Mr Rawlins and Abbey Life in relation to each policy created one right or bundle of rights which he could have assigned before his bankruptcy and which vested in the Official Receiver on his bankruptcy. The Judge then considered whether the benefits of each policy, or any of them, were to be held for Mr Rawlins. The Judge accepted that the events on which the policy monies were payable included his permanent disablement, which was likely to involve him in pain and suffering. But he said that the monies payable under the policies were not in any way related or calculated by reference to Mr Rawlins' pain and suffering and that all that permanent disablement did was to advance the date on which the policy monies were payable. The Judge therefore held that the monies were payable only to the trustee to be divided among the creditors and that no part of them was held by the trustee for Mr Rawlins.
7.	Mr Rawlins on this appeal wishes to challenge the Judge's conclusion. He initially acted in person and he has made plain in the various documents which he has submitted to this court his extreme unhappiness with the result. He objects strongly to being denied the policy monies which might have supported him in coping with his disability, and he has put forward a large number of grounds on which he sought to appeal. But sensibly he has now entrusted this appeal to legal representatives for him. 
8.	Mr Doyle in his skeleton argument advanced initially three grounds of appeal, but he has now abandoned two of them, that is to say the submission that no cause of action existed at the date of the bankruptcy order and that therefore no property vested in the Official Receiver on the making of that order, and further that the proceeds of the policies constituted income within section 310(7) of the Act so as not to form property within the bankrupt's estate. In my judgment Mr Doyle was right not to pursue those submissions. That leaves a single ground of appeal, that is to say that the cause of action is personal to Mr Rawlins and did not vest in the trustee by virtue of the payment remaining conditional on his personal pain and suffering. 
9.	Before considering that submission it is convenient to go to the relevant provisions of the Act. Mr Doyle asked us, when considering the statutory provisions, also to take account of the effects of social change since the older authorities were decided and since the Bankruptcy Act 1914 (such as the reforms pursuant to the Beveridge Committee Report and the reforms effected by Acts such as the Welfare Reform Pensions Act 1999). He asks us to take into account the recommendations set out by the Cork Committee in its report ((1982) Cmnd 8558), the substantial implementation of which was effected by the Act, and he asks us to take into account the change in the approach adopted by Parliament in enacting it. For my part, I do not doubt that this court can look at the Cork Report to identify the mischief which the Act was intended to obviate, but the intention of Parliament falls to be ascertained primarily from the language used in the Act, and I cannot accept suggestions, based on other reforms in other fields, as to what was intended to be achieved by the Act. We were asked by Mr Doyle in particular to note from paragraphs 192(a) and 198(c) of the Cork Report that the objectives included: 
(i)to offer the opportunity for rehabilitation subject to making a contribution to creditors from future earnings without reducing the insolvent and his family to undue and socially unacceptable poverty and without depriving him of the incentive to succeed in a fresh start; and
(ii)to relieve the insolvent from harassment and undue demands by creditors whilst taking into account the rights which the individual insolvent and his family should legitimately continue to enjoy.
10.	I have to say that neither of those objectives seem to me to be in point. The first relates to the rehabilitation of the insolvent so that he can earn monies in the future and so repay creditors out of those earnings. The second relates to creditors harassing the insolvent and making undue demands. Neither seems to me to touch on the question whether an asset of this bankrupt, who cannot work again, in the form of a policy existing at the date of the bankruptcy order, is held for the benefit of creditors. 
11.	A further passage from the Cork Report relied on by Mr Doyle is in paragraph 195, where, after a reference to the insolvency procedures which had been developed over generations, it is said: 
“...but it appears to us equally that some of their original objectives and the principles which inspired them have been lost sight of or blurred and there has undoubtedly been in the last half century a failure to keep pace with the needs of our days”. 
12.	That is a criticism of the previous insolvency procedures. But that does not seem to me to be in point on this appeal. 
13.	The statutory provisions relevant to the issues on this appeal are as follows.
14.	Section 306 in Part IX of the Act provides for the bankrupt's estate to vest in the trustee “immediately on his appointment taking effect or, in the case of the Official Receiver, on his becoming trustee”. 
15.	“The bankrupt's estate” is defined in section 283: 
“(1) Subject as follows, a bankrupt's estate for the purposes of any of this Group of Parts comprises -
(a) all property belonging to or vested in the bankrupt at the commencement of the bankruptcy, and 
(b) any property which by virtue of any of the following provisions of this Part is comprised in that estate or is treated as falling within the preceding paragraphs.
(2) Subsection (1) does not apply to -
(a) such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation;
(b) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family.”
16.	Bankruptcy commences on the day on which the bankruptcy order is made (section 278). 
17.	The term “property” is given an expanded meaning in section 436: 
“`Property' includes money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent, arising out of, or incidental to, property.” 
18.	Section 307 deals with after-acquired property which the trustee may by notice in writing claim for the bankrupt's estate, that is to say any property which has been acquired by, or has devolved upon, the bankrupt since the commencement of the bankruptcy. But by section 307(5) excluded therefrom is any property which, as part of the bankrupt's income, may be the subject of an income payments order under section 310. 
19.	Section 310 relates to an income payments order which may be made by the court on the application of the trustee, claiming for the bankrupt's estate so much of the income of the bankrupt during the period for which the order is in force as may be specified in the order.
20.	I now turn to Mr Doyle's submission on the footing, as he now accepts, that the rights under each policy vested in the trustee on the commencement of the bankruptcy and that that gave rise to an indivisible claim against Abbey Life. 
21.	Mr Doyle submits that the payment of monies under the policies being conditional on Mr Rawlins' personal disability was therefore conditional on Mr Rawlins' personal pain and suffering, and that, he argues, takes those monies outside the bankrupt's estate. He suggested that the monies were intended as a replacement of income. But as he concedes that they do not come within section 310, even if he was right on this characterisation, which I doubt, I do not see how it helps him. Mr Doyle relies on what might be called the common law exception from the statutory definition of “property” within a bankrupt's estate. Despite the Insolvency Act 1986 and the wide definition of property, it has been recognised at least twice by this court that an exception exists. In Heath v Tang [1993] 1 WLR 1421, Hoffmann LJ, when giving the judgment of the court (which included Sir Thomas Bingham MR and Steyn LJ), referred to the extended meaning given to property in section 436, and said at page 1423: 
“Despite the breadth of this definition, there are certain causes of action personal to the bankrupt which do not vest in his trustee. These include cases in which `the damages are to be estimated by immediate reference to pain felt by the bankrupt in respect of his body, mind or character, and without immediate reference to his rights and property': see Beckham v Drake (1849) 2 H.L.Cas. 579, 604, per Erle J and Wilson v United Counties Bank Ltd [1920] A.C. 102. Actions for defamation and assault are obvious examples.” 
22.	The authorities were recently reviewed by this court in Ord v Upton [2000] Ch 352. In that case a bankrupt after the bankruptcy order issued a writ against a doctor who had treated him before the bankruptcy order, claiming damages for negligence, including damages for pain and suffering as well as damages for loss of earnings. Aldous LJ (with whom Kennedy and Mantell LJJ agreed) referred to some further remarks of Erle J in Beckham at pages 608-609 where the reason for the exception from the property of the bankrupt of certain items were said to be 
“...that the creditors cannot legitimately have looked to the pain of the bankrupt from a broken limb, or wounded affection, or blasted character, as a source of profit, they being in their nature casual and unforeseen, and unconnected immediately with property. There is a manifest distinction between damages from such sources as these last mentioned and damages in respect of contracts for labour...” 
23.	This court held that while the action in negligence was a single cause of action and a thing in action which was included in the bankrupt's estate, the trustee held on what would appear to be a remedial constructive trust for the bankrupt the right to recover damages for pain and suffering and other personal losses. 
24.	Mr Doyle does not pursue the argument advanced below that the monies payable under the policies relate to the bankrupt's pain and suffering or were calculated by reference to that pain and suffering. But he submits that where a policy provides that a sum is to be paid by the insurer in the event of the permanent disability of the insured, the circumstances giving rise to the payment are so inherently tied up with the pain and suffering of the insured or his person that it is wholly inequitable and contrary to the principles underpinning the Act that such monies should be appropriated by the trustee for the creditors. He prays in aid the approach of Rattee J in Haig v Aitken [2000] 3 WLR 1117, where it was held that personal correspondence of the bankrupt was of a nature peculiarly personal to the bankrupt and his life as a human being and as having a nature peculiarly private to the bankrupt. Mr Doyle further relied on the remarks of Warner J in Re Rae [1995] BCC 102 at page 112 where that judge referred to the retention of an asset (an entitlement to be considered for renewal of a fishing licence) as contrary to the purposes of the Act without that retention being explicable by reference to the bankrupt's needs as a human being. So, Mr Doyle says, the cause of action triggered by personal disability is of a nature peculiarly personal to the bankrupt, relating to the bankrupt's needs, as his disablement must be assumed to impact on his ability to provide for and maintain himself and his family. He asks this court to go beyond the contractual label of the chose in action and to consider the substance of the claim. He insists that the quantum of the policy monies has nothing to do with the question whether they fall within the common law exception. He says that the test is whether the contractual claim relies in any way on the pain and suffering of the bankrupt. If so, he says, the policy monies go to the bankrupt and not to his creditors.
25.	I am unable to accept Mr Doyle's submission for the following reasons:
(1)It is not founded directly on any authority. No case has been drawn to our attention where, on facts in any way comparable to those of the present case, an asset to which the bankrupt was contractually entitled was excepted from the bankrupt's estate.
(2)As Mr Steven Davies QC for the trustee rightly stressed, the policies were assets which were purchased by Mr Rawlins through the payment of premiums which otherwise would have formed part of his estate available for his creditors on his bankruptcy, just as they were available immediately before his bankruptcy commenced, to be disposed of by Mr Rawlins for value or to be seized by his creditors in execution. It would be surprising if the recognition by Abbey Life after the bankruptcy order of Mr Rawlins' claim to permanent disablement benefit arising from an accident prior to the bankruptcy made so material a change to the nature of the asset that it no longer was to form part of the bankrupt's estate. 
(3)In Beckham itself (a case including a contract of service which provided for the payment of a final sum, in the event of default, by the defaulting party), Erle J, being one of the judges giving their opinions for the benefit of the House of Lords, recognised the significance in this area of a contractual right to receive a sum of money. At page 605 he gave this example:
“Thus, in respect of promise, the assignees of a patient, if bankrupt, could not sue a surgeon for a breach of his promise to use due care in treating a wound, because the damages are assessed by reference to bodily annoyance; but the assignees of the same surgeon, if bankrupt, might sue the patient on his promise to pay remuneration for attendance, because the promise relates to property; and the assignees of a bankrupt could not sue on a breach of promise to marry, but the same assignees might, in my judgment, for the same reason, sue for a breach of promise to pay a given sum in case of refusing, on request, to complete a contract of marriage. 
At page 606 he said: 
“The substance of the promise, then, for the breach of which this action was brought, relates immediately to the property of the bankrupt, being for the payment of money”,
	and, at page 609:
“Upon the whole then, both because the promise for the breach of which this action was brought appears to me to fall within the class of those relating to property rather than of those relating to the person, and because the measure of damages appears to me not to have immediate reference to the personal inconvenience of the bankrupt, that is to say, not to any pain to him in respect of his body, mind, or character; and also, if the consideration for his promise is to be considered because it appears to me in its nature to belong rather to the class relating to property than to the person, I think that the defendant is entitled to the judgment.”
26.	To similar effect was Maule J at page 621. He said this: 
“There is no doubt that the right to bring an action for an injury to the person, character, or feelings, of a bankrupt, does not pass to the assignees, and that the right to bring an action for the payment of money agreed to be paid to the bankrupt does pass. And it appears to me that the present action is in effect an action on a contract to pay money.”
27.	And a little later at page 622: 
“Thus, although a right of action for not marrying or not curing, in breach of an agreement to marry or cure, would not generally pass to the assignees, I conceive that a right to a sum of money, whether ascertained or not, expressly agreed to be paid in the event of failing to marry or to cure, would pass. The agreement of the parties that money shall be paid as compensation makes, as it seems to me, the right to recover that money a part of the personal estate of the bankrupt, as much as a recovery, before the bankruptcy, of a judgment in an action for an injury to the person or character of the bankrupt, would do.”
28.	The House of Lords accepted the advice of those judges, and Lord Campbell, at page 645, referred with express approval to the passage from Maule J's opinion which I have just cited. 
(4)In any event the policy monies became payable not because of the satisfaction of a test of pain and suffering, but because of the contractual test of what my Lord, Keene LJ, rightly called “employability”. The policy monies do not relate to or represent or compensate for loss or damage to the bankrupt personally, nor are they measured by such loss or damage. Had the bankrupt's death been a condition on which the policy monies became payable, there is no question but that the monies would have been taken by the trustee. In the present case payment is merely triggered by the permanent disablement being proved, thereby advancing the date of payment of what otherwise would not have been payable until death occurred. 
(5)To my mind it would involve a considerable extension of the common law exception from the bankrupt's estate to include within that exception an asset whose only connection with the pain and suffering of the bankrupt is that his disablement is the contractual contingency on which the monies assured have become payable. If, for social reasons or otherwise, it is thought desirable that the exception should be extended, in my opinion it is for Parliament, not for the courts, to make that extension. 
29.	I have considerable sympathy with Mr Rawlins, who has suffered so disastrous an accident that he has not been able to work since. But the policy of the Act is to return to the unfortunate creditors who gave credit to the bankrupt as much of what they are owed as can be realised out of the bankrupt's estate, subject only to well recognised exceptions. I am satisfied that on the facts of this case the policy monies do not come within any such exception. I therefore would dismiss this appeal. 
30.	LORD JUSTICE CHADWICK: I agree. I add some words of my own because I recognise that the outcome of this case is of the greatest importance to Mr Rawlins. It is also, I think, of some general importance. 
31.	The appellant, Mr Alan Rawlins, carried on business on his own account, in partnership with his wife. In or about 1987 Mr Rawlins obtained a loan from Nationwide Building Society in order to fund the building of a bungalow on land which he owned. He was advised to provide for the repayment of that loan, in the event of his disability or illness, by an insurance policy. Acting on that advice, he took out a Living Assurance Policy with Abbey Life Assurance Company Limited. The policy (numbered 6222607A) commenced on 9th October 1987. It was a whole of life policy, providing a benefit on the death or disability of the life assured. The sum assured was £40,000. That sum was payable either on Mr Rawlins' death or if he should become disabled such that an entitlement arose under the terms of the policy to permanent disablement benefit or living assurance benefit. Entitlement to permanent disablement benefit arose if he became permanently disabled before his sixtieth birthday, through sickness or injury contracted after the policy had commenced, and was registered as disabled. A permanent disablement was defined as to mean such disability as would prevent him from carrying out any gainful occupation at any time during his lifetime, provided that the disability was not the result of any of the causes excluded by the policy. Entitlement to living assurance benefit arose on the contraction of a contingent disability after the commencement of the policy. Contingent disability was defined to mean the diagnosis of one or more than a number of medical conditions - of which heart attack, stroke and kidney failure may be given as examples. 
32.	After building work on the bungalow had commenced, Mr Rawlins realised that he would need further funding in order to complete it. He obtained a further loan of £30,000. He was advised to protect the repayment of that loan also, and he did so. He took out a further policy, described as a MortgageMaster, with Abbey Life. That policy (numbered 203863J) commenced on 12th November 1990. It provided endowment assurance at a maturity date; but it provided also for payment of benefit in the event of death or disability before that date. The sum assured was the £30,000 needed to repay the loan; and entitlement to permanent disability benefit or living assurance benefit arose under that policy in the same circumstances as under his 1987 Living Assurance policy. 
33.	On 18th January 1993 Mr Rawlins fell and injured himself when constructing an ornamental fish pond. He was unable to work thereafter. The partnership was dissolved and the assets of the business passed over to his son. The bungalow was sold to his son and daughter. The loans from Nationwide were discharged out of the proceeds of that sale. The policies were no longer required for their original purpose and were released from any claims by the Nationwide Building Society. Mr Rawlins, however, had made claims for permanent disablement benefit under the two policies; and, after some delay, those claims were accepted by Abbey Life on 16th September 1996. 
34.	In the meantime, however, Mr Rawlins had been adjudicated bankrupt. The bankruptcy order was made on 2nd April 1996. The respondent to this appeal, Mr Malcolm Cork, an insolvency practitioner, was appointed trustee in bankruptcy with effect from 4th March 1997. Mr Rawlins has by now been discharged from his bankruptcy under the automatic provisions; but that does not affect the position in the bankruptcy. 
35.	The trustee has claimed the monies payable under the two policies. Following the judge's decision, those monies have been paid to the trustee; they are held by him pending the outcome of this appeal. It is now accepted on behalf of Mr Rawlins that the contractual right to be paid under the two policies did vest in the trustee in bankruptcy under the provisions of section 306 of the Insolvency Act 1986; but it is said that the trustee holds that right on trust, not for the creditors, but for Mr Rawlins personally. It is submitted that the position is analogous to that which was held by this court to exist in Board v Upton [2000] Ch 352. It was held, in that case, that a cause of action in negligence for personal injuries - in which claims were made both for loss of earnings (as special damages) and for pain and suffering (as general damages) - vested in the trustee; but on terms that he would hold only those damages awarded in respect of the loss of past and future earnings as part of the bankrupt's estate distributable amongst creditors. He was to hold damages awarded for pain and suffering as a constructive trustee for the bankrupt. 
36.	For my part, I find no assistance in the suggested analogy between a tortious claim for damages for pain and suffering and the contractual claim for monies payable under policies of insurance. 
37.	It is, perhaps, pertinent to keep in mind that if Mr Rawlins had had a claim for damages for pain and suffering against a third party in respect of the accident which caused his injury - which on the facts of this case is not suggested - he would not have been required to bring the monies payable under the policies into account when pursuing that claim: see Bradburn v Great Western Railway Company [1874] LR 10 Exch 1. The reason was explained by the House of Lords in Parry v Cleaver [1970] AC 1: see in particular the speech of Lord Morris of Borth-y-Gest, at page 31 between D and E: 
“If someone makes a purely voluntary and personal decision to insure himself against accidents he is choosing to use some of his money or some of his savings in a particular way just as he would be doing if he had saved some of his money and invested it. If he insures against accidents he will hope that no accident will befall him and he will be well content to have no return from the expenditure which is involved in the payment of premiums. He may be one in whose case there is already some provision against sustaining economic loss. He may feel that in the event of accident befalling him he would welcome the receipt of a sum of money to compensate him in ways that would not be possible as a result of a successful claim at law. He may contemplate situations in which no claim against anyone would be possible or would succeed.” 
38.	Although Lord Morris of Borth-y-Gest was in the minority in relation to the result in Parry v Cleaver, that passage fairly reflects the views of all the members of the Lords.
39.	The position which Lord Morris of Borth-y-Gest describes reflects what has happened in this case. Mr Rawlins has provided, by insurance, for the receipt of a sum of money in the event of an accident in circumstances in which, as it has turned out, he has no claim against anyone else. That was undoubtedly a prudent provision for him to make. The provision was made at a time when he could foresee that, if he became unable to work through disability, he would be unable to make the payments to the building society out of his earnings in respect of the moneys which he had borrowed.
40.	Mr Rawlins purchased a right to payment from the insurance company, Abbey Life, so that he could discharge his liability to the building society, Nationwide, if and when the circumstances arose in which monies became payable under the policy. He purchased that right out of his own resources; resources which he might otherwise have used to make repayments under the loan, or to invest in a savings account, or in Stock Exchange securities, or in an endowment policy. Indeed, in the case of the MortgageMaster policy his purchase of the right to payment in the event of permanent disablement was one element in an endowment contract under which he purchased a right to payment on a maturity date for the purpose of discharging the loan. 
41.	The policy monies are not now required to repay the building society loan. That loan has been repaid out of other assets. But the policy monies are required for the payment of Mr Rawlins' creditors generally. If they had been received or had become payable before the bankruptcy order was made, there is no doubt that they could - and probably would - have been used for that purpose. The creditors could have taken steps to ensure that they were; by obtaining a garnishee order or a charging order over the right to receive the monies from the building society. There is no reason in principle why the position should be any different once the bankruptcy order has been made. The right to payment was purchased so as to provide for the discharge of Mr Rawlins' indebtedness to a particular creditor; and, that creditor having been paid out of other monies which would otherwise have come into the bankrupt's estate, there is no hardship in requiring that the right to payment falls into the estate for the benefit of creditors generally.
42.	It is plainly in the general public interest that persons should be encouraged to make provision against the possibility that they will be unable to meet their commitments as a result of misfortune for which they are not responsible. But if public policy requires that they should be encouraged to do so by permitting them to shelter that provision from the claims of their creditors, then it is for Parliament to say so. It is not, in my view, for the courts to distort the bankruptcy code in order to achieve that result. 
43.	For those reasons, I also would dismiss this appeal. 
44.	LORD JUSTICE KEENE: I agree with both judgments which have been delivered. I too would dismiss this appeal. 

Order: Appeal dismissed with costs assessed at £12,172.06. Leave to appeal to the House of Lords refused.
(ORDER DOES NOT FORM PART OF APPROVED JUDGMENT)