Section 422

Where a partner in a firm is adjudged bankrupt, the Court may authorise the Official Assignee to commence and prosecute any action or other legal proceeding in the names of the Official Assignee and of the bankrupt’s partner.

Any release by the bankrupt’s partner of the debt or demand to which the action or proceeding relates is void.

Notice of the application for authority to commence the action or proceeding must be given to the bankrupt’s partner and the partner may show cause against it, and on the partner’s application the Court may, if the Court thinks fit, direct that the partner is to receive the partner’s proper share of the proceeds of the action or proceeding, and if the partner does not claim any benefit from the proceeds of the action or proceeding, the partner is to be indemnified against costs in respect of the action or proceeding as the Court directs.