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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Insolvency - From: 1992 To: 1992

This page lists 27 cases, and was prepared on 08 August 2015.

 
In re Atlantic Computer Systems Plc [1992] Ch 505
1992
CA
Nicholls LJ
Insolvency
The chargor was a company which arranged with the chargee, a funding bank, that it should purchase equipment and let it on hire purchase to the chargor with permission to sub-lease to end users. The chargor charged to the chargee by way of security all the benefit of the terms of each of the specific sub-leases involved and, in particular, the rentals due under them. The chargor later went into administration and the issue arose as to whether the charges were fixed or floating charges. The court was also asked whether rental due under hire purchaser agreements should be treated as an expense of administration. Held: To be treated as liquidation expenses under the rules, an expense had to meet the "liquidation expenses" principle of fairness. If a liability was incurred as a result of a step taken for the benefit of the insolvent estate, it was fair that the burden should be borne by the persons for whose benefit the estate was being administered. A creditor could ordinarily be given leave to execute against the company's assets for a "new debt incurred by the liquidator for the purposes of the liquidation" "it is just and equitable that the burden of the debt should be borne by those for whose benefit the insolvent estate is being administered." It was a corollary of this principle that a debt was incurred for the purposes of the liquidation ought to be paid in full as an expense of the liquidation. "The latter principle is not confined to new debts incurred by the liquidator. It applies also to continuing obligations under existing contracts such as leases which the liquidator chooses to continue for the benefit of the winding up." As to the question of whether a fixed charge had been created: "in practice sums payable by the end users under these sub-leases were paid to the company and utilised by it in the ordinary course of business. In so far as this is relevant, it may well be that this was what the parties intended should happen. The company was to be at liberty to receive and use the instalments until AIB chose to intervene. We are unpersuaded that this results in these charges, on existing and defined property, becoming floating charges. A mortgage of land does not become a floating charge by reason of the mortgagor being permitted to remain in possession and enjoy the fruits of the property charged for the time being."
1 Cites

1 Citers


 
Regina -v- Theivendran (1992) 13 Cr App R (S) 601
1992
CACD

Criminal Sentencing, Insolvency
For eight offences of being concerned with the management of a company whilst an undischarged bankrupt, a sentence of nine months' imprisonment was reduced to six months. There had been a breach of the order but there had been no dishonesty, and indeed any deficiency had been paid off after winding up, and there had been no previous offences of a similar kind, a possible aggravating feature. A submission that a sentence of imprisonment would be wrong in principle, where there was a plain flouting of the order but no dishonesty, was rejected. If the contravention had been flagrant, that is to say deliberate or reckless, a custodial sentence would in principle be appropriate.
1 Citers


 
Chohan -v- Saggar [1992] BCC 306
1992
ChD
Mr Evans-Lombe QC
Insolvency
Section 423(3) of the 1986 Act requires a plaintiff to show a dominant purpose to remove assets from the reach of actual or potential claimants or creditors, but not excluding the possibility that there might be other purposes behind the relevant transfer.
Insolvency Act 1986 423(3)
1 Citers


 
Re Sperrin Textiles Ltd [1992] NI 323
1992


Insolvency

1 Cites

1 Citers


 
Xyllyx PLC (No1) [1992] BCLC 376
1992
ChD
Harman J
Company, Insolvency
Two of the company's contributories asked be added to the list for the purpose of obtaining a 7 day adjournment of the hearing of the petition so as to give them time to consider whether they wished to ask for substitution. Held: An ordinary individual or company cannot be substituted as petitioner on a Secretary of State’s petition under the section.
Insolvency Act 1986 124A
1 Citers


 
In re British & Commonwealth plc (No 3) [1992] 672
1992
ChD
Vinelott J
Company, Insolvency
Bonds were subordinated in a winding up, and the company was in administration in which the administrators were proposing a scheme of arrangement. The judge was invited to apply the Tea Corporation principles in order to arrive at a conclusion that the bondholders would recover nothing and so would not have the right ot vote at a meeting to consider the relevant scheme. He drew attention to the fact that in the Tea Corporation case there was a finding that the assets would not suffice to meet the claims of shareholders and that there was a concession to that effect in Oceanic. He went on to say: "In the instant case the trustee does not concede that the proceeds of realisation of the company's assets, whether in the course of administration or in the course of winding up, would inevitably be insufficient to meet the claims of scheme creditors . . .The evidence relied on by the trustee is also criticised on what appears to me to be cogent grounds in evidence filed on behalf of he administrators. The claim that there is even a remote possibility that sufficient might be realised in the course of administration or in winding up to meet the claims of the scheme creditors in full seems to me to verge on the fanciful. However, in the absence of any concession, I cannot on this application proceed on the assumption that there is no possibility that the claims of the scheme creditors will be met in full." However, despite his unwillingness to proceed on that assumption, the learned judge still came to the conclusion that the bondholders' consent was not required, and at court concluded that the bondholders had no interest in the assets of the company: "It follows to the extent that the assets of the company are insufficient to meet the claims of scheme creditors, the holders of CULS have no interest in the assets of the company."
1 Cites

1 Citers


 
Re Dallhold Estates (UK) Pty Ltd [1992] BCLC 621
1992
ChD
Chadwick J
Insolvency
The court discussed the the receipt and acceptance of a letter of request: "The scheme of subsection (5) appears to me to be this. The first step is to identify the matters specified in the request. Secondly, the domestic court should ask itself what would be the relevant insolvency law applicable by the domestic court to comparable matters falling within its jurisdiction. Thirdly, it should then apply that insolvency law to the matters specified in the request, notwithstanding that on this hypothesis, those are matters which would not, or might not, otherwise fall within its jurisdiction by reason of some foreign element."
Insolvency Act 1986 426(5)
1 Citers


 
In Re Hartlebury Printers Ltd [1992] ICR 559; [1993] BCLC 902
1992

Morritt J
Insolvency, Employment, European
Insolvency, at least per se, does not amount to a special circumstance exempting an employer from consulting employees on redundancy. Morritt J noted the distinction in the Directive between contemplated and projected redundancies and section 99 to an employer "proposing to dismiss" and said: "The Union contends that both those sections should be construed to give effect to the Directive so that the duty under section 99 arises when an employer has redundancies in contemplation. That it is the duty of the Court, if possible, to construe United Kingdom legislation so as to comply with the United Kingdom's obligations under an EEC Directive is not in doubt. But that must be achieved, if at all, by proper processes of construction, not so far as the Court is concerned by the equivalent of legislation.
Dealing first with the Directive, it seems to me that the word "projected" in Article 3 is used in the sense of "then intended" after the processes of consultation with the Union had been completed." . . Thus the contemplation referred to in Article 2(1) is something less than intention. Nevertheless, the range of mental states included within the word is wide. It would extend from merely "thinking about" to "having in view or expecting". In the latter sense, but not the former, the word would equate with the verb to propose . . Approaching that problem from the wording of section 99 I think it is clear, not least from subsection (5) that the phrase "an employer proposing to dismiss as redundant" cannot include one who is merely thinking about the possibilities of redundancies. Thus I cannot construe the word "proposing" to embrace the full range of the possible meaning of the word "contemplating" but I can construe "contemplating" in a sense equivalent to "proposing". Article 2 (1) of the Directive has not, so far as I know, been construed by the European Court of Justice. Thus I assume, because it is for the Court of Justice and not for me to decide, that section 99 does comply with the United Kingdom's obligations."
Employment Protection Act 1975 99
1 Citers


 
In re a Debtor (No 784 of 1991) [1992] Ch 544
1992

Hoffmann J
Insolvency
The court considered how earlier cases were to be considered given that the 1986 Act was intended to be a complete and self contained code: "Those authorities show that, in approaching the language of the 1986 Act, one must pay particular attention to the purposes and policies of its own provisions and be wary of simply carrying over uncritically meanings which had been given to similar words in the earlier Act. It does not, however, mean that the language of the new Act comes to one entirely free of any of the intellectual freight which was carried by words and phrases in earlier bankruptcy or other legislation. Decisions of the court upon the meanings of phrases used in Acts of Parliament may come, in the course of time, to give them the quality of terms of art which Parliament may well be assumed to have intended them to bring with them when used in subsequent legislation. In section 265, for example, terms such as 'domiciled', 'personally present', 'ordinarily resident', have had attributed to them, both in the context of bankruptcy and in that of civil procedure generally, a wealth of refined construction which it is difficult to suppose Parliament did not intend equally to apply when those words were used in the 1986 Act. Is there any reason why that should not apply equally to the words 'has carried on business'? There does not seem to me to be anything in the policy of the new Act which suggests that in this provision Parliament was intending to give those words a different meaning from those which they had been held to bear under the 1914 Act."
Insolvency Act 1986
1 Citers


 
Re Case of Taff Wells Ltd [1992] BCLC 11
1992

HH Judge Baker QC
Limitation, Insolvency
The court considered whether the liquidation of a company stopped time running for insolvency purposes: "One may conclude that the effect of an order to wind up is to convert the contractual rights of the creditors into proprietary rights under a trust. It may still be necessary and appropriate for a creditor to bring an action after the liquidation for the purpose of elucidating his original contractual rights, for which purpose he would have to get leave; but it is not necessary for the purpose of stopping time running against him in relation to his erstwhile contractual rights."
1 Citers


 
Lloyds & Scottish Finance Ltd -v- Cyril Lord Carpet Sales Limited [1992] BCLC 609
1992
HL
Lord Wilberforce, Lord Scarman
Contract, Banking, Company, Insolvency
Lord Wilberforce considering whether certain assignment of book debts were in substance absolute assignments by way of sale or assignments by way of charge and would be void against a liquidator for non-registration under the Companies Act. He said: "My Lords, the fact that the transaction consisted essentially in the provision of finance and the similarity in result between a loan and a sale, to all of which I have drawn attention, gives to the appellants' arguments an undoubted force. It is only possible, in fact, to decide whether they are correct by paying close regard to what the precise contractual arrangements between them and the respondents were." and "it has to be appreciated that block discounting is essentially a method of providing finance. Commercially and in its economic result, it may not differ from lending money at interest: the ‘discounting charge’, which represents the finance house’s profit, is stated in term of so much per cent per annum, which percentage is no doubt based upon current interest rates. Legally, however, there is no doubt that discounting is not treated as the lending of money and that the asset discounted is not considered as the subject of a charge."
1 Citers



 
 In re a Company (No 0012209 of 1991); ChD 1992 - [1992] 2 All ER 797; [1992] 1 WLR 351; [1992] BCLC 865

 
 In re Seagull Manufacturing Co Ltd; ChD 1992 - [1992] Ch 128
 
Re Probe Data Systems Ltd (No.3) [1992] BCC 110
1992
CA

Company, Insolvency
An appeal from a director disqualification is to be under the Insolvency Rules.
Company Directors Disqualification Act 1986 6
1 Citers


 
In re Jeffrey S Levitt Ltd [1992] Ch 457
1992
ChD
Vinelott J
Company, Insolvency
The provisions of the two Acts are intended to be part of the same statutory scheme and are to be read in combination.
Company Directors' Disqualification Act 1986 - Insolvency Act 1986
1 Citers


 
Re Movietex Ltd Gazette, 26 February 1992
26 Feb 1992
CA

Insolvency
After a failed claim against the directors by the Liquidator, later claimants were to be allowed to see the papers.

 
Practice Note 13 December 1991 Gazette, 25 March 1992
25 Mar 1992
ChD

Insolvency
Cases where individual voluntary arrangement will be approved without attendance.

 
Orders Without Attendance (No 2/92) Gazette, 08 April 1992
8 Apr 1992
ChD

Insolvency
Procedures for inter parties orders available in bankruptcy without attendance.

 
Re Workvale Ltd (In Liquidation) Gazette, 08 April 1992; [1992] 1 WLR 416
8 Apr 1992
CA

Insolvency, Limitation, Personal Injury
A limited company was correctly restored to the register from dissolution so that its insurers could face an arguable claim. Where a first writ issued within the primary limitation period was ineffective (although not a nullity) through having been issued against a company which had been struck off the register, the Walkley principle does not defeat a second action in limine, despite the defect being curable, by having the company restored to the register.
Limitation Act 1980
1 Cites

1 Citers


 
Re Paramount Airways Ltd (In Administration) Gazette, 08 April 1992; [1993] Ch 223
8 Apr 1992
CA

Insolvency
There is no strict limitation on recovery proceedings against foreign residents. The provisions of the Insolvency Act 1986 for setting aside transactions at an undervalue had, as a matter of construction, world-wide application but the court had a discretion to refuse to make an order in a case not sufficiently connected with England.
Insolvency Act 1986 238-2
1 Citers



 
 Bishopsgate Investment Management Ltd (In Provisional Liquidation) -v- Maxwell and Another; CA 13-May-1992 - Gazette, 13 May 1992; [1993] Ch 1; [1992] BCLC 475
 
Bankruptcy Orders Without Attendance No 2/92 Gazette, 27 May 1992
27 May 1992
ChD

Insolvency
Further provisions for making orders without attendance, set aside demands etc.


 
 Regina -v- Kansal; CACD 24-Jun-1992 - Gazette, 24 June 1992; Gazette, 15 July 1992; [1992] 3 All ER 844 CA
 
Re Arrows Ltd (In Liquidation) Times, 01 May 1992; Gazette, 01 July 1992
1 Jul 1992
Chd

Insolvency, Company
Liquidators seeking information from directors were allowed to undertake not to disclose any information gathered to the Serious Fraud Office. Such an undertaking having been given a former company director was not able to refuse to answer questions put to him.
Insolvency Act 1986 236(2)
1 Citers


 
Re Dennis Gazette, 15 July 1992; [1993] Ch 72
15 Jul 1992
ChD
Browne-Wilkinson J
Insolvency
Property was held in joint names. The husband failed to comply with a statutory demand, and so committed an act of bankruptcy. The wife later died, and the husband was then made bankrupt a month later. Held: An act of bankruptcy did not operate as an involuntary act to sever the joint tenancy and the bankrupt inherited the jointly held property. On his bankruptcy the entire property was then vested in the trustee and was available to the creditors. "the effect of section 38(a) is not to vest title in the trustee retrospectively in the sense that under the Act he is deemed to have had title at the commencement of the bankruptcy: the effect of Section 38(a) is to vest in the trustee, when adjudication occurs, title to property which is identified by reference to the property which belonged to the bankrupt at the commencement of the bankruptcy. The consequence of this may be, and in some cases will be, to divest a third party of title to property which since the commencement of the bankruptcy he has acquired from the bankrupt. That divesting occurs when the adjudication order is made, not before."
Bankruptcy Act 1914 18 37 38A
1 Cites

1 Citers



 
 In Re International Bulk Commodities Ltd; ChD 26-Aug-1992 - Gazette, 26 August 1992; [1993] 3 CL 247
 
In Re Busytoday Ltd Gazette, 02 September 1992
2 Sep 1992
ChD

Insolvency
The court set out three occasions where Insolvency rules may take precedence over RSC.

 
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