When being asked to set aside a statutory demand, and exercising the statutory discretion, the real question is whether the applicant can show ‘a substantial reason comparable to the sort of reason one sees in paras (a), (b) and (c) of r 6.5(4), why the demand ought to be set aside.’Peter Gibson LJ said: ‘The … Continue reading Budge v AH Budge (Contractors) Ltd: CA 1997
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Proudman J [2016] EWHC 1536 (Ch) Bailii Insolvency Act 1986 284 England and Wales Insolvency Updated: 18 January 2022; Ref: scu.566241
The claimant was trustee in bankruptcy but the court failed to register the bankruptcy petition at the Land Registry as a pending action. The bankrupt was therefore able to sell her land, and the trustee did not recover the proceeds. The trustee sought to recover from the defendant who was responsible for the court service. … Continue reading Poulton v Ministry of Justice: CA 22 Apr 2010
The trustee sought to have set aside as an unlawful preference, the payment of 75% of the proceeds of sale of the former matrimonial home to the bankrupt’s wife, saying that the payment had been made after the presentation of the petition. The parties had previously compromised a claim for ancillary relief in the divorce … Continue reading Warwick (Formerly Yarwood) v Trustee In Bankruptcy of Clive Graham Yarwood: ChD 13 Sep 2010
The parties contracted for the sale and purchase of land with vacant possession. It was subject to a lease which the seller said had been surrendered, and it refused to accept any requisitions of objections. After exchange it appeared that the . .
Administrators took on new employees during the period of administration, but when it came to an end, they were unable to pay the PAYE and NIC for the employees. Held: The statute gave special priority to debts incurred under new contracts. The liability for PAYE fell under that category, and so did liability for NIC, … Continue reading In Re FJL Realisations Ltd: CA 2 Aug 2000
First Division, Inner House, Court of Session – allegation of sale at an undervalue. The liquidator appealed a finding that as a speedy sale was required the sale price was proper. Held: The reclaiming notice was allowed. The sale of the company’s main place of business would not lead to a recovery. A person, once … Continue reading Liquidators of Grampian Maclennan’s Distribution Services Ltd Reclaiming Motion By, v Carnbroe Estates Ltd: SCS 23 Jan 2018
‘This appeal concerns the Scots law of gratuitous alienations on insolvency. It raises three principal questions. First, there is a question as to the interpretation of the term ‘adequate consideration’ in section 242(4)(b) of the Insolvency Act 1986. Secondly, there is the question whether the Inner House was entitled to interfere with the Lord Ordinary’s … Continue reading MacDonald and Another v Carnbroe Estates Ltd: SC 4 Dec 2019
(Outer House) Allegation of sale at an undervalue – Carnbroe had established that the sale of the Property was made for adequate consideration. Lord Woolman recorded the submission which counsel made on behalf of Carnbroe that Grampian was fighting for its survival and that Mr Quinn had to make a quick decision. He continued: ‘While … Continue reading Macdonald and Others v Carnbroe Estates Ltd: SCS 18 Jan 2017
Lord Cullen spoke of the meaning of ‘adequate consideration’ in section 242 of the 1986 Act: ‘In considering whether alienation was made for ‘adequate consideration’, I do not take the view that it is necessary for the defender to establish that the consideration for the alienation was the best which could have been obtained in … Continue reading Lafferty Construction Ltd v McCombe: SCS 1994
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 … Continue reading Re Dallhold Estates (UK) Pty Ltd: ChD 1992
The Official Receiver could not use the powers given to him for the purposes of his insolvency duties to require production of documents form solicitors and accountants, to satisfy duties placed on him by the Secretary of State for the purpose of company director disqualification proceedings. The secretary of state could not ask the Official … Continue reading In re Pantmaenog Timber Co Ltd: CA 25 Jul 2001
Claims under section 212(3) for alleged misfeasance or breach of duties against the Companies’ former liquidators in their respective members voluntary liquidations Judges: Insolvency and Companies Court Judge Burton Citations: [2022] EWHC 632 (Ch) Links: Bailii Statutes: Insolvency Act 1986 212(4) Jurisdiction: England and Wales Insolvency Updated: 12 April 2022; Ref: scu.674645
The forfeiture of a bankrupt’s lease is not an exercise of a security disallowing landlord from proving in the bankruptcy. the right of physical re-entry is neither a ‘security’ nor a ‘remedy’ within the meaning of those provisions, nor does it constitute ‘other proceedings’ or the execution of ‘other legal process’. The present law is … Continue reading Razzaq v Pala: QBD 6 Jun 1997
Deliberate concealment of arrangements for sale of assets at an undervalue to associate justified revocation of a voluntary arrangement, but the court must look at the heinousness of the irregularity before deciding as to future conduct of arrangements. Citations: Times 29-Dec-1998 Statutes: Insolvency Act 1986 262(4)(b) Insolvency Updated: 08 April 2022; Ref: scu.82341
Administrators took on new employees during the period of administration, but when it came to an end, they were unable to pay the PAYE and NIC for the employees. Held: The statute gave special priority to debts incurred under new contracts. The liability for PAYE fell under that category, and so did liability for NIC, … Continue reading In Re FJL Realisations Ltd: ChD 2 Mar 2000
The giving false or misleading information to creditors at the meeting is ‘a Material Irregularity’ sufficient to have the result of the meeting set aside. Citations: Times 07-Aug-1995, Ind Summary 21-Aug-1995, Ind Summary 11-Sep-1995 Statutes: Insolvency Act 1986 262(4) 257 Insolvency Updated: 08 April 2022; Ref: scu.81668
The debtor had agreed to buy a company from the petitioner, the price to be payable in instalments by means of post-dated cheques. The debtor alleged misrepresentation and stopped one of the cheques. The petitioner served a statutory demand based on the dishonoured cheque. The district judge dismissed the debtor’s application to set aside the … Continue reading Hofer v Strawson: ChD 31 Mar 1999
ICC Judge Barber [2021] EWHC 2965 (Ch) Bailii Insolvency Act 1986 205(4) England and Wales Insolvency Updated: 04 December 2021; Ref: scu.669818
The agency challenged the inclusion in an individual voluntary arrangement of the father’s arrears of child support. The creditors meeting had approved a full and final settlement. 94% of the debts were arrears of child support. The Commission said that such arrears were not subject to the arrangement, and the arrangement was unfair to it. … Continue reading Child Maintenance and Enforcement Commission v Beesley and Another: ChD 11 Mar 2010
The landlord had taken a guarantee of the lease from the tenant when granting a licence to assign to the new tenant. That new tenant had become insolvent and the liquidator had disclaimed the lease. The court considered the position under Hindcastle after the 1995 Act. Held: The guaranteer’s appeal succeeded. The effect of the … Continue reading Shaw v Doleman: CA 1 Apr 2009
A statutory demand as served showed an incorrectly calculated sum owed and was in the wrong form.
Held: The application to set the demand aside was refused. A statutory demand should not be set aside for a mere technicality.
Lord Justice . .
Transfer of Undertakings
The appeal is one in which no party other than the Appellant was represented. That representative, although experienced in the employment law field, is not a qualified lawyer. No authority was cited to the EAT, and the . .
The claimant sought judicial review of the respondent’s decision that he was liable, after his discharge from bankruptcy, to suffer deductions from his benefits of sums to repay an overpayment of benefit incurred before his bankruptcy.
Held: . .
The test for the exercise of the discretion to set aside a statutory demand is whether there are circumstances which would make it unjust for the statutory demand to give rise to insolvency consequences in the particular case. . .
The court examined the effect of section 423 on sale and leaseback transactions. . .
The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
Held: The answer was a mixture of fact and law. A breach of . .
Solicitor firms had been made bankrupt leaving a shortfall after thefts from client accounts of over 12 million pounds. The thief had diappeared, and the other partners were now discharged form bankruptcy. The Law Society accepted that it could not . .
The claimants appealed against bankruptcy orders made against assessed liability to income tax and penalties. As solicitors, their practice had suffered intervention, but they argued that their assets comfortably exceeded their liabilities and that . .
The subject of the bankruptcy proceedings asked that the petition be heard in private so as not to prejudice pending criminal proceedings in a foreign jurisdiction.
Held: The bankrupt would be required to answer questions which might be self . .
On the divorce, the husband was ordered to transfer his share in the house to the wife. On his bankruptcy shortly after, the order was confirmed. After the wife sold the property at a profit, the trustee in bankruptcy applied to set the transfer . .
The claimant appealed refusal to set aside a statutory demand served by the defendant. The parties had become embroiled in criminal proceedings and the defendant sought recovery of assets from the claimant. In those proceedings a costs order had . .
The Commissioners appealed against a refusal of their application for a revocation of the defendant’s voluntary arrangement in that it had failed to comply with section 4. They complained that the arrangement was unfair to them. It had been agreed . .
The expression ‘cross-demand’ in rule 6.5(4)(a) did not imply any kind of procedural or juridical relationship to the debt subject to the statutory demand. All it meant was that the demand was one that went the other way, i.e. was a demand by the . .
When a defendant was accused of an offence under the section, and wished to raise a defence under sub-section 4, the duty of proof placed on him by the sub-section amounted to a duty to bring sufficient evidence to raise the defence, and the section . .
The company sold its business to the respondent for one pound, but the respondent agreed to sublease computer equipment for an amount equivalent to the value of the company. The company defaulted, and the computer equipment was recovered. The . .
A modification to an Individual Voluntary Arrangement made under a clause of the arrangement allowing variations and which variations could have been included in the original deed was valid. . .
The length of a director’s disqualification is not to be discounted for the time elapsed up to the hearing of the case. As to section 221 of the Companies Act, it : ‘has, at the least, two purposes. First, to ensure that those who are concerned in . .
The degree to which an appellate court will be willing to substitute its own judgment for that of the tribunal will vary with the nature of the question. Hoffmann LJ said: ‘The concept of limited liability and the sophistication of our corporate law . .
