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 Nicholls said: ‘The question arising on this appeal concerns the exercise by the court of … Continue reading In re a Debtor (No 1 of 1987), ex parte the Royal Bank of Scotland: CA 1989
Landlord bound by voluntary arrangement on future rent despite disagreement. A meeting chairman has power to impose ‘agreed’ value on claim to allow vote to creditor. Citations: Ind Summary 18-Dec-1995, Gazette 17-Jan-1996, Times 07-Dec-1995 Statutes: Insolvency Rules 1986 5 17(3) Jurisdiction: England and Wales Insolvency, Landlord and Tenant Updated: 09 December 2022; Ref: scu.80097
In appointing the administrators, the wrong form had been used. The court was asked to use its powers to cure the mistake. The failure to file the correct form was overlooked, with the result that one of the prerequisites of an appointment taking effect under paragraph 31 remained unsatisfied. However, the administration was carried on … Continue reading In re G-Tech Construction Limited: ChD 29 Sep 2005
The Revenue sought the defendant’s liquidation, challenging the sum fixed to be due by the chairman of the meeting and the football rules which gave preference to football debts over those of others. The dispute was as to treament of receipts for players’ image and associated rights. They were paid into discretionary trust funds, and … Continue reading HMRC v Portsmouth City Football Club Ltd and Others: ChD 5 Aug 2010
The bankrupt wished to discharge his bankruptcy debt, but challenged the trustee’s fees. Held: The court approved application of the Practice Statement 2004.Proudman J said: ‘The court’s task is to balance all the various criteria, resolving any conflict between them arising in the particular case, in order to arrive at the proper level of remuneration. … Continue reading Hunt v Yearwood-Grazette: ChD 7 Apr 2009
The appellant challenged a formal statutory demand which had led to his bankruptcy. The demand had included the anticipated cost of realising the charged property, and also had been inflated to allow for extra costs of dealing the appellant who was perceived to be recalcitrant and unco-operative. Held: The statutory demand could only include sums … Continue reading Owo-Samson v Barclays Bank Plc, Boyden: CA 21 May 2003
Although an order for costs might in some circumstances not be provable in an insolvency, that did not prevent a statutory demand based upon that debt. Whether it was provable would become clear in the later insolvency proceedings. The court had a discretion to found a petition on an unproveable debt where there were special … Continue reading Levy v Legal Aid Board: ChD 24 Feb 2000
Whether the appellants appeared to have a counterclaim against AIB which equals or exceeds the amount of the debt specified in the statutory demands. That is a ground on which a court may grant an application to set aside a statutory demand: rule 6.5(4)(a) Insolvency Rules 1986. Citations: [1998] 2 All ER 929, [1998] EWCA … Continue reading AIB Finance Limited v Alsop and Another: CA 3 Mar 1998
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. Judges: HHJ Weeks QC Citations: [2008] 1 BCLC 314, [2005] EWHC 3519 Statutes: Insolvency Rules 1986 6.5(4)(a) … Continue reading Chan v Appasamy: 2008
A judge’s refusal to allow the inspection of insolvency records is unappealable. Citations: Gazette 20-Nov-1996, Times 11-Nov-1996, [1996] EWCA Civ 844, [2000] BPIR 223, [1997] 1 WLR 616, [1997] BCC 362, [1997] 1 BCLC 233 Links: Bailii Statutes: Insolvency Rules 1986 (1986 No 1925) 7.28 Jurisdiction: England and Wales Insolvency Updated: 01 November 2022; Ref: … Continue reading In the Matter of Austintel Limited: CA 31 Oct 1996
A stay of execution of an order against matrimonial assets was not defeated by bankruptcy. As to the interplay of the Insolvency Rules and matrimonial proceedings. Balcombe LJ said: ‘I cannot leave this case without saying something about the effect of r 12.3 of the Insolvency Rules 1986. Before those rules came into force orders … Continue reading Woodley v Woodley (2): CA 12 Apr 1993
(Leeds County Court) The creditor sought to have a proof admitted for pounds 479k, but the chair admitted it only for pounds 1.00, and the IVA proposal was accepted again the wishes of the creditor. The creditor said that the IP had misunderstood the claim and should have treated it as liquidated. The chair responded … Continue reading AB Agri Ltd v Curtis and Others: Misc 22 Jul 2016
Judges: Hodge QC J Citations: [2010] EWHC 3751 (Ch) Links: Bailii Statutes: Insolvency Rules 1986 7.55 Jurisdiction: England and Wales Insolvency Updated: 04 October 2022; Ref: scu.434925
‘These appeals raise important and difficult questions posed by the impact of legislation for the protection of pension funds upon companies which are undergoing an insolvency process.’ Judges: Laws, Lloyd, Rimer LJJ Citations: [2011] EWCA Civ 1124, [2012] BCC 83, [2012] 1 BCLC 248, [2012] BCLC 248, [2012] 1 All ER 1455, [2012] Bus LR … Continue reading Bloom and Others v The Pensions Regulator and Others; In re Nortel GMBH (in administration: CA 14 Oct 2011
This appeal concerned two issues of principle relating to the approval of an individual voluntary arrangement. One was as to whether, where there has been an assignment of part of a debt, which can only take effect in equity, the person entitled to vote at the creditors’ meeting called to approve the IVA was the … Continue reading Kapoor v National Westminster Bank Plc and Another: CA 5 Oct 2011
Citations: [2006] EWHC 1954 (Ch) Links: Bailii Statutes: Solicitors Act 1974, Insolvency Rules 1986 6.5 Jurisdiction: England and Wales Legal Professions, Insolvency Updated: 11 September 2022; Ref: scu.243987
The petitioner former wife sought to make the husband bankrupt on the basis of unpaid maintenance debts. The maintenance was subject to variation by the original foreign court which had made the order. Held: The order was one recognised under the Act. The fact that the foreign court could still order a variation was critical … Continue reading Cartwright v Cartwright and Others: CA 3 Jul 2002
Insolvency petitions are not to be provided en masse for resale to the public. Citations: Times 22-May-1996 Statutes: Insolvency Rules 1986 7.28 Jurisdiction: England and Wales Insolvency Updated: 16 August 2022; Ref: scu.80401
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 incriminating. The court had power to hear the matter in private, and would do so, but … Continue reading In re Rottmann (a Bankrupt): ChD 20 May 2008
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency. Held: Liabilities which arose from financial support directions or contribution notices issued by the Pensions Regulator under the 2004 Act after the company had gone into administration, which required the company to … Continue reading In re Nortel Companies and Others: SC 24 Jul 2013
Applications for directions by the administrators of twenty companies in two groups, all raising the same common questions as to the effect of the Financial Support Direction regime created by the Pensions Act 2004 upon companies in administration or insolvent liquidation.Briggs J said that Lord Hoffmann’s speech in Toshoku established as ‘a general rule’ that: … Continue reading Bloom and Others v The Pensions Regulator (Nortel, Re): ChD 10 Dec 2010
Not all debts which were eligible for proof in bankruptcy were also eligible for a set off. Rose Ljexplained the doctrine of equitable marshallling, saying: ‘The doctrine of marshalling applies where there are two creditors of the same debtor, each owed a different debt, one creditor (A) having two or more securities for the debt … Continue reading Bank of Credit and Commerce International Sa (In Liquidation) (No 8): CA 2 Oct 1996
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
The claimant investors said that their financial adviser, the defendant insolvent company, had given them negligent advice. The action was brought as a preliminary to claiming against the defendant’s insurers under the 1930 Act, in the way made necessary by the Post Office and Bradley cases. Limitation defences were deployed to strike the action out. … Continue reading Financial Services Compensation Scheme Ltd v Larnell (Insurances) Ltd: CA 29 Nov 2005
A statutory demand was served against the guarantor of the lease after rent arrears arose. He applied for the demand to be set aside, and now appealed against its refusal. He said that the court would have set aside such a demand against the tenant, and should provide similar relief to a guarantor. Held: (Mummery … Continue reading Remblance v Octagon Assets Ltd: CA 17 Jun 2009
Contributory’s petition to wind up was not to be advertised before return date. Citations: Times 15-Feb-1996 Statutes: Insolvency Rules 1986 (1986 No 1925) Jurisdiction: England and Wales Insolvency Updated: 24 July 2022; Ref: scu.81644
Ordinarily the court would avoid two actions on similar facts where inconsistent decisions might be reached, but where issues on setting aside a statutory demand were genuinely separate, the separate actions could continue. Citations: Times 01-Jul-1998 Statutes: Insolvency Rules 1986 (1986 No 1925) 6.5.4(d) Jurisdiction: England and Wales Insolvency Updated: 24 July 2022; Ref: scu.81672
A restraint of the advertisement of a winding up petition was to be used only exceptionally. Citations: Times 17-Feb-1995 Statutes: Insolvency Rules 1986 4.11(1) Jurisdiction: England and Wales Insolvency Updated: 24 July 2022; Ref: scu.81697
The court was asked to make a retrospective appointment of a company administrator. Held: Henderson J (in a reserved judgement) said that he shared Morgan J’s misgivings, but like him regarded the jurisdiction as a useful one and was prepared to follow the practice. Judges: Henderson J Citations: [2011] EWHC 1668 (Ch) Links: Bailii Statutes: … Continue reading In re Frontsouth (Witham) Ltd and Another: ChD 30 Jun 2011
The applicant sought leave to appeal against a refusal to adjourn his examination in bankruptcy fearing that the contents would become public prejudicing his criminal trial abroad. The court had allowed a private examination, but he felt this was insufficient protection. Held: Leave was refused. Judges: Mummery LJ Citations: [2008] EWCA Civ 1360 Links: Bailii … Continue reading Rottmann v Brittain: CA 12 Nov 2008
A block order had been made transferring the duties of an insolvency practitioner to another. In the case of an individual practitioner resigning, a creditor would have to be notified so as to be allowed to object. Here, the applicant sought a review of the transfer ordered by the court, having been notified after the … Continue reading Commissioners of Customs and Excise v Allen: ChD 6 Feb 2003
The chairman of the creditors meeting had marked the proof of Petrus as objected to but had allowed Petrus to resulting in the appointment of the joint liquidators. The claimant now challenged this saying that had Petrus not been allowed tp vote he would have been appointed. Held: Lewison J set out the scheme: ‘The … Continue reading Power v Petrus Estates Ltd and others: ChD 31 Oct 2008
H had declared himself bankrupt. W asserted that he had done this by hiding his assets and fabricating debts in order to defeat her financial claims on the divorce. She appealed from a refusal to transfer the annulment proceedings to the family court to allow the investigation to become part of Judges: Thorpe, Rimer, Patten … Continue reading Arif v Zar and Another: CA 18 Jul 2012
The remuneration of a provisional liquidator takes precedence over the costs and expenses of a liquidator. Accordingly the expenses of the provisional liquidator for VAT, and PAYE and National Insurance take a similar priority over later costs of a liquidator. Citations: Times 29-Jun-1999 Statutes: Insolvency Rules 1986 4.218(1)(a) Jurisdiction: England and Wales Insolvency Updated: 19 … Continue reading In Re Grey Martin Ltd: ChD 29 Jun 1999
A stranger to an insolvency petition has no locus standi to apply later to rescind the winding up order. Citations: Times 06-May-1997, Gazette 21-Jan-1998 Statutes: Insolvency Rules 1986/1925 r 7.47 Jurisdiction: England and Wales Insolvency Updated: 19 July 2022; Ref: scu.82059
The court cannot simply disapply rules, including and particularly those allowing set off in insolvency cases. Citations: Times 08-Oct-1996 Statutes: Insolvency Rules 1986 4.90 Jurisdiction: England and Wales Insolvency Updated: 18 July 2022; Ref: scu.81742
There had been a material irregularity in a creditors’ meeting called to approve a voluntary arrangement, where the chair of the meeting had put forward an highly debatable estimate of one creditor’s debt. The voluntary arrangement was set aside. Judges: Ferris J Citations: Gazette 18-Jan-1995, Times 23-Jun-1994 Statutes: Insolvency Rules 1986 1.17 Jurisdiction: England and … Continue reading In Re Cranley Mansions Ltd: ChD 23 Jun 1994
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 been made and that was the basis of the statutory demand. The claimant said that his … Continue reading Popely v Popely: ChD 25 Jul 2003
The claimant appealed refusal to set aside a statutory demand made by the respondent society. The proposed defence had been already been dismissed by the courts. Held: Such a consideration was very relevant, but not necessarily determinative. The debtor was obliged to proceed quickly, and could not delay his application. He had to demonstrate a … Continue reading Thomas-Everard and Others v Society of Lloyd’s: ChD 18 Jul 2003
The statement was issued as a gloss on the 1994 practice statement. A party wishing to restrict access to all or any part of an independent report prepared in support of an application for an administration order must be ready to support their application with proper reasons. Each application must be dealt with on its … Continue reading Practice Statement (Administration order: Reports): ChD 15 Apr 2002
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise. Held: The sums paid out and preferential debts could be set off against the VAT … Continue reading Secretary of State for Trade and Industry v Frid: HL 13 May 2004
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 debtor on the creditor. The cross-claim must still be one which … Continue reading Popely v Popely: CA 30 Apr 2004
The liquidators had lost their legal action, and had been ordered to pay the present claimants their costs. They sought payment out of an insolvency services account in competition with the solicitors for the liquidators. Held: An award of costs was not a payment of ‘expenses incurred in the winding up’ and therefore the court … Continue reading Digital Equipment Co Ltd and Others v Bower and Others: ChD 4 Dec 2003
The mortgage lender had proved in the voluntary arrangement as an unsecured creditor. It had valued the security as less than the debt, and accepted a dividend on the portion remaining unsecured. It now sought to enforce the security. It was argued that it had compromised its entire claim. Held: The lender had compromised its … Continue reading Household Mortgage Corporation plc v Whitehead and Another: CA 14 Nov 2002
The Court reminded insolvency practitioners of fiduciary duties to creditors when refusing application for further payment on account of costs. Ferris J considered the principles applicable to fixing the remuneration of receivers of the estate of Robert Maxwell appointed by the court under section 37 of the 1981 Act. Their total recoveries before their remuneration … Continue reading Mirror Group Newspapers Plc v Maxwell and Others (No 2): ChD 15 Jul 1997
(Cayman Islands) In the course of trading the company had given security to carry on its insurance business. On its insolvency, the administrators required the creditor to bring into hotchpot credit received in a foreign jurisdiction. It was said that having obtained an advantage over other unsecured creditors for the amount secured, the claiming creditor … Continue reading Cleaver, Bodden v Delta American Reinsurance Company: PC 1 Feb 2001
The claimant newspaper sought information as to the circumstances of the bankruptcy order made on the defendant, an Irish citizn said to have chosen the Eangland and Wales jurisdiction for his application. Judges: Baister Reg Citations: [2013] EWHC B12 (Ch), [2013] BPIR 1092 Links: Bailii Statutes: Insolvency Rules 1986 7.31A(6) Jurisdiction: England and Wales Insolvency … Continue reading Times Newspapers Ltd v McNamara: ChD 13 Aug 2013
The court considered the application of ‘the bankruptcy template of section 382 to the rules governing the winding up of companies’. Held: The phrase ‘obligation incurred’ in Rule 13.2(1)(b) was inapt to describe a common law duty of care in negligence which existed on and was breached by a company before liquidation, but where actionable … Continue reading In re T and N Ltd and Others (No 3): ChD 16 Jun 2006
Ms Halabi applied to annul her bankruptcy order, made for non payment of her rates. She applied within approximately 6 months of her adjudication. Her bankrupt estate was solvent but illiquid. She had not previously appreciated that she had sufficient equity in her property (over andpound;70k) to borrow sufficient to discharge her debt. Held: The … Continue reading Halabi v London Borough of Camden: ChD 14 Feb 2008
four applications by the applicants, who are landlords of four properties that were let to companies that are now all in administration, by which applications the applicants apply for a. permission under Paragraph 43 of Schedule B1 to the Insolvency Act 1986 (‘IA’) to forfeit the leases of the properties; and b. a direction under … Continue reading Leisure (Norwich) II Ltd and Others v Luminar Lava Ignite Ltd: ChD 28 Mar 2012
The liquidator in a creditor’s voluntary liquidation sought a direction that he could take his costs of pursuing former directors in actions for wrongful trading and preferences, out of realised funds. It was held that nothing in the rules or Act supported the contention that such costs would be expenses of the voluntary winding up. … Continue reading Lewis v Commissioner of Inland Revenue and others: CA 2 Nov 2000
A former partner in a firm could not set off sums due to him from the former partnership, against sums expended by remaining partners in acting to protect partnership property, and claimed from him. There was insufficient mutuality to enforce the set off. The one claim was by partners but as trustees, and the other … Continue reading Hurst v Bennett and Others In Re A Debtor (No 302 of 1997): CA 16 Feb 2001
K had been convicted of two counts of obtaining property by deception contrary to section 15 of the Theft Act 1968. He was also convicted of two counts under the Insolvency Act 1986, namely that being a bankrupt (a) he removed property which he was required to deliver up to the Official Receiver or his … Continue reading Regina v Kansal: CACD 24 Jun 1992
A report prepared on support of an application for an administration order need not always be detailed. Citations: Ind Summary 21-Feb-1994 Statutes: Insolvency Rules 1986 2.2 Jurisdiction: England and Wales Insolvency Updated: 19 May 2022; Ref: scu.84991
A costs order made in the course of family proceedings had the same protection against enforcement through insolvency proceedings as do other family orders. No provable bankruptcy debt arose because it was made under an order in family proceedings. There were no special circumstances to require the court to exercise its discretionary jurisdiction to found … Continue reading Levy v Legal Services Commission (Formerly the Legal Aid Board): CA 10 Nov 2000
The tenant company went into liquidation, the receiver disclaimed the lease, and the landlord claimed compensation under the Act. The question concerned how the compensation was to be calculated. Held: Where a solvent tenant under an onerous lease goes into voluntary liquidation, and the liquidator disclaims the lease, the right to payment of rent disappears, … Continue reading In Re Park Air Services Plc; Christopher Moran Holdings Ltd v Bairstow and Another: HL 4 Feb 1999
The requirement that a statutory demand must be signed by someone claiming authority of the creditor to sign it could be satisfied by someone who in fact did have authority in law to make the demand. The rules should be read according to its purpose. Judges: Morritt, Chadwicj LJJ, Charles J Citations: Times 14-Jun-2000, [2000] … Continue reading Dacorum Borough Council v Horne: CA 26 May 2000
The Regulation under question was procedural;, and a failure to comply with its requirements was not to be deemed fatal. The requirement for a trustee to identify the transactions to be set aside did not require every single part of the scheme to be detailed, provided as in this case the purpose of the scheme … Continue reading Ashe v Mumford and Others: ChD 7 Mar 2000
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
No mandatory set off on liquidation without the requirement for mutuality. The Court accepted a proposition that a chargeback arrangement was inefficiency, no implication followed as to the recourse against the Depositor of a collateral security. Citations: Times 08-Jan-1996 Statutes: Insolvency Rules 1986 4.90 Jurisdiction: England and Wales Cited by: Cited – Tam Wing Chuen … Continue reading Morris and Others v Agrichemicals Ltd and Others: CA 20 Dec 1995
An expedited bankruptcy petition could be filed, despite the existence of an outstanding application to set aside the statutory demand on which it was based. Section 270 overrides section 267(2(d). Judges: Mummery J Citations: Times 12-Jul-1993 Statutes: Insolvency Act 1986 270, Insolvency Rules 1986 (1986 No 1925) Insolvency Updated: 15 May 2022; Ref: scu.77574
The claimant had failed in an action for damages against the respondent, and had failed to pay the costs award. The respondent issued a statutory demand. He claimed that it was invalid because the chief constable had changed in the interim, and there had been no assignment of the benefit of the order. Held: The … Continue reading Coulter v Chief Constable of Dorset Police: ChD 12 Dec 2003
When reviewing an order the same approach should be was applied on the original hearing namely ‘whether the convening of a creditors’ meeting as required under the Insolvency Rules would serve any useful purpose’ Citations: [1999] 2 BCLC 19 Statutes: Insolvency Rules 1986 (1986 No 1925) Jurisdiction: England and Wales Insolvency Updated: 11 May 2022; … Continue reading In re Equity Nominees Ltd: 1999
The claimant appealed against a refusal to set aside a statutory demand. He had given a cheque at a land auction, and it had bounced on his instructions, saying that the property had been misrepresented. Held: The auctioneer had specifically warned off bidders who had not inspected the site. However the paperwork was clearly capable … Continue reading Ahmed v Landstone Leisure Ltd: ChD 30 Jan 2009
The normal rule that costs are to follow payment of the debt after the issue of an insolvency petition was exceptionally displaced when mistakes in the petition meant that the defendant had had to incur unnecessary costs. Citations: Times 18-Jun-1998 Statutes: Insolvency Rules 1986 (1986 No 1925) 6.8 Jurisdiction: England and Wales Insolvency Updated: 08 … Continue reading In Re A Debtor (No 510 of 1997): ChD 18 Jun 1998
A court has the power to extend the time allowed for a challenge to a voluntary arrangement. Citations: Times 24-Dec-1996, [1997] 1 BCLC 313 Statutes: Insolvency Rules 1986 (SI 1986 No 1925) 4.218(1) 4.220(1) Jurisdiction: England and Wales Cited by: Cited – Warley Continental Services Ltd (in liquidation) v Johal ChD 7-Oct-2002 The liquidator sought … Continue reading Tager v Westpac Banking Corporation and Others: ChD 24 Dec 1996
The trustee in bankruptcy had absolute priority for payment of his fees, costs, charges and disbursements only until the point where the bankrupts assets were transferred to a supervisor of a subsequent voluntary arrangement. Citations: Times 24-May-1999 Statutes: Insolvency Rules 1986 (1986 No 1925) 5.21.2 Jurisdiction: England and Wales Insolvency Updated: 07 February 2022; Ref: … Continue reading Rooney v Cardona and Another: ChD 24 May 1999
The court considered the application of statutory interest pursuant to rule 2.88 of the Insolvency Rules 1986 on debts proved in the administration of Lehman Brothers International (Europe). Hildyard J [2016] EWHC 2417 (Ch) Bailii Insolvency Act 1986, Insolvency Rules 1986 2.88 England and Wales Insolvency Updated: 23 January 2022; Ref: scu.569926
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus. Held: The Court considered the so called waterfall of distributions made on liquidation which proved to be … Continue reading LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others: SC 17 May 2017
The court was asked whether, where a firm of solicitors provides legal services to a company in administration, Hellas Telecommunications (Luxembourg) II SCA (‘the Company’), and the firm and the administrators agree the amount of their fees, subsequently appointed liquidators of the company can ask the companies court to assess, that is, determine the amount … Continue reading Hellas Telecommunications (Luxembourg) Ii Sca, Joint Liquidators of v Slaughter and May (A Firm): CA 24 May 2016
Several companies had been liquidated. The liquidators and the respondent disputed how much of the latter’s account had priority as administration expenses. [2014] EWHC 2721 (Ch) Bailii Insolvency Rules 1986 England and Wales Utilities, Insolvency Updated: 18 December 2021; Ref: scu.535480
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was this an expense properly arising in the insolvency, and payable as … Continue reading Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc: HL 20 Feb 2002
The court considered the approach to be taken on applications for extensions of time to apply to challenge refusals of proof of debt in an insolvency, and how to test applications for relief from sanctions. Held: The 1986 Rules which provided for extensions to time given for compliance with the Rules were not limited in … Continue reading Contrarian Funds Llc v Lomas and Others: ChD 23 May 2014
The bankrupt appealed from a refusal of his challenge to the remuneration claimed by his trustees in that bankruptcy. Held: On an an application for annulment of a bankruptcy, there was no need of principle why the court should allow for a debt due to a creditor, where that creditor knew of the bankruptcy but … Continue reading Salliss v Hunt and Others: ChD 10 Feb 2014
The claimants sought to have set aside statutory demands served to enforce judgmens, they said under a discrepancy. The order refusing their application should they said, have notified them of their right to appeal. Held: None of the applicable rules expressly required otification that an appeal was available. Newey J [2015] EWHC 932 (Ch), [2015] … Continue reading Clarke v Cognita Schools Ltd (T/A Hydesville Tower School): ChD 1 Apr 2015
The petitioner’s winding-up petition had been dismissed on the defendant company being put into administration. The petitioner asked for its costs to be paid as an administration expense payable in priority to the administrator’s expenses. Held: Rule 2.12 must be read purposively. The order could be made, though not with the priority requested. Briggs J … Continue reading Irish Reel Productions Ltd v Capitol Films Ltd: ChD 10 Feb 2010
The bankrupt renewed his request for permission to appeal against a refusal to adjourn his public examination in bankruptcy. The court had allowed a private examination so as not to prejudice pending criminal proceedings in Germany. Held: The court had power to order the hearing to be conducted in private and had done so. A … Continue reading In re Rottmann (a Bankrupt): CA 18 Mar 2009
Former employees had obtained a protective award against the company for failing to consult on the impending redundancies and submitted proofs of debt to the liquidator who sought guidance from the court. The judge had held that since the Act provided only one remedy, the protective awards were not provable. Held: The appeal was allowed. … Continue reading Haine v Secretary of State for Business Enterprise and Regulatory Reform and Another; Day v Haine: CA 11 Jun 2008
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 court was asked ‘What relation should the costs and remuneration bear to the circumstances, and in particular the size, of the bankruptcy?’ The bankrupt had considered that the costs first awarded to the trustee in bankruptcy and the trustee’s solicitors were disproportionate. On appeal they had been reduced, but he appealed again seeking a … Continue reading Brook v Reed: CA 25 Mar 2011
There is no room for conditional orders in the statutory demand procedure. Rules have been made to allow the court to set aside an application on a statutory demand. . .
An out of court appointment of joint administrators of the company, a one-man building company, had been made by the principal shareholder’s executors at a time when, unknown to them, a creditor’s petition for the winding up of the company had . .
A deposit at a bank which had been given in charge to the bank to secure the liabilities of a third party was not a mutual arrangement, and therefore there no statutory set off applied, and the funds could be reclaimed. . .
References: Times 08-Jan-1996 Ratio: No mandatory set off on liquidation without the requirement for mutuality. Statutes: Insolvency Rules 1986 4.90 Last Update: 01-Sep-16 Ref: 83841
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The court does not have power to order the payment of a liquidator’s costs which had not been properly incurred. The costs of unsuccessful litigation were not recoverable in priority to a secured creditor in priority to the charge. As to rule 7.47(1) of the Rules: ‘But, since the point has been raised and may … Continue reading Mond and Another v Hammond Suddards and Another: CA 15 Jun 1999
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court. After a comprehensive review of all the authorities, Munby J said: ‘The common theme running through all the cases in which the court has … Continue reading Ben Hashem v Ali Shayif and Another: FD 22 Sep 2008
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which the claimant now sought to enforce. Held: The possibility of a future costs … Continue reading Glenister v Rowe: CA 21 Apr 1999
A contractor had done defective work in breach of a building contract with the developer but the loss was suffered by a third party who had by then purchased the development. The developer recovered the loss suffered by the purchaser. Held: The benefit of a contract may be assigned to a third party without the … Continue reading Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd and Others; St. Martins Property Corporation Ltd v Sir Robert McAlpine: HL 8 Dec 1993
The parties had agreed to an ancillary relief order on their divorce. The husband was made bankrupt without having paid the lump sum agreed. The former wife and now claimant had received no dividend. Debts which were not provable in the bankruptcy are not released: they are untouched by the process. The former husband now … Continue reading McRoberts v McRoberts: ChD 1 Nov 2012
The liquidator had sought to set aside a transfer of company property as having been made at an undervalue. The defence was that the buyer had assumed some of the company’s debt in addition, and in effect that it was a preference on other creditors. The court had then issued an interlocutor in effect debarring … Continue reading Henderson v 3052775 Nova Scotia Ltd: HL 10 May 2006
EAT Deposit ordered. Order lost in post due to the Claimant putting wrong post-code on ET1. Review. Distinguishing Judgments from Orders. Strike-out. Extending time. Judges: His Honour Peter Clark Citations: [2005] UKEAT 0318 – 05 – 2907, UKEAT/0319/05/TM, UKEAT/0318/05/TM, [2005] ICR 1647, UKEAT/0320/05/TM, [2005] IRLR 836 Links: Bailii, EATn Statutes: Employment Tribunal Rules 2004 20(1) … Continue reading Sodexho Ltd v Gibbons: EAT 14 Jul 2005
The court was asked to interpret the provisions as to ‘client money rules’ and ‘client money distribution rules’ in the FSA handbook, and to consider the consequences as to the applicable trusts. Substantial sums paid by clients to the bank before its insolvency were now unavailable. Held: The appeal failed. The statutory trust under the … Continue reading Lehman Brothers International (Europe), Re: SC 29 Feb 2012
The director sought to appeal an order disqualifying him form acting as a company director. Held: The disqualification proceedings were properly charactised as insolvency proceedings and therefore there was no requirement for permission to appeal to a high court judge. Judges: Morritt Citations: [2005] EWHC 888 (Ch), Times 26-May-2005 Links: Bailii Statutes: Company Directors Disqualification … Continue reading Secretary of State for Trade and Industry v Paulin: ChD 13 May 2005
The court’s discretion in appointing provisional liquidators is unfettered provided it is exercised in a ‘proper judicial manner’. Sir Robert Megarry V-C said: ‘I would respectfully express my complete agreement with the view taken by [the judge]. I do not think that the old authorities, properly read, had the effect of laying down any rule … Continue reading In re Highfield Commodities Ltd: ChD 1985
A bankrupt had, before his bankruptcy disposed of his share in a house at an undervalue. His wife appealed an order that the share disposed of should vest entirely in the trustee in bankruptcy. Matrimonial proceedings had also been commenced. Held: The wife was seeking effectively not re-instatement, but the creation of a position which … Continue reading Gita Ram v Baskinder Ram,Solinder Ram, Monder Ram and Maurice William Russell: CA 5 Nov 2004
The department complained that the defendants had entered into a transaction with their farm at an undervalue so as to defeat its claim for recovery of sums due. The transaction used the grant of a tenancy by the first chargee. Held: The farmers’ appeal as to the farm transaction failed: ‘beyond argument that DEFRA was … Continue reading Feakins and Another v Department for Environment Food and Rural Affairs (Civ 1513): CA 9 Dec 2005
The respondent bank had obtained a charging order nisi against the applicant’s property. The applicant then obtained an order under s252 of the act requiring any further action against his estate to be stayed. The bank nevertheless obtained an order absolute. The claimant was not represented at that hearing. Several years later he sought to … Continue reading Clarke v Coutts and Co: CA 17 Jun 2002
On the winding up of the company, there had unexpectedly been a surplus of assets after payment of all debts. The court was now asked to determine claims to be allowed before a distribution was made. Held: The court made declarations as follows: ‘i) The claims of LBHI2 under its subordinated loan agreements with LBIE … Continue reading Re Lehman Brothers International (Europe) and Others: ChD 14 Mar 2014
A claim was made in respect of personal injuries sustained by a passenger when a tram ran out of control. The Company was in insolvent liquidation. A claim for the same amount for the same injuries could be made in contract or in tort. Held: The unliquidated claim in contract was provable, but not the … Continue reading Re Great Orme Tramways Co: 1934
