The appellant challenged a refusal to set aside a statutory demand, in respect of his director’s loan account with the respondent company, saying the court should have accepted other accounts to set off against that debt.
Held: A statutory demand may be set aside if ‘the debtor appears to have a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt or debts specified in the statutory demand’ and by Rule 6.5(4)(b) a statutory demand may be set aside if ‘the debt is disputed on grounds which appear to the court to be substantial’. The procedure had been misused by the respondents as a tactical move. The demand was set aside.
Judges:
Buxton LJ, Lawrence Collins LJ
Citations:
[2007] EWCA Civ 793
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Re Welsh Brick Industries Ltd CA 1946
In a disputed debt case a winding-up order had been made by the county court judge. Notwithstanding that the company had been given unconditional leave to defend the petitioner’s action in the King’s Bench Division for recovery of the debt, it was . .
Cited – National Westminster Bank v Daniel CA 1993
The defence contained two contradictory grounds, and the defendant’s evidence again contradicted the defences. The plaintiff sought summary judgment.
Held: A judge, when considering whether a claim should be determined then or allowed to . .
Cited – Portsmouth v Alldays Franchising Ltd 2005
Application to set aside a statutory demand. . .
Cited – Hofer v Strawson ChD 31-Mar-1999
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 . .
Cited – Swain v Hillman CA 21-Oct-1999
Strike out – Realistic Not Fanciful Chance Needed
The proper test for whether an action should be struck out under the new Rules was whether it had a realistic as opposed to a fanciful prospect of success. There was no justification for further attempts to explain the meaning of what are clear . .
Cited – Kellar v BBR Graphic Engineers (Yorks) Ltd ChD 2002
The court was asked whether the district judge had applied the right test on an application to set aside a statutory demand because the conclusions of the district judge referred to a real prospect of success, the test used in CPR 24.2, rather than . .
Cited – In re The Arena Corporation Limited; Commissioners for Customs and Excise v The Arena Corporation Limited; the Arena Corporation Limited v Schroeder CA 25-Mar-2004
Sir Andrew Morritt V-C said that in the context of winding up proceedings the test for whether there is a genuine triable issue in a disputed claim, is whether the debt is bona fide disputed on substantial grounds, which, for practical purposes, is . .
Cited – Guinan III v Caldwell Associates 2004
. .
Mentioned – Seawind Tankers Corporation v Bayoil SA CA 12-Oct-1998
Although a company admitted a debt, it was nevertheless right to set aside a petition for winding up under that debt, where the company had an unquantified but greater counterclaim within the same proceedings, even if that claim could not presently . .
Cited – Popely v Popely CA 30-Apr-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 . .
Cited – E D and F Man Liquid Products Ltd v Patel and Another CA 4-Apr-2003
The rules contained two occasions on which a court would consider dismissal of a claim as having ‘no real prospect’ of success.
Held: The only significant difference between CPR 24.2 and 13.3(1), is that under the first the overall burden of . .
Cited – Westdeutsche Landesbank Girozentrale v Islington London Borough Council HL 22-May-1996
Simple interest only on rate swap damages
The bank had paid money to the local authority under a contract which turned out to be ultra vires and void. The question was whether, in addition to ordering the repayment of the money to the bank on unjust enrichment principles, the court could . .
Cited – Hurst v Bennett and others CA 8-Oct-2001
A statutory demand served on Mr Hurst in relation to an indemnity on partners to trustees of the lease would not be set aside because of Mr Hurst’s claims against the partnership. It was because this claim was against the partners in their capacity . .
Cited – English v Emery Reimbold and Strick Ltd; etc, (Practice Note) CA 30-Apr-2002
Judge’s Reasons Must Show How Reached
In each case appeals were made, following Flannery, complaining of a lack of reasons given by the judge for his decision.
Held: Human Rights jurisprudence required judges to put parties into a position where they could understand how the . .
Cited – Clark v Cutland CA 18-Jun-2003
One director discovered that his co-director had withdrawn substantial sums from the company. . .
Cited – Coulter v Chief Constable of Dorset Police CA 8-Oct-2004
The appellant had failed in his action against the police and been ordered to pay the costs. A statutory demand was issued in the name of the respondent, but as the new chief constable had no deed of assignment, he was only equitable assignee.
Cited by:
Cited – Collier v P and M J Wright (Holdings) Ltd CA 14-Dec-2007
Agreement for payment by joint debtor not contract
The claimant appealed against refusal of an order to set aside a statutory demand. He said that he had compromised a claim by the creditors. He argued for an extension to the Rule in Pinnel’s case, so that where a debtor agrees to pay part of a . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 11 July 2022; Ref: scu.258421