Category: Insolvency

Mann v Goldstein: ChD 1968

Ungoed-Thomas J said: ‘When the creditor’s debt is clearly established it seems to me to follow that this court would not, in general at any rate, interfere even through the company would appear to be solvent, for the creditor would as such be entitled to present a petition and the debtor would have his own remedy in paying the undisputed debt which he should pay. So, to persist in non-payment of the debt in such circumstances would itself either suggest inability to pay or that the application was an application that the court should give the debtor relief which it itself could provide, but would not provide, by paying the debt.’ and ‘For my part, I would prefer to rest the jurisdiction directly on the comparatively simple propositions that a creditor’s petition can only be presented by a creditor, that the winding up jurisdiction is not for the purpose of deciding a disputed debt (that is, disputed on substantial and not insubstantial grounds), since until a creditor is established as a creditor he is not entitled to present the petition and has no locus standi in the Companies Court; and that, therefore, to invoke the winding up jurisdiction when the debt is disputed (that is, on substantial grounds) or after it has become clear that it is so disputed is an abuse of the process of the court.’

Judges:

Ungoed-Thomas J

Citations:

[1968] 1 WLR 1091, [1968] 2 All ER 769

Jurisdiction:

England and Wales

Cited by:

Cited – Cornhill Insurance plc v Improvement Services Ltd 1986
Held: Where a company was under an undisputed obligation to pay a specific sum and failed to do so, it could be inferred that it was unable to do so; that accordingly, the defendants could properly swear to their belief in the plaintiff company’s . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 04 June 2022; Ref: scu.535114

National Westminster Bank Plc v Jones and Others: ChD 7 Jul 2000

A transaction could be deemed to be at an undervalue and caught by the section even though it made no difference to the overall assets and even though only one rather than the generality of creditors was prejudiced by the transaction. Here, by creating a tenancy in favour of a limited company whose shares they also owned, they had not reduced their assets, but had prejudiced a chargee of the assets.

Citations:

Times 07-Jul-2000, Gazette 13-Jul-2000

Statutes:

Agricultural Credits Act 1928 7(1), Insolvency Act 1986 423

Jurisdiction:

England and Wales

Cited by:

Appeal from – National Westminster Bank plc v Jones and Others CA 24-Oct-2001
The respondent farmers charged the farm by way of an agricultural floating charge to the claimants. On coming into difficulties, they set up a limited company and granted a tenancy in its favour and transferred assets to it. The bank obtained . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 04 June 2022; Ref: scu.84215

XYZ v HM Revenue and Customs and Another: ChD 18 Jun 2010

Application by the liquidator of ABC Limited (‘ABC’) under section 236 of the Insolvency Act 1986 for the disclosure by H.M. Revenue and Customs of information obtained from the prosecution authorities of the Netherlands under an International Letter of Request which sought mutual assistance in accordance with the relevant conventions relating to criminal matters.

Judges:

N Strauss QC

Citations:

[2010] EWHC 1645 (Ch), [2010] BPIR 1297

Links:

Bailii

Statutes:

Insolvency Act 1986 236

Jurisdiction:

England and Wales

Insolvency

Updated: 04 June 2022; Ref: scu.432738

Cleaver, Bodden v Delta American Reinsurance Company: PC 1 Feb 2001

(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 should make available to all creditors the payment already received.
Held: The difference here, was that the payment received had arisen from a letter of credit, and had never been part of the insolvent company’s estate. Hotchpot applies only to assets regarded as part of the estate in liquidation. Rule 4.88 did not operate as an exception to the hotchpot rules. Appeal dismissed.

Judges:

Lord Steyn Lord Lloyd of Berwick Lord Cooke of Thorndon Lord Scott of Foscote Sir Patrick Russell

Citations:

Appeal No 5 of 2000, [2001] UKPC 6

Links:

Bailii, PC

Statutes:

Insolvency Rules 1986 4.88 4.96

Citing:

Cited – Banco de Portugal v Waddell HL 1880
There was both an English and a foreign insolvency, the debtors having traded as wine merchants in England and in Portugal. They presented a petition for their adjudication in bankruptcy in England in December 1877. Insolvency proceedings were taken . .
Cited – Selkrig v Davis 1814
Rules in Hotchpot . .
Cited – Ex parte Wilson 1871
Hotchpot principles . .
Cited – Moor v Anglo-Italian Bank CA 1879
The defendant bank had a mortgage over land in Florence belonging to a company in liquidation. The liquidator of the company applied to the court to restrain the bank from realising its security.
Held: The application failed. Jessel M.R. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Commonwealth, Wills and Probate

Updated: 04 June 2022; Ref: scu.163274

Phillips (Liquidator of A J Bekhor and Co ) and Another v Brewin Dolphin Bell Lawrie: HL 18 Jan 2001

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 respondent refused to pay under the sub-lease. The trustee of the company in liquidation sought to recover the payment on the basis that the agreement had been at an undervalue. The respondent had not genuinely sought to sub-lease the computer equipment.
Held: ‘The value of an asset that is being offered for sale is, prima facie, not less than the amount which a reasonably well informed purchaser is prepared, in arm’s length negotiations, to pay for it.’ The payments, repairing the sale at an undervalue, were recoverable.

Judges:

Lord Scott

Citations:

Gazette 22-Mar-2001, Times 23-Jan-2001, [2001] UKHL 2, [2001] 1 All ER 673, [2001] 1 WLR 143

Links:

Bailii, House of Lords

Statutes:

Insolvency Act 1986 238(4)(b)

Jurisdiction:

England and Wales

Cited by:

Cited – Re Thoars (Dec’d); Reid v Ramlort Ltd ChD 15-Nov-2002
The deceased had a valuable life insurance policy. Before an operation he wrote it in trust with no consideration. He died in the operation. He was insolvent. The issue was as to when the policy was to be valued.
Held: The property was to be . .
Cited – Re Thoars (Dec’d); Reid v Ramlort Ltd ChD 2003
The company claimed the benefit of an insurance policy. They had paid certain premiums and the trustee had made a declaration that it was held on trust for the company. The insured died in Scotland, intestate and insolvent.
Held: The . .
Cited – Ramlort Ltd v Michael James Meston Reid CA 8-Jul-2004
The company sought to claim under a life policy. The deceased had died in Scotland insolvent. The trustee of the policy had declared that he held it on trust for the claimant, but the defendant, the judicial factor of the estate, said the . .
Cited – OBG Ltd OBG (Plant and Transport Hire) Ltd v Raymond International Ltd; OBG Ltd v Allen CA 9-Feb-2005
The defendants had wrongfully appointed receivers of the claimant, who then came into the business and terminated contracts undertaken by the business. The claimant asserted that their actions amounted to a wrongful interference in their contracts . .
Cited – Feakins and Another v Department for Environment Food and Rural Affairs (Civ 1513) CA 9-Dec-2005
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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 04 June 2022; Ref: scu.162915

Webster and Another v Mackay: ChD 19 Jul 2013

The claimants appealed from a refusal to annul their bankruptcies, saying that they should not ever have been made, because the petition debt was not a liquidated debt. The claimants said that the debt had been repudiated.
Held: The appeal failed. A present right to future payment was not transformed into a claim for damages upon acceptance of a repudiatory breach.

Judges:

Purle QC

Citations:

[2013] EWHC 2571 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986 282(1)(a)

Jurisdiction:

England and Wales

Insolvency

Updated: 04 June 2022; Ref: scu.514975

In re Telewest Communications Plc: ChD 26 Apr 2004

A scheme of arrangement had been proposed. The creditor complained that in providing for payment in a currency other than that agreed, it had been prejudiced.
Held: The provision in the scheme did purport to alter the claimant’s rights.

Judges:

The Honourable Mr Justice David Richards

Citations:

[2004] EWHC 924 (Ch), Times 27-May-2004

Links:

Bailii

Statutes:

Companies Act 1985 425(1)

Jurisdiction:

England and Wales

Citing:

Cited – Sovereign Life Assurance v Dodd 1892
‘What is the proper construction of that statute? It makes the majority of the creditors or of a class of creditors bind the minority: it exercises a most formidable compulsion upon dissentient, or would-be dissentient, creditors; and it therefore . .
Cited – In the Matter of Drax Holdings Limited and in the Matter of InPower Limited ChD 17-Nov-2003
A company incorporated in Jersey comes within the Act for the purposes of the section. An English court has jurisdiction to wind up a foreign company if it has assets here or some other sufficient connection with this country. . .
Cited – In the Matter of Hawk Insurance Company Limited CA 23-Feb-2001
Arrangements for putting in place voluntary arrangements for companies. Discussing Sovereign Insurance: ‘When applying Bowen LJ’s test to the question ‘are the rights of those who are to be affected by the scheme proposed such that the scheme can be . .
Cited – Wight, Pilling, Mackey v Eckhardt Marine GmbH PC 14-May-2003
(Cayman Islands) An international bank went into liquidation in the Cayman Islands, with liabilities in Bangladesh. A new bank was created in Bangladesh, and the applicants sought to make the new bank liable, and through them the liquidators.
Cited – In re Humber Ironworks and Shipbuilding Co 1869
The assets of a company held on the statutory trusts should be distributed as if they had all been collected and distributed on the date of the winding up order: ‘I think the tree must lie as it falls; that it must be ascertained what are the debts . .
Cited – In re Anglo American Insurance Ltd 2001
. .
Cited – In re Richards and Co 1869
The court refused to sanction a scheme because it treated a creditor with preferential rights in a liquidation as an ordinary unsecured creditor. . .
Cited – Evans v Bartram HL 1937
When a defendant seeks to set aside a regular judgment which had been obtained by default, the test for setting it aside is: ‘In a case like the present there is a judgment, which, though by default, is a regular judgment, and the applicant must . .
Cited – Miliangos v George Frank (Textiles) Ltd HL 1975
The issue was whether an English court was able to award damages in Sterling only.
Held: The House distinguished clearly between the substance of the debtor’s obligations and the effect of English procedural law when a debt in a foreign . .
Cited – In re Dynamics Corpn of America ChD 1976
No allowance is made in an insolvency for exchange rate fluctuations which affect the sterling value of a debt in foreign currency after the date of the winding up order. The purpose of the rule that debts are valued at the date of winding up is to . .
Cited – In re Lines Bros Ltd CA 1982
The liquidators in a creditors voluntary liquidation converted foreign currency debts of the company into Sterling at the rate of exchange prevailing at the date of the resolution to wind up. As a result of the depreciation of Sterling against the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 04 June 2022; Ref: scu.196064

In re Millenium Advanced Technology Ltd: ChD 2 Apr 2004

The company sought to have struck out as an abuse an application to have it would up on the just and equitable ground. The status of the authority as creditor was disputed.
Held: A petition was properly presented only if the petioner bona fide pursued some interest arising from the issue which gave him standing to apply. Where a creditor sought to pursue his private interests, the question went not as to its standing to issue the petition, but as to whether the application would be an abuse. The assertion of public interest issues did not deprive the authority of its locus standi to issue, and nor in this case was it an abuse. The existence of debts did not istelf resolve the issue of whether the just and equitable grounds were satisfied. The petition should be amended to pursue the ground that the company was unable to pay its debts.

Judges:

Michael Briggs QC

Citations:

Times 29-Apr-2004

Statutes:

Insolvency Act 1986 122(1)(g)

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 04 June 2022; Ref: scu.196578

Shephard v Wheeler: ChD 15 Feb 2000

An administrator had obtained a grant in the estate of the deceased without disclosing that, although he claimed to be a Chartered Accountant, he had lost his membership, that he was a bankrupt and that the deceased had been a creditor in his bankruptcy. The extent of this wilful failure to disclose was such as to justify revocation of the grant. In the circumstances full disclosure was required. The fact that the bankruptcy was discoverable as a public fact by a search did not obviate the need for disclosure.

Citations:

Times 15-Feb-2000

Jurisdiction:

England and Wales

Wills and Probate, Insolvency

Updated: 04 June 2022; Ref: scu.89217

Mander v Evans: ChD 12 Jul 2001

The idea of fraudulent activity under the Act was confined to actual dishonesty of the defendant in line with Derry v Peek. It should not be extended to include acts which were only fraudulent under wider notions of equitable fraud. In this case assumed undue influence could not be sufficient to come within the section.

Citations:

Times 25-Jun-2001, Gazette 12-Jul-2001

Statutes:

Insolvency Act 1986 281(3)

Jurisdiction:

England and Wales

Insolvency

Updated: 04 June 2022; Ref: scu.83373

Times Newspapers Ltd v McNamara: ChD 13 Aug 2013

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

Updated: 03 June 2022; Ref: scu.569404

In re T and N Ltd and Others (No 3): ChD 16 Jun 2006

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 damage occurred only after the commencement of the liquidation.
Para (a) is concerned with liabilities to which the company ‘is subject’ at the date of the insolvency event, whereas para (b) is directed to those liabilities to which it ‘may become subject’ subsequent to that date, and that there is no overlap between these two categories.

Judges:

David Richards J

Citations:

[2006] EWHC 1447 (Ch), [2006] 1 WLR 1728, [2007] 1 All ER 851, [2007] Bus LR 1411

Links:

Bailii

Statutes:

Companies Act 1985 425, Insolvency Rules 1986 13.2(1)(b)

Jurisdiction:

England and Wales

Citing:

Applied – In re Sutherland, dec’d; Winter v Inland Revenue Commissioners HL 1963
The concept of a contingent liability was considered.
Held: In Scots law, a contingent liability is a liability which, by reason of something done by the person bound, may or may not arise depending on the happening of a future event.

Cited by:

Cited – Haine v Secretary of State for Business Enterprise and Regulatory Reform and Another; Day v Haine CA 11-Jun-2008
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 . .
Cited – Employers’ Liability Insurance ‘Trigger’ Litigation: BAI (Run Off) Ltd v Durham and Others SC 28-Mar-2012
The court considered the liability of insurers of companies now wound up for mesothelioma injuries suffered by former employees of those companies, and in particular whether the 1930 Act could be used to impose liability. The insurers now appealed . .
Cited – In re Nortel Companies and Others SC 24-Jul-2013
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 . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 03 June 2022; Ref: scu.242578

Pollard and Another v Ashurst: ChD 16 Mar 2000

Where a bankrupt was joint owner of property abroad but within the European Community, an English court could order the property to be sold and the proceeds paid to the trustee. Such an order could not be made against the land itself, but could be effective against the bankrupt in personam. The bankrupt and his wife could be ordered to sell the property at the best price reasonably obtainable, or to require the conveyance of the property to the trustee.

Citations:

Times 16-Mar-2000

Statutes:

Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (1968) (Cmnd 7395), Insolvency Act 1986 436

Jurisdiction:

England and Wales

Insolvency, International, Land

Updated: 03 June 2022; Ref: scu.84787

Sparkasse Hilden Ratingen Velbert v Benk and Another: ChD 29 Aug 2012

The claimant bank said that the court had had no jurisdiction to make the order it had on the respondent’s bankruptcy, saying that his ‘centre of activity’ had been Germany, and not England.

Judges:

Purle QC J

Citations:

[2012] EWHC 2432 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986 282(1)(a), Council Regulation (EC) No 1346/2000 of 29th May 2000 on Insolvency Proceedings

Jurisdiction:

England and Wales

Insolvency, Jurisdiction, European

Updated: 02 June 2022; Ref: scu.463776

Re The People’s Restaurant Group Ltd: ChD 30 Nov 2012

Petition praying for (amongst other relief):
1.1 The restoration of The People’s Restaurant Group Limited (‘the Company’) to the Register of Companies.
1.2 Its winding-up to take effect retrospectively from 24 June 2010.
1.3 The suspension of any limitation period between the date of its dissolution and the date of determination of the Petition for any causes of action the Company or its liquidator may have.’

Judges:

Mr Registrar Jones

Citations:

[2012] EWHC B33 (Ch)

Links:

Bailii

Statutes:

Companies Act 1986, Insolvency Act 1986

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 02 June 2022; Ref: scu.569051

Re a Debtor (No 222 of 1990) ex parte the Bank of Ireland: ChD 1992

Harman J discussed the rules of a creditors’ meeting: ‘In my judgment the scheme of the meeting rules in r 5.17 is quite plainly a simple one. As one would expect the meeting is not the place to go into lengthy debates as to the exact status of a debt, nor is it the time to consider such matters as this court, sitting as the Companies Court, frequently has to consider as such whether a debt is bona fide disputed upon substantial grounds, an issue which leads to a great deal of litigation and frequently takes a day or so to decide. None of that could possibly be a suitable process to be embarked upon at a creditors’ meeting.
The scheme is quite clear. The chairman has power to admit or reject; his decision is subject to appeal; and if in doubt he shall mark the vote as objected to and allow the creditor to vote. That is easily carried out upon the basis advanced by Mr Moss QC, Mr Mann and Mr Trace. It provides a simple clear rule for the chairman, not a lawyer, faced at a large meeting with speedy decisions necessary to be made to enable the meeting to reach a decision. On that basis the chairman must look at the claim; if it is plain or obvious that it is good he admits it, if it is plain or obvious that it is bad he rejects it, if there is a question, a doubt, he shall admit it but mark it as objected.’

Judges:

Harman J

Citations:

[1992] BCLC 137

Jurisdiction:

England and Wales

Cited by:

Cited – AB Agri Ltd v Curtis and Others Misc 22-Jul-2016
(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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 02 June 2022; Ref: scu.567379

Bailey and Another v Angove’s PTY Limited: ChD 2013

The liquidator of the company sought a declaration that sums received by the defendant sales agents on behalf of the insolvent company were to be paid out to the liquidators in full. The court was asked whether the payments by DWL and PLB made after the termination of the ADA were held on trust for Angove or were monies payable to DandD and therefore part of the estate of the insolvent company available for distribution amongst its general creditors.
Held: In the relevant respects the relationship between Angove’s and DandD was that of principal and agent only and not buyer and seller, and that DandD’s authority to collect the price from customers came to an end upon service of Angove’s termination notice.The only contract of sale for the wine that was ordered through DandD was between Angove and (in this case) DWL and PLB
Pelling QC said of the argument that that was insonsistent with the clause in the agreement: ’33. It was submitted on behalf of the Liquidators that because the effect of Clause 22(c) was to impose on the Company the obligation to pay the whole invoice sum due for the goods sold less commission in respect of which a credit note was to be issued for the benefit of the Company that necessarily negatives the true relationship between the Company and Angove being one of principal and agent. I am not able to accept that submission.
First, as I have said, the contract clearly distinguishes between those transactions in respect of which the Company is described as acting as agent and those where it is buying for its own account. It is only in respect of those transactions in respect of which the Company is described as acting as agent that commission is payable and to which the Clause 22 mechanism applies. Clearly therefore the parties considered that the transactions to which this mechanism applied were different from sales to the Company for its own account, which were expressly excluded from its application by Clause 21(a).
Secondly, I do not accept the premise of the submission – namely that because the Company undertakes a direct obligation to pay, that necessarily negatives the relationship being one of principal and agent in relation to transactions to which the mechanism applies. In Teheran – Europe Co. Ltd v. S.T. Belton (Tractors) Ltd [1968] 2 WLR 523, Donaldson J as he then was recognised at 528F that there were three ways in which an agent could conclude a contract on behalf of his principal, the second of which was by creating privity of contract between the third party, the principal and the agent. The outcome of that case was varied on appeal but there was no any disagreement by the Court of Appeal with this part of Donaldson J’s analysis. In the result, it does not follow that because an agent undertakes direct obligations owed to the principal therefore the relationship cannot be one of principal and agent.
I do not accept either the more restricted submission that because the obligation undertaken is one that involves accepting an obligation to pay for the goods that are being sold to the third party that necessarily prevents the relationship from being one of principal and agent. English law has long recognised the concept of a del credere agent – that is an agent who in consideration of a commission guarantees to his principal that third parties with whom he contracts on behalf of the principal will duly pay the sums due under those contracts.
As I have said the ADA must be read as a whole. So read, it applies specifically to at least two types of transaction. It applies primarily to sales to customers identified and introduced by the Company as agent for Angove (in respect of which commission is payable and the Clause 22 mechanism applies) and excepts from this mechanism sales to the Company for its own account. In relation to transactions falling within the last mentioned category the ADA imposes only the limited obligations I mentioned earlier.’

Judges:

Pelling QC HHJ

Citations:

[2013] EWHC 215 (Ch)

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Cited by:

Appeal from – Bailey and Another v Angove’s Pty Ltd CA 7-Mar-2014
The parties disputed the payment out of sums held by the company’s liquidators under an undertaking given by them. Their case was that if DandD (agents for the insolvent company) acted in the relevant respects as agents, their authority to collect . .
At first instance – Bailey and Another v Angove’s Pty Ltd SC 27-Jul-2016
The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Agency

Updated: 02 June 2022; Ref: scu.568645

Halabi v London Borough of Camden: ChD 14 Feb 2008

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 bankruptcy was annulled.
John Jarvis QC said: ‘In this case I consider this is a proper case in which to exercise the discretion to annul the bankruptcy. Of course, annulment is not a matter of right for a bankrupt and it is a matter of discretion. Some of the Registrars have described it as a privilege. That probably is not the best language to use. It is perhaps best described as an indulgence which the court grants to a bankrupt in these circumstances. The factors that the court will take into account in exercising its discretion must embrace whether there is a public interest in allowing annulment. The mere fact that the creditors are content that annulment should take place is never in itself sufficient. If there are cases where there has been gross mismanagement or misconduct, it may be an inappropriate case to grant annulment. The reason for this is that the message which is sent out by the court in annulling a bankruptcy is that there is nothing wrong in the bankrupt’s conduct. The court must always be mindful of that.’
However, the order was not to take effect until the Official Receiver notified the Court that the bankruptcy debt, (and statutory interest on it) was paid. The court did not have jurisdiction to accept the bankrupt’s solicitor’s undertaking for this purpose (as had become practice in some lower courts). Section 282 was explicit; the bankruptcy debts and expenses must have been paid or secured in full before an annulment can be granted: ‘the meaning of ‘paid’ within the context of section 282(1)(b) does not equate to ‘secured by an undertaking’, and further added, ‘the two are simply quite different concepts’.

Judges:

John Jarvis QC

Citations:

[2008] BPIR 370, Times 05-Mar-2008, [2008] EWHC 322 (Ch)

Statutes:

Insolvency Act 1986 282(1)(b), Civil Procedure Rules 40.7, Insolvency Rules 1986 6.211(2)

Jurisdiction:

England and Wales

Citing:

Cited – Peri v Engel ChD 29-Apr-2002
A third party agreed to pay the bankrupt’s debts. He applied for the bankruptcy to be annulled, and for the trustee’s costs to be assessed and fixed at a reasonable level under section 303. The trustee appealed the costs order saying that the . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 02 June 2022; Ref: scu.464383

Japan Leasing (Europe) Plc v Shoa Leasing (Singapore) PTE Ltd: ChD 30 Jul 1999

The court considered a hire purchase agreement for an aircraft between four leasing companies and Olympic Airways. The contract documentation provided for the payment of the price in instalments to designated accounts in various currencies of one of the lessors, Japan Leasing. Japan Leasing was to receive the money on behalf of itself and the other three lessors. Japan Leasing went into administration, and a month later received an instalment into the designated accounts. The issue was whether that money was held in trust to pay their shares to the three other lessors.
Held: The court rejected the primary argument of the three solvent lessors that there was an express trust, but held that the last instalment was held on a constructive trust for the other lessors.

Judges:

Nicholas Warren QC

Citations:

[1999] BPIR 911, [2000] WTLR 301, [1998] EWHC 322 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Wrongy decided – Bailey and Another v Angove’s Pty Ltd SC 27-Jul-2016
The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Trusts

Updated: 02 June 2022; Ref: scu.568651

Neste Oy v Lloyd’s Bank Plc: ChD 1983

A shipping agent (PSL), a client of the defendant, had become insolvent. The defendant sought to combine the accounts. PSL settled on behalf of their shipowner clients bills payable to harbour authorities, pilots, fuel merchants, and other providers of goods and services. The shipowners sometimes put them in funds in advance and sometimes reimbursed them in arrears. The plaintiff shipowners claimed that the unspent balance of six payments made by them to a general account of PSL were held for them in trust. Their primary case was that the payments were subject to an implied trust to pay the money to the suppliers. This arose either by virtue of the agency relationship or as a special purpose (or Quistclose) trust.
Held: The argument was rejected. However, there was a constructive trust of the sixth payment, which had been received after the directors of PSL had concluded that their company was insolvent.
Bingham J approved as ‘in accord with the general principles of equity as applied in England’: ‘the receiving of money which consistently with conscience cannot be retained is, in equity, sufficient to raise a trust in favour of the party for whom or on whose account it was received. This is the governing principle in all such cases. And therefore, whenever any controversy arises, the true question is, not whether money has been received by a party of which he could not have compelled the payment, but whether he can now, with a safe conscience, ex aequo et bono, retain it.’ from Story’s Commentaries on Equity Jurisprudence, 2nd ed.
He applied this to the facts of the case saying: ‘Given the situation of PSL when the last payment was received, any reasonable and honest directors of that company (or the actual directors had they known of it) would, I feel sure, have arranged for the repayment of that sum to the plaintiff’s without hesitation or delay. It would have seemed little short of sharp practice for PSL to take any benefit from the payment, and it would have seemed contrary to any ordinary notion of fairness that the general body of creditors should profit from the accident of a payment made at a time when there was bound to be a total failure of consideration. Of course it is true that insolvency always causes loss and perfect fairness is unattainable. The bank, and other creditors, have their legitimate claims. It nonetheless seems to me that at the time of its receipt PSL could not in good conscience retain this payment and that accordingly a constructive trust is to be inferred.’

Judges:

Bingham J

Citations:

[1983] 2 Lloyds Rep 658

Jurisdiction:

England and Wales

Citing:

Cited – Barclays Bank Ltd v Quistclose Investments Ltd; etc HL 31-Oct-1968
R Ltd were in serious financial difficulties. The company’s overdraft with the appellant bank was almost twice its permitted limit. The company sought a loan of 1 million pounds from a financier, who was willing to lend the company that sum provided . .

Cited by:

Not justified – Bailey and Another v Angove’s Pty Ltd SC 27-Jul-2016
The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Agency, Banking

Updated: 02 June 2022; Ref: scu.568652

Angel Group Ltd v British Gas Trading Ltd: ChD 8 Oct 2012

The court was asked how it should treat a winding up petition based upon a running account between the parties.

Judges:

Norris J

Citations:

[2012] EWHC 2702 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – In Re A Company No.2340 ChD 2001
Blackburne J said: ‘At the end of the day the question is whether or not there is a debt owed by [the Debtor] to [the Creditor] over and above andpound;750, sufficient therefore in amount to support a winding up petition, which is not bona fide . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 02 June 2022; Ref: scu.464723

Re Euromaster Ltd: ChD 10 Aug 2012

‘Whilst it is undoubtedly difficult, if not impossible, precisely to define what is ‘a nullity’ and what is ‘an irregularity’ Parliament may in 2002 be taken to have understood both that there is a difference between the two concepts and that the general policy of the law is to confine the concept of ‘a nullity’ fairly closely.’

Judges:

Norris J

Citations:

[2012] EWHC 2356 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency

Updated: 02 June 2022; Ref: scu.463717

Roberts v Frohlich and Another: ChD 18 Feb 2011

The claimant, liquidator of ODL, sought relief in a declaration that the defendants, former directors of the company, were guilty of misfeasance and breach of duty by causing, procuring or permitting ODL to commence a development when they knew or ought to have known that it was speculative, inadequately funded, and bound to fail. The legal foundation of this head of claim was that they each owed (i) a fiduciary duty to ODL to act in what they honestly believed was in its best interests; (ii) a duty to ODL at common law to exercise reasonable skill and care in acting as directors, and (iii) ‘a duty, at a time when ODL was insolvent or insolvency was reasonably foreseeable, to have regard to the interests of creditors’.

Judges:

Norris J

Citations:

[2011] EWHC 257 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 02 June 2022; Ref: scu.429657

Patel v Jones: CA 24 May 2001

The defendant had been employed as a local government officer, and had accrued pension rights under the statutory scheme. He was made bankrupt, and later made redundant under circumstances triggering payment of the pension. The trustee claimed all or part of the pension.
Held: He was entitled to the basic pension, pension lump sum, and enhanced benefits so far as they were attributable to earnings before the presentation of the petition. The enhanced benefits were property even though discretionary. The trustee was entitled to the benefit of the pension and lump sum. The benefits under such schemes were akin to deferred pay for services, but the pension schemes were not themselves unexecuted contracts for personal services.

Judges:

Lord Justice Aldous, Lord Justice Mummery, Lord Justice Kay

Citations:

Times 29-May-2001, [2001] EWCA Civ 779

Links:

Bailii

Statutes:

Insolvency Act 1986 436, Local Government Superannuation Regulations 1986 (1986 No 24)

Jurisdiction:

England and Wales

Insolvency, Financial Services, Local Government

Updated: 01 June 2022; Ref: scu.160013

Agnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle: PC 5 Jun 2001

(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver was appointed, the charge claimed to be a floating charge, and subject to some limitations, could deal with them freely. The essence of a floating charge is that it is a charge, not on any particular asset, but on a fluctuating body of assets which remain under the control of the chargor. The ability to control the receipt of the asset, and thus take it out of the charge was inconsistent with a fixed charge.
Lord Millett said: ‘Property and its proceeds are clearly different assets. On a sale of goods, the seller exchanges one asset for another.’

Citations:

[2001] 2 AC 710, [2001] UKPC 28, [2001] BCC 259, [2001] 2 BCLC 188, [2001] Lloyd’s Rep Bank 251, [2001] 3 WLR 454

Links:

Bailii, PC

Citing:

Applied – In re Brightlife Ltd ChD 1987
Parties contractual freedom to be respected
A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not . .
Reversed – In Re New Bullas Trading Ltd CA 12-Jan-1994
A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be . .
Questioned – Siebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .
Cited – Street v Mountford HL 6-Mar-1985
When a licence is really a tenancy
The document signed by the occupier stated that she understood that she had been given a licence, and that she understood that she had not been granted a tenancy protected under the Rent Acts. Exclusive occupation was in fact granted.
Held: . .

Cited by:

Cited – National Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Cited – National Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .
Cited – Van Der Merwe and Another v IIG Capital Llc ChD 13-Nov-2007
The parties had entered into a debt factoring agreement, under which repayment was sought of some $30m, and the claimants were said to have guaranteed the loan by the factor to their company. The court was asked whether the guarantors had the same . .
Lists of cited by and citing cases may be incomplete.

Banking, Insolvency, Company, Commonwealth

Updated: 01 June 2022; Ref: scu.159468

Deloitte and Touche Ag v Johnson and Another: PC 10 Jun 1999

(Cayman Islands) The Board was asked whether a debtor or alleged debtor of a company in liquidation can apply for the removal of a liquidator, in whom the creditors and contributors of the company appear to have confidence, on the ground that he is subject to a conflict of interest.
Held: A debtor does not have standing to apply to have a company liquidator removed, even though he might claim a conflict of interest because, for example, he was defendant in an action. Here, the liquidator had the confidence of the creditors and should stay.
Lord Millett said: ‘In their Lordships’ opinion two different kinds of case must be distinguished when considering the question of a party’s standing to make an application to the court. The first occurs when the court is asked to exercise a power conferred on it by statute. In such a case the court must examine the statute to see whether it identifies the category of person who may make the application. This goes to the jurisdiction of the court, for the court has no jurisdiction to exercise a statutory power except on the application of a person qualified by the statute to make it. The second is more general. Where the court is asked to exercise a statutory power or its inherent jurisdiction, it will act only on the application of a party with a sufficient interest to make it. This is not a matter of jurisdiction. It is a matter of judicial restraint. Orders made by the court are coercive. Every order of the court affects the freedom of action of the party against whom it is made and sometimes (as in the present case) of other parties as well. It is, therefore, incumbent on the court to consider not only whether it has jurisdiction to make the order but whether the applicant is a proper person to invoke the jurisdiction.
Where the court is asked to exercise a statutory power, therefore, the applicant must show that he is a person qualified to make the application. But this does not conclude the question. He must also show that he is a proper person to make the application. This does not mean, as the plaintiff submits, that he ‘has an interest in making the application or may be affected by its outcome.’ It means that he has a legitimate interest in the relief sought. Thus even though the statute does not limit the category of person who may make the application, the court will not remove a liquidator of an insolvent company on the application of a contributory who is not also a creditor: see In re Corbenstoke Ltd. (No. 2) [1990] B.C.L.C. 60. This case was criticised by the plaintiff: their Lordships consider that it was correctly decided.
The standing of an applicant cannot therefore be considered separately and without regard to the nature of the relief for which the application is made. Section 106(1) does not limit the category of persons who may make the application. The plaintiff, therefore, does not lack a statutory qualification to invoke the section. But the question remains whether it has a legitimate interest in the relief which it seeks. It is not asking the court to appoint a liquidator to fill a vacancy. It is asking the court to remove incumbent liquidators for cause. The English cases relied upon by the plaintiff show that an interest which is sufficient to support an application of the former kind may not be sufficient to support an application of the latter kind.
The company is insolvent. The liquidation is continuing under the supervision of the court. The only persons who could have any legitimate interest of their own in having the liquidators removed from office as liquidators are the persons entitled to participate in the ultimate distribution of the company’s assets, that is to say the creditors. The liquidators are willing and able to continue to act, and the creditors have taken no step to remove them. The plaintiff is not merely a stranger to the liquidation; its interests are adverse to the liquidation and the interests of the creditors. In their Lordships’ opinion, it has no legitimate interest in the identity of the liquidators, and is not a proper person to invoke the statutory jurisdiction of the court to remove the incumbent office-holders.’

Judges:

Lord Slynn of Hadley, Lord Hope of Craighead, Lord Hobhouse of Woodborough, Lord Millett, Sir John Balcombe

Citations:

Times 16-Jun-1999, [1999] UKPC 25, Appeal No 44 of 1998, [1999] 1 WLR 1605, (1998-99) 1 ITELR 771, [1999] BCC 992, [2000] 1 BCLC 485

Links:

Bailii, PC, PC, PC

Statutes:

Companies Law of Cayman Islands (1995 revision), Insolvency Act 1986 108

Cited by:

Cited – Wood and Another v Mistry ChD 10-Jul-2012
A director’s disqualification order was sought. The order was sought on the basis of allegations of conduct as liquidator of several companies. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Commonwealth

Updated: 01 June 2022; Ref: scu.159358

Kempe Jr and others v Ambassador Insurance Company: PC 19 Nov 1997

(Bermuda)

Citations:

[1997] UKPC 55

Links:

Bailii

Citing:

See Also – Kempe and Another v Ambassador Insurance Company (In Liquidation) (Bermuda) PC 3-Jan-1997
A scheme of arrangement though approved by the court was not itself a court order and could not be extended by the court. . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Insolvency

Updated: 01 June 2022; Ref: scu.159267

Bank of Credit and Commerce Hong Kong Limited v Chairod Mahadumrongkul and others: PC 8 May 1997

(Hong Kong) The Board looked at the effect of the insolvency of Bank of Credit and Commerce Hong Kong Limited on an arrangement by which the bank lent money to four companies upon the terms of a standard facility letter addressed by the bank to the companies on the security of deposits made with the bank by the companies’ principal shareholders.

Judges:

Lord Goff of Chieveley Lord Slynn of Hadley Lord Lloyd of Berwick Lord Nicholls of Birkenhead Lord Hoffmann

Citations:

[1997] UKPC 20

Links:

Bailii

Banking, Insolvency

Updated: 01 June 2022; Ref: scu.159231

Cadogan Estates Limited v McMahon: HL 26 Oct 2000

When a tenancy was terminated and was followed by a statutory tenancy, a term in the contractual tenancy that the tenancy should be forfeit on the tenant’s bankruptcy was continued in and inherited by the statutory tenancy. Though perhaps in conveyancing terms there was no positive obligation not to become bankrupt, the Acts should be interpreted in the context of the legislation as a whole. There was no reason in principle to distinguish between forfeiture for non-payment of rent, and a proviso for re-entry on insolvency.
‘The Rent Acts were enacted in haste and in places badly drafted, and have greatly perplexed judges of the greatest distinction over many decades . . But unless the words used are inconsistent with the policy of the Acts they must be given their natural meaning. Since the proviso for re-entry has no possible application to a statutory tenancy, there is no policy reason to distinguish between a statutory tenancy which follows the determination of a contractual tenancy which contains such a proviso and a statutory tenancy which follows the determination of one which does not. ‘

Judges:

Lord Bingham of Cornhill Lord Steyn Lord Hoffmann Lord Hutton Lord Millett

Citations:

Times 01-Nov-2000, Gazette 09-Nov-2000, Gazette 16-Nov-2000, [2000] 3 WLR 1555, [2000] UKHL 52, [2001] 1 EGLR 47, [2001] BPIR 17, [2001] 1 AC 378, (2001) 81 P and CR DG11, (2001) 33 HLR 42, [2000] 4 All ER 897, [2001] L and TR 2, [2000] NPC 110, [2000] EG 119, [2001] 06 EG 164

Links:

House of Lords, House of Lords, House of Lords, House of Lords, Bailii

Statutes:

Rent Act 1977

Jurisdiction:

England and Wales

Citing:

Appeal from – Cadogan Estates Ltd v McMahon CA 9-Jun-1999
A provision in a tenancy agreement that the tenancy would cease upon the bankruptcy of the tenant, continued and became part of the terms of a statutory tenancy following the contractual one. The provision was not inconsistent with the idea of the . .
Cited – In re Drew (A Bankrupt) 1929
(Ireland) A tenant subject to a re-entry clause in his tenancy agreement in the case of his being made bankrupt, and who had gone bankrupt had broken an obligation of his tenancy. He was not protected from an order for possession. ‘The tenant here . .
Cited – RMR Housing Society Ltd v Combs 1951
The court considered it unnecessary to distinguish between terms and conditions of a tenancy forfeiting the tenancy on the insolvency of the tenant as to the result or effect for their breach. . .
Cited – Paterson v Aggio CA 1987
The Court considered whether a tenancy was a ‘protected shorthold tenancy’ within the meaning of section 52 of the Housing Act 1980 and therefore excluded from the protection of the Rent Act 1977.
Held: A power to forfeit within the minimum . .
Cited – Halliard Property Co Ltd v Jack Segal Ltd 1978
The court considered a proviso for re-entry that: ‘forfeiture on the bankruptcy of the lessee is considered as a case of breach of condition.’
Held: It was clearly a condition rather than a mere covenant of the original protected tenancy that . .
Cited – Read v Goater 1921
As to the Rent Acts, it was essential ‘that, wherever possible, [they] should be construed in a broad, practical, common-sense manner so as to effect the intention of the Legislature’ . .
Cited – Remon v City of London Real Property Co Ltd CA 1921
The court was asked whether the plaintiff, a tenant of rooms to which (once enacted) the Act of 1920 applied and who had been excluded from possession by the landlord’s re-entry on the day that the Act came into force following service of a notice . .
Cited – Brewer v Jacobs 1923
A proviso for re-entry in a tenancy is inapplicable to a statutory tenancy. It is concerned with the forfeiture of an existing term and can have no application after the contractual term has expired. Once the statutory tenancy has come into being, . .
Cited – Roe v Russell CA 1928
Sargant LJ said that the Rent Acts had ‘not been framed with any scientific accuracy of language.’ . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Housing, Insolvency

Updated: 31 May 2022; Ref: scu.159086

Soden and Another v British and Commonwealth Holdings Plc and others: HL 16 Oct 1997

A court assessing the claims of members in a liquidation should distinguish between claims made qua members and others. Sums due to a member of company ranked as such if cause of action based on the statutory contract between company and members

Citations:

Gazette 29-Oct-1997, Times 22-Oct-1997, Gazette 14-Jan-1998, [1997] UKHL 41; [1998] AC 298; [1997] 4 All ER 353; [1997] 3 WLR 840

Links:

House of Lords, Bailii

Statutes:

Companies Act 1985 14(1)

Jurisdiction:

England and Wales

Insolvency

Updated: 31 May 2022; Ref: scu.158916

In the Matter of Hawk Insurance Company Limited: CA 23 Feb 2001

Arrangements for putting in place voluntary arrangements for companies. Discussing Sovereign Insurance: ‘When applying Bowen LJ’s test to the question ‘are the rights of those who are to be affected by the scheme proposed such that the scheme can be seen as single arrangement; or ought it to be regarded, on a true analysis, as a number of linked arrangements?’ it is necessary to ensure not only that those whose rights really are so dissimilar that they cannot consult together with a view to a common interest should be treated as parties to distinct arrangements – so that they should have their own separate meetings – but also that those whose rights are sufficiently similar to the rights of others that they can properly consult together should be required to do so; lest by ordering separate meetings the court gives a veto to a minority group. The safeguard against majority oppression, as I sought to point out in the BTR case ([2001] 1 BCLC 740 at 747) is that the court is not bound by the decision of the meeting. It is important Bowen LJ’s test should not be applied in such a way that it becomes an instrument of oppression by a minority. ‘

Judges:

Chadwick LJ, Pill LJ

Citations:

[2001] EWCA Civ 241, [2001] 2 BCLC 480

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Sovereign Life Assurance v Dodd 1892
‘What is the proper construction of that statute? It makes the majority of the creditors or of a class of creditors bind the minority: it exercises a most formidable compulsion upon dissentient, or would-be dissentient, creditors; and it therefore . .

Cited by:

Cited – In re Telewest Communications Plc ChD 26-Apr-2004
A scheme of arrangement had been proposed. The creditor complained that in providing for payment in a currency other than that agreed, it had been prejudiced.
Held: The provision in the scheme did purport to alter the claimant’s rights. . .
Cited – In the Matter of Drax Holdings Limited and in the Matter of InPower Limited ChD 17-Nov-2003
A company incorporated in Jersey comes within the Act for the purposes of the section. An English court has jurisdiction to wind up a foreign company if it has assets here or some other sufficient connection with this country. . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 31 May 2022; Ref: scu.147449

Buhr v Barclays Bank plc: CA 26 Jan 2001

The bank took a second charge over property, but failed to get it registered. The chargors fell into debt and bankruptcy, and the property was sold. The proceeds were used to discharge the first charge, and then repay unsecured creditors. The bank claimed the money had been received on constructive trust.
Held: The court confirmed that the failure to register the charge only voided it as against the purchaser. When the bank’s security was destroyed, a security interest was created automatically in the asset which replaced it. The sale by the husband and wife was not authorised by the bank, and the judge had concluded correctly.
Arden LJ stated: ‘if . . the mortgagor makes a disposition of the mortgaged property in a manner which destroys the mortgagee(s estate in the mortgaged property, a security interest in the property which represents the mortgaged property automatically and as a matter of law comes into existence as from the moment that the mortgagor becomes entitled to their property.’

Judges:

Woolf LCJ, Tuckey, Arden LJJ

Citations:

Gazette 09-Aug-2001, [2001] EWCA Civ 1223, [2002] 1 P and CR DG7, [2002] BPIR 25, [2001] 31 EGCS 103, [2001] NPC 124

Links:

Bailii

Statutes:

Law of Property Act 1925 63

Jurisdiction:

England and Wales

Citing:

Cited – Banner v Berridge 1881
. .
Cited – Charles v Jones 1887
. .
Cited – The Benwell Tower 1895
. .
Cited – Raffelsen Zentralbank Osterreich Ag v Five Star General Trading Llc and Others CA 1-Mar-2001
An assigned marine insurance policy was subject to a claim. The issue was the ability of an assignee to claim as a claim in contract where the proper law was that under which the contract was made, or a claim of an intangible right to claim against . .

Cited by:

Cited – Wight, Pilling, Mackey v Eckhardt Marine GmbH PC 14-May-2003
(Cayman Islands) An international bank went into liquidation in the Cayman Islands, with liabilities in Bangladesh. A new bank was created in Bangladesh, and the applicants sought to make the new bank liable, and through them the liquidators.
Cited – Menelaou v Bank of Cyprus Plc ChD 19-Jul-2012
On the sale of the claimant’s property, the solicitors received agreement by the defendant bank to the release of their charge over the property for a certainsum, being less than the loan outstanding. In the course of discharging the loan, a bank . .
Cited – Bank of Cyprus UK Ltd v Menelaou SC 4-Nov-2015
The bank customers, now appellants, redeemed a mortgage over their property, and the property was transferred to family members, who in turn borrowed from the same lender. A bank employee simply changed the name on the mortgage. This was ineffective . .
Lists of cited by and citing cases may be incomplete.

Land, Trusts, Insolvency

Updated: 31 May 2022; Ref: scu.147410

Lewis v Commissioner of Inland Revenue and others: CA 2 Nov 2000

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. There was no automatic priority of such expenses over preferential creditors, and the liquidator must look to the court’s discretion to recover any such costs.’Rule 4.218 tells us both what are the expenses to be treated as the expenses of a winding up and what priority they have inter se.’

Judges:

Peter Gibson LJ

Citations:

Gazette 30-Nov-2000, [2000] EWCA Civ 274, [2001] 3 All ER 499

Links:

Bailii

Statutes:

Insolvency Act 1986, Insolvency Rules 1986 (SI 1986 No 1925) 4.218(1) 4.220(1)

Jurisdiction:

England and Wales

Cited by:

Cited – Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Costs

Updated: 31 May 2022; Ref: scu.147307

Pollard and Another v Ashurst: CA 21 Nov 2000

An English court did have power to order the sale of property in Portugal owned by the bankrupt and his wife in their joint names. The estate of the bankrupt vested in the trustee automatically and withoutmore on the bankruptcy. This could not change land registers in Portugal. For such registers the country involved had exclusive jurisdiction. Nevertheless, the instant case involved no investigation of facts or law in Portugal, and it was appropriate to order that the bankrupt execute documents to transfer the property and hold it in trust for the trustee in bankruptcy until transferred.

Citations:

Gazette 18-Jan-2001, Times 29-Nov-2000, [2000] EWCA Civ 291

Links:

Bailii

Statutes:

Civil Jurisdiction and Judgments Act 1982

Jurisdiction:

England and Wales

Insolvency, Land, International

Updated: 31 May 2022; Ref: scu.147324

Bank of Ireland v Hollicourt (Contracts) Limited: CA 20 Oct 2000

A bank continued to pay on cheques presented to it against the company’s bank account even after the presentation of a petition for bankruptcy. The liquidator sought recovery of the amounts paid from the bank as well as the payees. It was held that the legislation made the disposition void, but that did not operate in the way claimed. The company had already by making out the cheques ordered its bank as agent to pay on them, and the bank had no beneficial interest it could dispose of. These need not be affected by whether the account was in credit. The automatic retrospective avoidance was limited by the terms of the section its purpose.

Citations:

Times 01-Nov-2000, Gazette 23-Nov-2000, [2000] EWCA Civ 263

Links:

Bailii

Statutes:

Insolvency Act 1986 127

Jurisdiction:

England and Wales

Citing:

Appeal from – Hollicourt (Contracts) Ltd (In Liquidation) v Bank of Ireland ChD 17-Dec-1999
A company’s account was in credit at all times, but was, unknown to the bank, in winding up proceedings. The bank continued to honour cheques, and was found to have been making dispositions of the company’s assets under the section. Accordingly the . .

Cited by:

Appealed to – Hollicourt (Contracts) Ltd (In Liquidation) v Bank of Ireland ChD 17-Dec-1999
A company’s account was in credit at all times, but was, unknown to the bank, in winding up proceedings. The bank continued to honour cheques, and was found to have been making dispositions of the company’s assets under the section. Accordingly the . .
Cited – Rose v AIB Group (UK) plc and Another ChD 9-Jun-2003
The bank had received and paid substantial sums from the company before the petition for insolvency had been presented, and had discharged the director’s charge on his house. The liquidator sought restitution under the Act. The bank replied that it . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 31 May 2022; Ref: scu.147296

Commissioners of Inland Revenue v Kahn and Another: CA 23 Mar 2000

Appeal against an order of Mr Justice Evans-Lombe on an application made pursuant to section 112(1) of the Insolvency Act 1986 by the joint liquidators of Toshoku Finance UK Plc (‘the Company’) for directions in relation to the discharge of an alleged liability to corporation tax on interest receivable after the commencement of the winding up.

Citations:

[2000] EWCA Civ 86

Links:

Bailii

Statutes:

Insolvency Act 1986 112(1)

Jurisdiction:

England and Wales

Corporation Tax, Insolvency

Updated: 31 May 2022; Ref: scu.147119

Mahomed and Another v Morris and Others: CA 17 Feb 2000

Citations:

[2000] EWCA Civ 46

Links:

Bailii

Statutes:

Insolvency Act 1986 168(5)

Jurisdiction:

England and Wales

Citing:

Cited – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman CA 21-May-1996
The company was in liquidation. Terence Venables, who had owned the shares, had taken an assignment of a cause of action against the football club. The court had set aside that assignment, and removed the liquidator. Venables now appealed saying . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 31 May 2022; Ref: scu.147079

Environment Agency v Paul Clark (As Administrator of Rhondda Waste Disposal Limited): CA 10 Feb 2000

A waste disposal company was in insolvent administration. The Environment Agency sought to prosecute it for breaches of criminal law relating to its licenses.
Held: The bar on proceedings against a company in administration operated for criminal as well as civil proceedings. The section was intended to allow the company a breathing space. Nevertheless, a prosecution could be brought with leave.

Citations:

Times 02-Mar-2000, [2000] EWCA Civ 38

Links:

Bailii

Statutes:

Insolvency Act 1986 10

Jurisdiction:

England and Wales

Insolvency, Company, Environment

Updated: 31 May 2022; Ref: scu.147071

Official Receiver As Liquidator of Celtic Extraction Ltd and Bluestone Chemicals Ltd v Environmental Agency: CA 14 Jul 1999

A waste management licence is ‘property’ for the purposes of the Act.

Citations:

[1999] EWCA Civ 1835, [2001] Ch 475

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 31 May 2022; Ref: scu.146750

Mond v Hyde and Another: CA 16 Jul 1998

The Court was asked whether an Official Receiver in Bankruptcy is, on grounds of public policy, immune from an action for damages at the suit of the trustee who has suffered financial loss by relying upon a negligent statement made to him by the Official Receiver in the course of the bankruptcy proceedings.

Judges:

Beldam, Aldous, Ward LJJ

Citations:

[1998] 3 All ER 833, [1998] EWCA Civ 1226

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Negligence

Updated: 30 May 2022; Ref: scu.144705

Polly Peck International Plc v The Marangos Hotel Company Ltd and Others: CA 7 May 1998

Leave had been given for the insolvent plaintiff company to bring proceedings. The defendant now challenged that leave.
Held: A claim that a massively insolvent company had wrongfully occupied Turkish Cypriot property would not allow a claim of remedial constructive trust against assets held by liquidator here. A so-called ‘remedial constructive trust’ is not known in English law. Mummery LJ pointed to the lack of any material distinction between compulsory winding up and administration.

Judges:

Nourse LJ, Potter LJ, Mummery LJ

Citations:

Times 18-May-1998, [1998] EWCA Civ 789, [1998] 3 All ER 812, [1998] 2 BCLC 185

Links:

Bailii

Statutes:

Insolvency Act 1986 11(3)

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Cited – Harms Offshore AHT Taurus Gmbh and Co KG v Bloom and Others CA 26-Jun-2009
The court had granted to the liquidators of a company a mandatory injunction requiring the appellant German companies to attempt to obtain the release of assets from attachment by the court in new York.
Held: The appeal was dismissed. The . .
Lists of cited by and citing cases may be incomplete.

Trusts, Insolvency

Updated: 30 May 2022; Ref: scu.144267

In re Buckingham International Plc and In the Matter of Insolvency Act 1986; Mitchell v Buckingham International Plc: CA 16 Feb 1998

Citations:

[1998] EWCA Civ 247

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

Cited – Roberts Petroleum Ltd v Bernard Kenny Ltd HL 2-Jan-1983
The plaintiff supplied petrol to the defendant but had not been paid. Anticipating the defendant winding up, the plaintiff got judgment and a charging order nisi. The defendant appealed against that order being made absolute, saying that this gave . .
Cited – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman CA 21-May-1996
The company was in liquidation. Terence Venables, who had owned the shares, had taken an assignment of a cause of action against the football club. The court had set aside that assignment, and removed the liquidator. Venables now appealed saying . .
Appeal from – In Re Buckingham International Plc ChD 20-Nov-1997
There is no power in the court to make any arrangement which will result in the preference of one set of creditors over others of the same class. . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 29 May 2022; Ref: scu.143725

Re Adam Eyton Ltd: CA 7 Jul 1887

In considering the removal of a liquidator, the court referred to the John Moore Gold case: ‘In my opinion, although of course unfitness discovered in a particular person would be a ground for removing him, yet the power of removal is not confined to that, and I do not think that the late Master of the Rolls in the case of In re Sir John Moore Gold Mining Company ((1879) 12 ChD 325 at 331), which has been cited, intended to give an exhaustive definition.’ (Cotton LJ). It is not necessary in order to justify the court under the section in removing the liquidator that there should be anything against the individual. However, in this case the liquidator: ‘may consider that the judgment of this Court is not based in any way on the possibility of any reflection upon himself, either in his conduct in this matter or in his general fitness to be a liquidator of any honourable company in the kingdom – his character is clear.’ and ‘In many cases, no doubt, and very likely, for anything I know in most cases, unfitness of the liquidator will be the general form which the cause will take upon which the Court in this class of case acts, but that is not the definition of due cause shewn. In order to define ‘due cause shewn’ you must look wider afield, and see what is the purpose for which the liquidator is appointed. To my mind the Lord Justice has correctly intimated that the due cause is to be measured by reference to the real, substantial, honest interests of the liquidation, and to the purpose for which the liquidator is appointed. Of course, fair play to the liquidator himself is not to be left out of sight, but the measure of due cause is the substantial and real interest of the liquidation.’ (Bowen LJ)

Judges:

Cotton LJ, Bowen LJ

Citations:

(1887) 36 Ch D 299, [1887] UKLawRpCh 148, (1887) 57 LJCh 127

Links:

Commonlii

Statutes:

Companies Act 1882 93 141

Jurisdiction:

England and Wales

Citing:

Cited – Re Sir John Moore Gold Mining Co CA 1879
The court considered an appeal against an order removing the liquidator: ‘I should say that, as a general rule, [the words ‘on cause shown’] point to some unfitness of the person – it may be from personal character, or from his connection with other . .

Cited by:

Cited – In re Keypak Homecare Ltd ChD 1987
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: ‘The section authorises the court to remove the liquidator ‘on cause shown’. That is not the same as saying ‘if the court shall . .
Approved – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 29 May 2022; Ref: scu.215940

Re Sir John Moore Gold Mining Co: CA 1879

The court considered an appeal against an order removing the liquidator: ‘I should say that, as a general rule, [the words ‘on cause shown’] point to some unfitness of the person – it may be from personal character, or from his connection with other parties, or from circumstances in which he is mixed up – some unfitness in a wide sense of the term’ but this was not necessary to the decision.

Judges:

Jessel MR

Citations:

(1879) 12 Ch D 325

Jurisdiction:

England and Wales

Cited by:

Cited – Re Adam Eyton Ltd CA 7-Jul-1887
In considering the removal of a liquidator, the court referred to the John Moore Gold case: ‘In my opinion, although of course unfitness discovered in a particular person would be a ground for removing him, yet the power of removal is not confined . .
Cited – In re Keypak Homecare Ltd ChD 1987
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: ‘The section authorises the court to remove the liquidator ‘on cause shown’. That is not the same as saying ‘if the court shall . .
Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 29 May 2022; Ref: scu.215939

Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited): ChD 25 Aug 2004

Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. Other creditors should be able to see that there is a proper investigation of relevant matters relating to inter-company transfers, and the matter should be allowed to proceed. The liquidators had acted in a surprising way in a tactical battle with the applicants, whose loss of confidence in the liquidators was understandable. Proceedings for disqualification orders had been discontinued, but the liquidators persisted in their assertion of an unlawful preference. The costs unreasonably incurred by the liquidators had swallowed all the assets. The liquidators should be removed.

Judges:

Etherton, The Honourable Mr Justice Etherton

Citations:

[2004] EWHC 2443 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – In re Keypak Homecare Ltd ChD 1987
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: ‘The section authorises the court to remove the liquidator ‘on cause shown’. That is not the same as saying ‘if the court shall . .
Cited – Buchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
Cited – Siebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
Cited – Agnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle PC 5-Jun-2001
(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver . .
Cited – In re Brightlife Ltd ChD 1987
Parties contractual freedom to be respected
A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not . .
Cited – In Re Keenan Bros Ltd 1986
(Supreme Court of the Republic of Ireland) A debenture conferred a fixed charge on book debts. It specifically provided that withdrawals from the account to which the proceeds of the book debts had to be credited might only be made with the prior . .
Cited – Re Ledingham-Smith ChD 1993
The bankrupt’s accountants had been paid their fees by standing order. Arrears mounted and the sum was increased. On the bankruptcy, the trustee sought to recover the increased payment. The court considered whether they had been given a preference. . .
Cited – Farah and Others v Home Office, British Airways Plc and Another CA 6-Dec-1999
The applicants claimed in negligence against the Home Office after its advisers had wrongly advised the first defendants that the claimants’ travel documents were not valid. The claim was struck out, and the claimants appealed. The strike out was . .
Cited – Re Continental Assurance Co of London plc (No.2) 1988
Directors of a company in creditors’ voluntary liquidation sought to strike out an application by the liquidators seeking relief against them for wrongful trading and breach of fiduciary duty. They asserted that the liquidators’ application was . .
Cited – Re Bullard and Taplin Ltd ChD 1996
Tne question of whether there was at any time ‘pending court proceedings’ was answered by asking if there existed a court file. The section empowered a court itself to appoint another trustee in bankruptcy. Section 41 of the 1984 Act could be used . .
Cited – Marseilles Extension Rly and Land Co 1867
The court considered the circumstances when a liquidator could be removed. The words ‘due cause’ did not require anything amounting to misconduct or personal unfitness. It was sufficient if it could be shown that it was on the whole desirable that a . .
Approved – Re Adam Eyton Ltd CA 7-Jul-1887
In considering the removal of a liquidator, the court referred to the John Moore Gold case: ‘In my opinion, although of course unfitness discovered in a particular person would be a ground for removing him, yet the power of removal is not confined . .
Cited – Re Sir John Moore Gold Mining Co CA 1879
The court considered an appeal against an order removing the liquidator: ‘I should say that, as a general rule, [the words ‘on cause shown’] point to some unfitness of the person – it may be from personal character, or from his connection with other . .
Cited – Shepheard v Lamey ChD 2001
An application was made for the removal of a liquidator: ‘After all, all that one has to find is some good cause why a person should not continue as a liquidator. You do not have to prove everything in sight; you do not have to prove, for example, . .
Cited – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman CA 21-May-1996
The company was in liquidation. Terence Venables, who had owned the shares, had taken an assignment of a cause of action against the football club. The court had set aside that assignment, and removed the liquidator. Venables now appealed saying . .
Cited – AMP Enterprises Ltd v Hoffman and Another ChD 25-Jul-2002
A creditor sought an order to replace the company liquidator.
Held: Such orders were discretionary, but courts should not grant them too readily. It was for the applicant to show good reason for the order. The circumstances would vary widely, . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 29 May 2022; Ref: scu.200507

In re Keypak Homecare Ltd: ChD 1987

The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: ‘The section authorises the court to remove the liquidator ‘on cause shown’. That is not the same as saying ‘if the court shall think fit’. There is a burden on the applicant to show why the liquidator should be removed.’ However, the words of the statute are very wide, and it would be dangerous and wrong for a court to seek to limit or define the kind of cause required; and it may be appropriate to remove a liquidator even though nothing can be said against him, either personally or in his conduct of the particular liquidation.

Judges:

Millett J

Citations:

[1987] BCLC 409

Statutes:

Insolvency Act 1986 108

Jurisdiction:

England and Wales

Citing:

Cited – Re Adam Eyton Ltd CA 7-Jul-1887
In considering the removal of a liquidator, the court referred to the John Moore Gold case: ‘In my opinion, although of course unfitness discovered in a particular person would be a ground for removing him, yet the power of removal is not confined . .
Cited – Marseilles Extension Rly and Land Co 1867
The court considered the circumstances when a liquidator could be removed. The words ‘due cause’ did not require anything amounting to misconduct or personal unfitness. It was sufficient if it could be shown that it was on the whole desirable that a . .
Cited – Re Sir John Moore Gold Mining Co CA 1879
The court considered an appeal against an order removing the liquidator: ‘I should say that, as a general rule, [the words ‘on cause shown’] point to some unfitness of the person – it may be from personal character, or from his connection with other . .

Cited by:

Followed – AMP Enterprises Ltd v Hoffman and Another ChD 25-Jul-2002
A creditor sought an order to replace the company liquidator.
Held: Such orders were discretionary, but courts should not grant them too readily. It was for the applicant to show good reason for the order. The circumstances would vary widely, . .
Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Approved – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman CA 21-May-1996
The company was in liquidation. Terence Venables, who had owned the shares, had taken an assignment of a cause of action against the football club. The court had set aside that assignment, and removed the liquidator. Venables now appealed saying . .
Applied – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman ChD 1-Nov-1994
The company Edennote had been wound up on insolvency. It had a possible claim for fees against Tottenham, owned by Mr Sugare. The shareholder, Terry Venables, took an assignment of that action. An application was made to set aside the assignment and . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 29 May 2022; Ref: scu.182075

Rogers and Another v Rhys Evans (a Firm) and Others: Admn 30 Mar 2000

The claimant appealed a striking out of his action for professional negligence against the defendant firm of solicitors. He had obtained judgment by default, but had been shown not properly to have served proceedings. He was also a bankrupt at the relevant time and unable to commence the actions. It was then decided that the action was an abuse of process in that the claimant had not proceeded. Striking out an action where there has been a default judgment is a Draconian power and should only be granted in a strong case. In this case, because of the several complications, the delay was not inexcusable. Appeal allowed

Citations:

[2000] EWHC Admin 312

Links:

Bailii

Insolvency, Litigation Practice

Updated: 29 May 2022; Ref: scu.140126

Re Tand N Ltd and Others: ChD 21 Oct 2004

Judges:

Mr Justice Richards

Citations:

[2004] EWHC 2361 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

See Also – T and N Limited, Associated Companies of T and N Ltd (In Administration) v Royal and Sun Alliance Plc, and others ChD 9-May-2003
T and N had exposure to asbestosis claims; these claims were insured by Lloyd’s but on terms that if payments were to be made, T and N should make certain reimbursements to Lloyd’s. T and N then insured with a captive company known as Curzon their . .

Cited by:

See Also – Alexander Forbes Trustee Services Limited and Another v Jackson and Others ChD 2-Nov-2004
. .
See Also – Freakley, Gleave, Squires, T&N Limited v Centre Reinsurance International Company, Muenchener Rueckversicherungs-Gesellschaft, European International Reinsurance Company Limited, Curzon Insurance Limited ChD 26-Nov-2004
. .
See Also – T and N Ltd and Others, Re the Insolvency Act 1986 (Communications) ChD 8-Dec-2004
. .
See Also – In re T and N Ltd and Others, Re Insolvency Act 1986 ChD 14-Dec-2005
The court considered the case of Glenister and similar and said: ‘I accept the submission that these cases are not in point to the issue as regards future asbestos claims. There is no element of discretion as regards such claims. If the ingredients . .
See Also – T and N Ltd and Others, In the Matter of the Insolvency Act 1986 ChD 21-Dec-2005
. .
See Also – T and N Ltd and others v In the Matter of the Insolvency Act 1986 (Conflict of Law) ChD 21-Dec-2005
. .
See Also – In the Matter of T and N Limited and others ChD 12-Apr-2006
. .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 28 May 2022; Ref: scu.218876

Hill (As Trustee In Bankruptcy of Nurkowski) v Spread Trustee Company Ltd and Another: CA 12 May 2006

The defendants sought relief for transactions entered into at an undervalue. The bankrupt had entered into charges and an assignment of a loan account in their favour before his bankruptcy, and the trustee had obtained an order for them to be set aside as a fraud on his creditors.
Held: To have such orders set aside, it must be shown that the transaction had been entered into in order to prejudice the creditors. The court had disbelieved the debtor, but there was no need for the judge to give himself an express Lucas direction, so long as one was applied. ‘There is no general rule that an action brought by a trustee in bankruptcy is not subject to the provisions of the Limitation Act 1980, and I can see no justification for there to be an exception in the case of a claim brought under s.423. ‘

Judges:

Lord Justice Waller Lady Justice Arden

Citations:

Times 10-Jul-2006, [2006] EWCA Civ 542, [2007] 1 BCLC 450, [2007] 1 WLR 2404

Links:

Bailii

Statutes:

Insolvency Act 1986 423

Jurisdiction:

England and Wales

Citing:

Appeal from – Hill (As Trustee In Bankruptcy of Nurkowski) v Spread Trustee Company Ltd and Another ChD 2005
. .
Cited – Carman v Yates ChD 2005
When a civil judge thinks a witness may be lying, he should remember that witnesses may have different reasons for lying, and effectively give himself a Lucas direction. . .
Cited – Regina v Lucas (Ruth) CACD 1981
People sometimes tell lies for reasons other than a belief that they are necessary to conceal guilt.
Four conditions were identified which must be satisfied before a defendant’s lie could be seen as supporting the prosecution case:-
(1) . .
Cited – Regina v Middleton CACD 12-Apr-2000
Where a defendant was shown to have lied in the course of proceedings it need not always be necessary to give a Lucas direction. In some circumstances the jury could properly be expected not to follow a prohibited line of reasoning without such a . .
Cited – Peter Buchanan Limited and Macharg v McVey 1954
(Supreme Court of Ireland) The plaintiff was a company registered in Scotland put into compulsory liquidation by the revenue under a substantial claim for excess profits tax and income tax. The liquidator was really a nominee of the revenue. The . .
Cited – Re Sam Weller and Sons Ltd 1990
. .
Cited – In re M C Bacon Ltd ChD 1990
A liquidator claimed that the costs of an unsuccessful attempt to set a floating charge aside should be paid out of the assets subject to the charge in priority to the claims of the charge holder.
Held: The rule was a complete statement of the . .
Cited – Law Society v Southall CA 14-Dec-2001
In making a strike out decision under Part 24, the court of first instance was exercising a discretion which an appellate court should be reluctant to disturb. The court should only interfere in the case of a manifest error. The Law Society had . .
Cited – Re Maddever 1884
A specialty creditor who applied to set aside a conveyance as fraudulent under the statute 13 Eliz. c.5 was not barred by laches and could be brought at any time before his own claim as a creditor became statute-barred. . .
Cited – Buchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
Cited – Coburn v Colledge CA 5-Apr-1897
A solicitor commenced an action on June 12th, 1896 for his fees for work which had been completed on May 30th 1889.
Held: A period of limitation runs from the date on which the ingredients of the cause of action are complete. The statute of . .
Cited – Inland Revenue v Hashmi and Another CA 3-May-2002
The question for the court was whether when there was more than one purpose of a transaction the proscribed purpose under the section had to be dominant or not.
Held: It was not necessary for the proscribed purpose to be the dominant purpose; . .
Cited – Re Priory Garage (Walthamstow) Limited ChD 2001
The court considered the relevance of a statutory limitation period in relation to applications to set aside transactions as being at an undervalue or as voidable preferences under section 238 to 241 of the 1986 Act. Applications to set aside . .
Cited – Re Lane-Fox 1900
. .
Cited – Re Farmizer (Products) Ltd ChD 19-Jun-1995
The limitation period for an action for wrongful trading under insolvency legislation is six years. Where the statute relied upon enables the court to give relief in monetary or non-monetary form the court should look to see what is actually claimed . .
Cited – Menzies v National Bank of Kuwait Sak CA 13-Dec-1993
It must only in exceptional circumstances that a company other than company in liquidation may be alloweed to pursue a debt for the company. . .
Cited – Aylott v West Ham Corporation CA 1927
The plaintiff sought to recover a sum of money under a statute. . .
Cited – Collin v Duke of Westminster CA 1985
In 1975 the tenant sought to exercise his right to purchase the freehold reversion of his property. The landlord argued that the rent payable precluded any such entitlement. Under the law as then understood, the landlord’s contention appeared . .
Cited – Pratt v Cook, Son and Co (St Paul’s) Ltd HL 1940
. .
Cited – Cotterill v Price 1960
A statute-barred debt cannot be proved in bankruptcy. . .
Cited – Cunliffe v Goodman CA 1950
Action for damages for breach of a repairing covenant on the expiry of a lease. The court looked at the intention required of a landlord to show an intended purpose to oppose renewal of a lease. Asquith LJ said: ‘An ‘intention’ to my mind connotes a . .
Cited – West Riding of Yorkshire County Council v Huddersfield Corporation 1957
Where a statute enables the court to give relief in monetary or non-monetary form the court should look to see what is actually claimed. . .
Cited – Re Eichholz 1959
The court left open the question whether, if the proceedings were brought by a trustee in bankruptcy, a representative creditor had to be joined. . .
Cited – Letang v Cooper CA 15-Jun-1964
The plaintiff, injured in an accident, pleaded trespass to the person, which was not a breach of duty within the proviso to the section, in order to achieve the advantages of a six-year limitation period.
Held: Trespass is strictly speaking . .
Cited – Re Yates (A Bankrupt) 2004
The court considered the application of the limitation to a claim by a trustee in bankruptcy to set aside a transaction at an undervalue.
Held: Charles J: ‘If there is a limitation period, the passages in Muir Hunter suggest that in the case . .

Cited by:

Cited – Barlow Clowes International Ltd and Others v Henwood CA 23-May-2008
The receiver appealed against an order finding that the debtor petitioner was not domiciled here when the order was made. The debtor had a domicile of origin in England, but later acquired on in the Isle of Man. He then acquired a home in Mauritius . .
Cited – Nolan v Wright ChD 26-Feb-2009
The defendant sought to re-open the question of whether the charge under which he might otherwise be liable was an extortionate credit bargain. The creditor said that that plea was time barred. The defendant argued that a finding that the agreement . .
Cited – Stonham v Ramrattan and Another CA 16-Feb-2011
The bankrupt, while solvent had acquired a property which was first put in his own sole name, but then transferred to his wife outwardly ‘in consideration of love and affection’. Several years later, on the bankruptcy, the trustee sought to have the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Litigation Practice

Leading Case

Updated: 27 May 2022; Ref: scu.241911

Ogdens Ltd v Weinberg: HL 26 Jul 1906

The trustee of a bankrupt trader assigned to a third party the goodwill of a bankrupt’s business, ‘and also all the book and other debts, securities, credits, effects, contracts, and engagements belonging or appertaining to the said business to which the vendor as such trustee is entitled.’ At the time of his bankruptcy the trader was in a position to bring an action of damages for breach of contract against a wholesale firm which had undertaken to divide a certain bonus and profits among its customers for a number of years, but had put it out of its power to fulfil its contract by going into voluntary liquidation and selling its business.
Held that the contract and right to sue upon it were conveyed by the assignation.

Judges:

Lord Chancellor (Loreburn), Lords Davey, James of Hereford, and Robertson

Citations:

[1906] UKHL 618, 44 SLR 618

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Contract

Updated: 26 May 2022; Ref: scu.625467

Seear v Lawson: CA 1880

‘If the trustee gets a right of action, why is he not to realise it? The proper office of the trustee is to realise the property for the sake of distributing the proceeds among the creditors. Why should we hold as a matter of policy that it is necessary for him to sue in his own name? He may have no funds, or he may be disinclined to run the risk of having to pay costs, or he may consider it undesirable to delay the winding up of the bankruptcy until the end of the litigation.’

Judges:

Sir George Jessel MR

Citations:

[1880] 15 ChD 426

Jurisdiction:

England and Wales

Cited by:

Cited – Norglen Ltd (In Liquidation) v Reeds Rains Prudential Ltd and Others; Circuit Systems Ltd (In Liquidation) and Another v Zuken-Redac HL 1-Dec-1997
An assignment of a cause of action by a company in liquidation was valid, even though the dominant purpose was to avoid having to give security for costs, and to get legal aid. In dismissing the argument that the transactions were a device to defeat . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Litigation Practice

Updated: 26 May 2022; Ref: scu.223195

Somji v Cadbury Schweppes Plc: CA 20 Dec 2000

Where a party’s agreement to an individual voluntary arrangement had been obtained by an advantage offered to that creditor but not disclosed to others, the entire arrangement could be set aside. In this case the offer to purchase a debt after the arrangement was not an ordinary dealing in distressed debt. There was a duty of openness and good faith. The test was whether it would be likely to have made a material difference to the way in which the creditors would have seen the proposal. Cases from before the 1986 legislation could be referred to but with care.

Judges:

Judge, Walker LJJ, Sir Christopher Staughton

Citations:

Gazette 22-Feb-2001, Times 16-Jan-2001, [2000] EWCA Civ 340, [2001] 1 WLR 615, [2001] 1 BCLC 498

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Cited by:

Cited – In re Trident Fashions plc ChD 5-Feb-2004
Creditors of the company sought relief, saying the voluntary arrengement made had been based upon the omission of material by the insolvency practitioner.
Held: A court could intervene in such a case only where the actions of the practitioner . .
Cited – Commissioners of Inland Revenue v The Wimbledon Football Club Limited, Ellis, Earp CA 28-May-2004
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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 23 May 2022; Ref: scu.135630

Hurst v Bennett and Others In Re A Debtor (No 302 of 1997): CA 16 Feb 2001

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 was a claim directly under the partnership.

Citations:

Times 15-Mar-2001, Gazette 26-Apr-2001, [2001] EWCA Civ 182

Links:

Bailii

Statutes:

Insolvency Rules 1986 (SI 1986 No 1925) 4.218(1) 4.220(1)

Jurisdiction:

England and Wales

Equity, Company, Insolvency

Updated: 23 May 2022; Ref: scu.135567

Dear v Reeves: CA 1 Mar 2001

A right of pre-emption granted over land was property. It had value and was capable of assignment, and was therefore a chose in action. As such it was vested the trustee in bankruptcy on the insolvency of the owner of the right. It may be difficult to value, and might not become exercisable, but it remained property.

Citations:

Times 22-Mar-2001, [2001] EWCA Civ 277

Links:

Bailii

Statutes:

Insolvency Act 1986 436

Jurisdiction:

England and Wales

Land, Insolvency

Updated: 23 May 2022; Ref: scu.135547

Kornhaas v Thomas Dithmar: ECJ 10 Dec 2015

ECJ (Judgment) Reference for a preliminary ruling – Area of freedom, security and justice – Insolvency proceedings – Regulation (EC) No 1346/2000 -Article 4(1) – Determination of the applicable law – Legislation of a Member State laying down the obligation for a managing director of a company to reimburse that company for the payments made after it had become insolvent – Application of that legislation to a company established in another Member State – Articles 49 TFEU and 54 TFEU – Restriction on the freedom of establishment – None

Citations:

ECLI:EU:C:2015:806, [2015] EUECJ C-594/14

Links:

Bailii

Jurisdiction:

European

Insolvency

Updated: 23 May 2022; Ref: scu.557015