Mr Duff sought an order requiring the trustee to account for his intromissions and management of the bankrupt estate in relation to claims presented in the sequestration by two creditors.
Lord Glennie
[2013] ScotCS CSOH – 101
Bailii
Bankruptcy (Scotland) Act 1913 82
Scotland, Insolvency
Updated: 14 November 2021; Ref: scu.511097
Purle QC HHJ
[2013] EWHC 1734 (Ch)
Bailii
England and Wales
Insolvency
Updated: 14 November 2021; Ref: scu.511047
[2021] EWHC 2600 (Ch)
Bailii
England and Wales
Insolvency
Updated: 14 November 2021; Ref: scu.668328
ECHR Article 6-1
Fair hearing
Arbitrary domestic decision amounting to denial of justice: violation
Facts – In 2004 the applicant instituted civil proceedings against his employer, who was in financial difficulty, for outstanding holiday pay. The applicant’s claim was granted at first instance in line with the applicable labour law and collective agreements, but the judgment was reversed on appeal on the grounds that accepting the applicant’s claim would have resulted in the applicant being treated more favourably than the employer’s other employees, none of whom had received outstanding holiday pay.
Law – Article 6-1: The Court reiterated that the question of the interpretation of domestic law lay primarily with the national courts and it would intervene only when those courts in a particular case applied the law manifestly erroneously or so as to reach an arbitrary conclusion. In the applicant’s case the domestic law had clearly provided for instances in which employees were entitled to holiday pay. Having established the relevant facts, the first-instance court had found that the applicant was entitled to the payments. However, the appellate court had overturned that judgment without a single reference to the labour law or the facts as established at first instance. Nor had it explained what the law was or how it should be applied in the applicant’s case. In fact, the reasoning of the appellate court had no legal foundation and was based on an abstract assertion falling outside any reasonable judicial discretion. In conclusion, the arbitrary ruling of the appellate court in the applicant’s case had amounted to a denial of justice and violated his right to a fair hearing.
Conclusion: violation (unanimously).
(See also De Moor v. Belgium, no. 16997/90, 23 June 1994; and Barac and Others v. Montenegro, no. 47974/06, 13 December 2011)
1401/08 – Legal Summary, [2013] ECHR 478
Bailii
European Convention on Human Rights 6-1
Human Rights, Employment, Insolvency
Updated: 12 November 2021; Ref: scu.510774
The claimants sought to have set aside statutory demands served to enforce judgmens, they said under a discrepancy. The order refusing their application should they said, have notified them of their right to appeal.
Held: None of the applicable rules expressly required otification that an appeal was available.
Newey J
[2015] EWHC 932 (Ch), [2015] WLR 3776, [2015] 2 All ER (Comm) 663, [2015] BPIR 444, [2015] WLR(D) 164, [2015] 1 WLR 3776, [2016] 1 All ER 477
Bailii, WLRD
Insolvency Act 1986 264, Insolvency Rules 1986, Civil Procedure Rules 3.3(5)
England and Wales
Insolvency, Civil Procedure Rules
Updated: 12 November 2021; Ref: scu.545433
It was said that land, a hotal and gold courses, had been sold at an undervalue and that the transaction was void as against the seller’s liquidator.
Held: The appeal was allowed. The critical issue was whether ‘the alienation was made for adequate consideration’. One element was that the same debt said to have been taken on by the purchaser, was in fact proved against the company on its subsequent insolvency. The criticisms levelled at the Lord Ordinary in relation to this matter missed their target: ‘His treatment of this chapter of evidence was not unbalanced, and did not indicate any failure to understand it or to take it into account. More generally, he gave careful consideration to the arguments and evidence adduced on behalf of the liquidator, and explained why he nevertheless concluded that the liquidator’s case should be rejected.’
Lord Reed summarised the approach to a judgment of the Court of Session: ‘It follows that, in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified.’
and ‘It does not matter, with whatever degree of certainty, that the appellate court considers that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached.’
Lord Kerr, Lord Sumption, Lord Reed, Lord Carnwath, Lord Toulson
[2014] 1 WLR 2600, [2014] UKSC 41, 2014 GWD 23-437, 2014 SLT 775, [2014] WLR(D) 290, 2014 SCLR 692, UKSC 2013/0083
Bailii Summary, Bailii, WLRD, SC, SC Summary, SC, SC Summary
Insolvency Act 1986 242
Scotland
Citing:
Outer House Opinion – Henderson v Foxworth Investments Ltd SCS 12-Apr-2011
Outer House – The pursuer was liquidator of a Company, suing for declarator that ‘the pretended standard security’ granted by the second defenders in favour of the first defenders in respect of subjects was void and unenforceable; and for production . .
Costs at Outer House – Henderson v Foxworth Investments Ltd and Another SCS 17-Jun-2011
The court having assoilzied the defendant in the claim now considered an application for costs. . .
Cited – Henderson v Foxworth Investments Ltd and Another SCS 17-Jun-2011
The court having assoilzied the defendant in the claim now considered an application for costs. . .
Cited – Watt (or Thomas) v Thomas HL 1947
When Scots Appellate Court may set decision aside
The House considered when it was appropriate for an appellate court in Scotland to set aside the judgment at first instance.
Lord Thankerton said: ‘(1) Where a question of fact has been tried by a judge without a jury, and there is no question . .
Cited – McGraddie v McGraddie and Another (Scotland) SC 31-Jul-2013
The parties were father and son, living at first in the US. On the son’s wife becoming seriously ill, the son returned to Scotland. The father advanced a substantal sum for the purchase of a property to live in, but the son put the properties in his . .
Cited – John Stewart Hamilton and others v Allied Domecq Plc OHCS 1-Aug-2003
. .
Cited – Thomson v Kvaerner Govan Limited HL 31-Jul-2003
The defendant appealed reversal on appeal of the award of damages aganst them. The pursuer had been working within the hull of a ship, and the plank on which he was standing had snapped, causing him to fall. The plank should have been of sufficient . .
Cited – Housen v Nikolaisen 28-Mar-2002
Supreme Court of Canada – Torts – Motor vehicles – Highways – Negligence – Liability of rural municipality for failing to post warning signs on local access road — Passenger sustaining injuries in motor vehicle accident on rural road — Trial judge . .
Cited – Re B (A Child) (Care Proceedings: Threshold Criteria) SC 12-Jun-2013
B had been removed into care at birth. The parents now appealed against a care order made with a view to B’s adoption. The Court was asked as to the situation where the risks were necessarily only anticipated, and as to appeals against a finding of . .
Cited by:
Cited – Carlyle (Scotland) v Royal Bank of Scotland Plc SC 11-Mar-2015
Assessing Whether 1st Judge was Plainly Wrong
The Court was asked whether, on an objective assessment of a what a developer and the bank had said to each other, the bank intended to enter into a legally binding promise to advance sums in the future to fund not only the developers purchase of . .
Cited – Paymaster (Jamaica) Ltd and Another v Grace Kennedy Remittance Services Ltd PC 11-Dec-2017
(Court of Appeal of Jamaica) The parties disputed the ownership of copyight in certain computer software, and also an allegation of the misuse of confidential information. . .
Cited – Perry v Raleys Solicitors SC 13-Feb-2019
Veracity of a witness is for the court hearing him
The claimant, a retired miner, had sued his former solicitors, alleging professional negligence in the settlement of his claim for Vibration White Finger damages under the government approved scheme for compensation for such injuries. At trial, the . .
Cited – Walsh v The Council of The Borough of Kirklees QBD 5-Mar-2019
No demonstrable error of assessment – no appeal
The claimant cyclist appealed from refusal of damages after being thrown from her bike on hitting a pothole in the road. The court had found it unproven that the pothole was dangerous.
Held: The evidence had been difficult. The court noted . .
Lists of cited by and citing cases may be incomplete.
Land, Insolvency
Leading Case
Updated: 12 November 2021; Ref: scu.533880
The court discussed the historic availability of set-off in an insolvency: ‘By the turn of the [20th] century, therefore, the authorities showed that debts whose existence and amount were alike contingent at the date of the receiving order, and claims to damages for future breaches of contracts existing at that date, were capable of proof and, being capable of proof, could be set off under the section provided that they arose from mutual credits or mutual dealings. The only requirement was that they must in fact have resulted in quantified money claims by the time the claim to set off was made.’ The conventional contractual position in a typical credit card use, involves three (or where there is an acquirer in fact four) separate contracts. The contract of supply remains a contract of sale for a price, even where the buyer chooses to satisfy that price by means of a card. Payment by card is not conditional upon anything that may or may not happen in the chain of separate contracts between the buyer, the card-issuing company and the store, since ‘the general understanding of the public’ is ‘that when a customer signs the voucher he has discharged his obligations to the supplier and that he pays for the goods or services he has obtained when he pays the card-issuing company’.
Millet J
[1987] Ch 150
England and Wales
Citing:
Cited – Jones v Mossop 1844
Mr Reed held a bond for pounds 500 given by Mr Jones, who had also guaranteed some loans to Mr Reed by third parties. Mr Reed died insolvent and Mr Jones was called to pay pounds 377 to the lenders under the guarantees. When Mr Reed’s assignee Mr . .
Cited – In re Moseley-Green Coal and Coke Co Ltd, Ex parte Barrett 1865
Mr Barrett owed the company money on his partly-paid shares for which calls were made after it went into insolvent liquidation. He had also guaranteed the company’s liability for the purchase price of a coal mine, for which the vendor held security . .
Cited – In re Asphaltic Wood Pavement Co Ltd 1885
. .
Cited by:
Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Cited – Revenue and Customs v Debenhams Retail Plc CA 18-Jul-2005
The store introduced a system whereby when a customer paid by credit card, the charges made to them for card handling were expressed as a separate amount on the receipt. The store then said that VAT was payable only on the net amount allocated to . .
Cited – Banco Santander Sa v Bayfern Ltd and Others ComC 29-Jun-1999
The court was asked whether the risk of fraud on the part of the beneficiary of a confirmed deferred payment letter of credit is to be borne by the issuing bank (and so possibly the applicant for the credit) or by the confirming bank where the . .
Cited – Office of Fair Trading v Abbey National Plc and seven Others ComC 24-Apr-2008
The Office sought a declaration that the respondent and other banks were subject to the provisions of the Regulations in their imposition of bank charges to customer accounts, and in particular as to the imposition of penalties or charges for the . .
Cited – Tam Wing Chuen v Bank of Credit and Commerce Hong Kong Ltd PC 1996
The Board considered a banking transaction and the application of a chargeback by the bank, under which a loan was made only after a deposit by a third party against which it was secured, and particularly in the context of the insolvency of the bank . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Consumer
Leading Case
Updated: 11 November 2021; Ref: scu.196878
The applicant had held 65% of the shares of the company by which he was employed and was its managing director. On its insolvency, he sought payment of his arrears of wages from the defendant. The industrial tribunal concluded that he was not an employee: ‘Given that the applicant was the majority shareholder and had in fact personally guaranteed obligations of the company to the two main suppliers, I came to the conclusion that the applicant was not an employee within the meaning of the relevant legislation. There was no suggestion that the applicant was under the control of anyone within the company. He may have had another director with whom he discussed matters but at the end of the day in the event of conflict it was clear because of the nature of the applicant’s shareholding that he could overrule the other director. The argument that is advanced by the applicant in his IT1 that he was under the control of other creditors did not seem to me to be an argument that helped his case at all. The key issue is the relationship between the applicant and the limited company – not the relationship between the applicant’s limited company and outside bodies. The situation clearly would have been different had the outside bodies been shareholders in the company, but that was not the case. I came to the conclusion that the applicant was operating more like a partnership running with the protection and limitations of a company and, that being so, I could not hold that the applicant was in the employ of the company and must therefore dismiss the application.’
The Employment Appeal Tribunal had dismissed his appeal. The Secretary of State relied on three submissions – (1) that the question of whether the applicant was employed under a contract of service was a question of fact for the industrial tribunal which could only be challenged on the basis that it was perverse; (2) that that was not so on the facts of the instant case; and (3) that in any event the decision in Buchan and Ivey had established what was tantamount to a rule of law that a majority shareholder could not be treated as an employee for the purposes of the employment legislation.
Held: The Court accepted the first two submissions but not the third. As regards the two submissions which Lord Coulsfield accepted he said: ‘We agree that it is well-established that the question whether or not a person is an employee is a question of fact to be decided by the industrial tribunal and that neither the Employment Appeal Tribunal nor this court is entitled to interfere unless the industrial tribunal has in some way misdirected itself or arrived at a conclusion which cannot reasonably be supported. In the present case, it seems to us that, taking all the factors together, there was ample material to entitle the industrial tribunal to reach the conclusion that the appellant was not an employee for the purposes of the employment protection legislation. There were, as counsel for the respondent recognised, factors on which the appellant could rely on as pointing towards an employment relationship, such as the fact that the appellant worked alongside other employees of the company, with the same hours of work, and had no other employment. On the other hand, the fact that he was able to decide to draw no salary during the last month of the company’s existence, the fact that he personally guaranteed its obligations and the fact that he held a substantial majority shareholding are all factors which point in the opposite direction, as is the fact that there was no written record of his terms of employment. The fact that the salary which the appellant received was paid through the PAYE system is, in our view, neutral. In all the circumstances, therefore, we have no doubt that there was ample material on which the industrial tribunal was entitled to reach the conclusion that the appellant was not an employee.
In reaching the above conclusion, we have treated the fact that the appellant held a majority shareholding in the company as a relevant factor. We do not see how it could, in common sense, be doubted that the fact that a person is a shareholder is a relevant factor. The significance of that factor will depend on the circumstances, and the weight to be given to it may vary with the size of the shareholding. It is true that, as the appellant pointed out, a change in the size of a shareholding might, on that view, lead to a change in the view taken of the status of a particular person. The decision as to whether a person is or is not an employee must, however, be taken on all the relevant factors at the material time. The shareholding position at the material time must, in our view, be a relevant factor. It will, however, usually only be one of a number of such factors, and it is not impossible that regard might be had to the way in which the person in question comes to be a shareholder, or to be a majority shareholder. As in any such decision, all the circumstances have to be considered.’
As regards the Secretary of State’s argument based on the effect of Buchan and Ivey Lord Coulsfield said: ‘As we have indicated, the argument which we have heard in the present case is limited and we did not have the assistance of submissions from a legal representative on behalf of the appellant. In these circumstances we would not wish to go too far in expressing any opinion. Nevertheless, we can say that in view of the long-standing rule to which we have referred, that the question whether or not a person is an employee is a question of fact, we would be reluctant to see the introduction of any purported rule of law into this area of decision. We note in particular that in Buchan some reliance is placed on the proposition that a controlling shareholder can prevent the company from dismissing him. We are uncertain how that factor would apply in a case like the present, where it was the liquidator who dismissed the appellant. We did not hear argument on that matter, however, and we need express no view on it. It can easily be seen, as we have said, that the fact that the claimant is a majority shareholder is always a relevant factor. Normally it will be an important factor and there may well be cases in which it is decisive. We are not, however, convinced that it would be proper to lay down any rule of law to the effect that the fact that a person is a majority shareholder necessarily and in all circumstances implies that that person cannot be regarded as an employee, for the purposes of the employment protection legislation.’
Lord Coulsfield
[1997] IRLR 682
Scotland
Cited by:
Cited – Nesbitt v Secretary of State for Trade and Industry EAT 10-Aug-2007
EAT Contract of Employment – definition of employee
Insolvency
The Appellants were a husband and wife who entered into contracts of employment with a company which they managed and which they between . .
Lists of cited by and citing cases may be incomplete.
Employment, Insolvency
Leading Case
Updated: 11 November 2021; Ref: scu.511082
The prosecutor had lead and relied at trial on evidence obtained by compulsory questioning under the 1986 Act.
Held: In doing so the prosecutor was acting to give effect to section 433.
The decision in Lambert to disallow retrospective effect of Human Rights decisions in appeal cases may have been incorrect, but will be followed. Decisions in respect of original hearings and public law cases remain retrospective in effect. Parliament had intended that a citizen whose Convention rights had been violated before the 1998 Act and was then a defendant in a trial after that date should be able to rely on his Convention rights at that trial. There were strong reasons of policy, the need for certainty in the law and finality in litigation, why a conviction which was valid and lawful at the time should not be set aside because of a change in the substantive law. It was wrong for one House of Lords Judicial Committee to reconstitute a seven judge hearing simply to anticipate reversing an earlier decision.
Lord Slynn of Hadley, Lord Lloyd of Berwick, Lord Steyn, Lord Hope of Craighead and Lord Hutton
Times 04-Dec-2001, Gazette 17-Jan-2002, [2001] UKHL 62, [2001] 3 WLR 1562, [2002] 2 AC 69, [2002] 1 All ER 257, [2002] HRLR 9, [2002] BPIR 370, [2002] 1 Cr App R 36, [2002] UKHRR 169
House of Lords, Bailii
Human Rights Act 1988, European Convention on Human Rights, Insolvency Act 1986 433
England and Wales
Citing:
Applied – Regina v Lambert HL 5-Jul-2001
Restraint on Interference with Burden of Proof
The defendant had been convicted for possessing drugs found on him in a bag when he was arrested. He denied knowing of them. He was convicted having failed to prove, on a balance of probabilities, that he had not known of the drugs. The case was . .
Appeal from – Regina v Kansal, on a Reference From the Criminal Cases Review Commission (2) CACD 24-May-2001
Once a case had been referred to the Court of Appeal by the Criminal Cases Review Commission, the court had to make a declaration, even if the case was very old. The effect of the 1998 Act on statute law was not retrospective, but where it affected . .
Cited – Regina v Campbell CACD 25-Oct-1996
The defendant appealed against his conviction for murder. At trial he had pleaded provocation, but not that he suffered abnormality of mind. Subsequent evidence of his state of mind led to this referral. The court now received fresh evidence to . .
See Also – Regina v Kansal CACD 24-Jun-1992
K had been convicted of two counts of obtaining property by deception contrary to section 15 of the Theft Act 1968. He was also convicted of two counts under the Insolvency Act 1986, namely that being a bankrupt (a) he removed property which he was . .
Cited – Regina v Preddy; Regina v Slade; Regina v Dhillon (Conjoined Appeals) HL 10-Jul-1996
The appellants were said to have made false mortgage applications. They appealed convictions for dishonestly obtaining property by deception.
Held: A chose in action created by an electronic bank transfer was not property which was capable of . .
Cited – Saunders v The United Kingdom ECHR 17-Dec-1996
(Grand Chamber) The subsequent use against a defendant in a prosecution, of evidence which had been obtained under compulsion in company insolvency procedures was a convention breach of Art 6. Although not specifically mentioned in Article 6 of the . .
Cited – Regina v Director of Public Prosecutions, ex parte Kebilene and others HL 28-Oct-1999
(Orse Kebeline) The DPP’s appeal succeeded. A decision by the DPP to authorise a prosecution could not be judicially reviewed unless dishonesty, bad faith, or some other exceptional circumstance could be shown. A suggestion that the offence for . .
Cited – Regina v Lambert HL 5-Jul-2001
Restraint on Interference with Burden of Proof
The defendant had been convicted for possessing drugs found on him in a bag when he was arrested. He denied knowing of them. He was convicted having failed to prove, on a balance of probabilities, that he had not known of the drugs. The case was . .
Cited – Practice Statement (Judicial Precedent) HL 1966
The House gave guidance how it would treat an invitation to depart from a previous decision of the House. Such a course was possible, but the direction was not an ‘open sesame’ for a differently constituted committee to prefer their views to those . .
Cited – Mitchell v WT Grant Company 13-May-1974
(Supreme Court of the USA) Stewart J said: ‘A basic change in the law upon a ground no firmer than a change in our membership invites the popular misconception that this institution is little different from the two political branches of the . .
Cited – Planned Parenthood of Southeastern Pennsylvania v Casey 29-Jun-1992
(Supreme Court of the USA) The Court discussed the grounds upon which it would depart from precedent and why it would not overrule its equally controversial decision on abortion in Roe v. Wade.
Held: ‘no judicial system could do society’s work . .
Cited – Regina v Benjafield, Leal, Rezvi and Milford CACD 21-Dec-2000
Lord Woolf MR said that where the original proceedings are brought by a public authority, an appeal is part of those proceedings to which section 22(4) applies: ‘In our judgment, where the original proceedings are brought by, or at the instigation . .
Cited – Lewis, Taylor and Mcleod, Brown, Taylor and Shaw v the Attorney General of Jamaica and Another PC 12-Sep-2000
(Jamaica) When the Privy Council considered a petition for mercy by a person sentenced to death, it could not revisit the decision, but could look only at the procedural fairness of the system. The system should allow properly for representations, . .
Cited – Parochial Church Council of Aston Cantlow and Wilmcote With Billesby, Warwickshire and Another ChD 7-Feb-2000
A lay rector could be liable for the physical upkeep of the chancel of the church by virtue of the Act, and such liability was not removed by the new Human Rights Act. Such liability could exist whether or not he had notice of the liability when . .
Cited – Regina v National Insurance Commissioner, Ex parte Hudson HL 1972
The House considered whether it would have power to make a ruling with prospective effect only. Lord Diplock said the matter deserved further consideration; Lord Simon said that the possibility of prospective overruling should be seriously . .
Cited – Regina v Knuller (Publishing, Printing and Promotions) Ltd; Knuller etc v Director of Public Prosecutions HL 1972
The defendants were charged after pasting up in telephone booths advertisements for homosexual services. They published a magazine with similar advertisements. The House was asked to confirm the existence of an offence of outraging public decency. . .
Cited – Fitzleet Estates Ltd v Cherry HL 9-Nov-1977
Income tax – Schedule D, Cases III and VI – Payments of interest and ground rent incurred when property was being developed – Whether capitalised or paid out of profits or gains brought into charge to tax – Income Tax Act 1952 (15 and 16 Geo. 6 and . .
Cited – Wallbank and Wallbank v Parochial Church Council of Aston Cantlow and Wilmcote With Billesley, Warwickshire CA 17-May-2001
The defendant owned land subject to an inclosure award of 1743, in exchange for other land which had made the owner a lay rector. The land was subject to the burden of a duty to maintain the chancel of the parish church. The defendants had been . .
Cited – Preiss v General Dental Council PC 17-Jul-2001
(Professional Conduct Committee of the GDC) The procedures of the General Dental Council were in breach of the right to a fair trial, insofar as the same person might both carry out the preliminary stages of an investigation, and later be involved . .
Cited – Regina v Mitchell CACD 1977
The court considered the effect of changes in the law after a conviction on applications for leave to appeal out of time.
Held: Lane LJ said: ‘This is an application for an extension of time in which to appeal against conviction. It should be . .
Cited – Minto v Police 1987
When considering a police officer’s assessment that a breach of the peace is imminent, the question of immediacy is in part a question of degree and is highly relevant to the reasonableness of the action taken.
A refusal or failure to . .
Cited – Montgomery and Coulter v Her Majesty’s Advocate PC 19-Oct-2000
The test of whether a defendant’s common law right to a fair trial had been damaged by pre-trial publicity was similar to the test under the Convention, and also where there was any plea of oppression. The substantial difference is that no balancing . .
Cited – Stott (Procurator Fiscal, Dunfermline) and Another v Brown PC 5-Dec-2000
The system under which the registered keeper of a vehicle was obliged to identify herself as the driver, and such admission was to be used subsequently as evidence against her on a charge of driving with excess alcohol, was not a breach of her right . .
Cited by:
Cited – The Home Office v Wainwright and Wainwright CA 20-Dec-2001
The claimants were awarded damages, following the way they were searched on seeking to enter prison on a visit. The Home Office appealed. They were asked to sign a consent form, but only after the search was nearly complete. They were told the . .
Applied – Regina v Rezvi HL 24-Jan-2002
Having been convicted of theft, a confiscation order had been made against which the appellant appealed. The Court of Appeal certified a question of whether confiscation provisions under the 1988 Act were in breach of the defendant’s human rights. . .
Cited – Regina v Lyons, Parnes, Ronson, Saunders HL 15-Nov-2002
The defendants had been convicted on evidence obtained from them by inspectors with statutory powers to require answers on pain of conviction. Subsequently the law changed to find such activity an infringement of a defendant’s human rights.
Cited – Parochial Church Council of the Parish of Aston Cantlow and Wilmcote with Billesley, Warwickshire v Wallbank and another HL 26-Jun-2003
Parish Councils are Hybrid Public Authorities
The owners of glebe land were called upon as lay rectors to contribute to the cost of repairs to the local church. They argued that the claim was unlawful by section 6 of the 1998 Act as an act by a public authority incompatible with a Convention . .
Cited – Wilson v Secretary of State for Trade and Industry; Wilson v First County Trust Ltd (No 2) HL 10-Jul-2003
The respondent appealed against a finding that the provision which made a loan agreement completely invalid for lack of compliance with the 1974 Act was itself invalid under the Human Rights Act since it deprived the respondent of its property . .
Cited – In re McKerr (Northern Ireland) HL 11-Mar-2004
The deceased had been shot by soldiers of the British Army whilst in a car in Northern Ireland. The car was alleged to have ‘run’ a checkpoint. The claimants said the investigation, now 20 years ago, had been inadequate. The claim was brought under . .
At House of Lords – Kansal v The United Kingdom ECHR 27-Apr-2004
Hudoc Judgment (Merits and just satisfaction) Violation of Art. 6-1 ; Pecuniary damage – claim rejected ; Non-pecuniary damage – finding of violation sufficient ; Costs and expenses (Convention proceedings) – . .
Cited – Clingham (formerly C (a minor)) v Royal Borough of Kensington and Chelsea; Regina v Crown Court at Manchester Ex parte McCann and Others HL 17-Oct-2002
The applicants had been made subject of anti-social behaviour orders. They challenged the basis upon which the orders had been made.
Held: The orders had no identifiable consequences which would make the process a criminal one. Civil standards . .
Cited – Hooper and Others, Regina (on the Application of) v Secretary of State for Work and Pensions HL 5-May-2005
Widowers claimed that, in denying them benefits which would have been payable to widows, the Secretary of State had acted incompatibly with their rights under article 14 read with article 1 of Protocol 1 and article 8 of the ECHR.
Held: The . .
Cited – O v Crown Court at Harrow HL 26-Jul-2006
The claimant said that his continued detention after the custody time limits had expired was an infringement of his human rights. He faced continued detention having been refused bail because of his arrest on a grave charge, having a previous . .
Cited – Juncal, Regina (on the Application of) v Secretary of State for the Home Department and others CA 25-Jul-2008
The claimant appealed dismissal of his claim for wrongful imprisonment having been detained in 1997 on being found unfit to plead to an offence of violence.
Held: Parliament had a legitimate concern for the protection of the public, and . .
Cited – Doherty and others v Birmingham City Council HL 30-Jul-2008
The House was asked ‘whether a local authority can obtain a summary order for possession against an occupier of a site which it owns and has been used for many years as a gipsy and travellers’ caravan site. His licence to occupy the site has come to . .
Cited – Hurst, Regina (on the Application of) v Commissioner of Police of the Metropolis v London Northern District Coroner HL 28-Mar-2007
The claimant’s son had been stabbed to death. She challenged the refusal of the coroner to continue with the inquest with a view to examining the responsibility of any of the police in having failed to protect him.
Held: The question amounted . .
Cited – Purdy, Regina (on the Application of) v Director of Public Prosecutions HL 30-Jul-2009
Need for Certainty in Scope of Offence
The appellant suffered a severe chronic illness and anticipated that she might want to go to Switzerland to commit suicide. She would need her husband to accompany her, and sought an order requiring the respondent to provide clear guidelines on the . .
Cited – A, Regina (on The Application of) v B; Regina (A) v Director of Establishments of the Security Service SC 9-Dec-2009
B, a former senior member of the security services wished to publish his memoirs. He was under contractual and statutory obligations of confidentiality. He sought judicial review of a decision not to allow him to publish parts of the book, saying it . .
Cited – McCaughey and Another, Re Application forJudicial Review SC 18-May-2011
The claimants sought a fuller inquest into deaths at the hands of the British Army in 1990 in Northern Ireland. On opening the inquest, the coroner had declined to undertake to hold a hearing compliant with article 2, and it had not made progress. . .
Cited – GC v The Commissioner of Police of The Metropolis SC 18-May-2011
The court was asked to decide from whom DNA samples could lawfully be taken by the Police,and for how long they should be kept. The first respondent now said that a declaration of incompatibility of section 64(1A) could not be avoided.
Held: . .
Cited – Jude v Her Majesty’s Advocate SC 23-Nov-2011
The Lord Advocate appealed against three decisions as to the use to be made of interviews where the detainees had not been given access to lawyers. In each case the prosecutor now appealed after their convictions had been overturned in the light of . .
Cited – (Un-named) (DLA) SSCS 16-Oct-2002
Disability Living Allowance . .
Cited – R(CS) 6/03 SSCS 5-Nov-2002
Maintenance assessment – whether ‘parent with care’ includes step-parent
Human rights – application of Human Rights Act 1998 where Secretary of State’s decision before October 2000 and tribunal hearing afterwards . .
Cited – Re Jordan QBNI 6-Jan-2003
. .
Cited – Wright, Re Application for Judical Review QBNI 7-Mar-2003
The applicant is the father of a man called Billy Wright who was murdered on 27 December 1997 while an inmate of Her Majesty’s Prison, the Maze, Lisburn, County Antrim. By this application Mr Wright seeks judicial review of the decision of the Chief . .
Cited – Jordan, Re Application for Judicial Review CANI 12-Dec-2003
Appeal from a decision dismissing an application by Hugh Jordan for judicial review of the ‘continuing decision’ of the Director of Public Prosecutions for Northern Ireland refusing to give reasons other than in the most general terms for his . .
Cited – Magee, Re Application for Statutory Review QBNI 16-Sep-2004
Judicial review – Criminal Justice Act 1988 – Claim for compensation for miscarriage of justice – claim is alternative under ex parte scheme – whether applicant victim of miscarriage – whether decision of Secretary of State flawed. . .
Cited – Beck and Others, Re Petitions To The Nobile Officium HCJ 29-Jan-2010
. .
Lists of cited by and citing cases may be incomplete.
Human Rights, Insolvency, Criminal Practice
Leading Case
Updated: 11 November 2021; Ref: scu.167006
The trustee in bankruptcy appealed against a decision dismissing his application for an income payments order pursuant to section 310 of the 1986 Act in respect of income which might become payable to the respondent from his personal pension policies, were he to exercise his contractual rights under those policies to draw down a lump sum or other payments.
Held: The trustee’s appeal failed. The bankrupt could not be obliged to take a lump sum from his pension funds so that it could to be treated as an income to supprot an Income Payment Order. Section 310 did not allow a reading which characterises a pension holder’s contractual rights under their pension to elect, after reaching a certain age, to draw down, or ‘crystallise’ that pension, in the form of a lump sum or income payments. Such an entitlement was after acquired property, and not available to the trustee.
The judge in Raithatha had failed properly to allow for the depth of changes introduced by the 1999 Act.
McFarlane, Gloster LJJ, Sir Stanley Burnton
[2016] EWCA Civ 989, [2016] WLR(D) 506
Bailii, WLRD
Insolvency Act 1986 310, Welfare Reform and Pensions Act 1999 11
England and Wales
Citing:
Cited – Raithatha v Williamson ChD 4-Apr-2012
A bankrupt’s present entitlement to compel payment of pension benefits fell to be included in the assessment of his income within the meaning of section 310(7) of the Insolvency Act. . .
Cited – Horton v Henry ChD 17-Dec-2014
The trustee in bankruptcy sought to oblige the bankrupt to make a capital draw on pension fund assets in order to support an Income Payment Order.
Held: The judge dismissed the application for an IPO. The court had no power under section 310 . .
Cited – In Re Landau (A Bankrupt) ChD 1-Dec-1996
At the date of the bankruptcy the bankrupt was entitled to a pension, payable in the future on his attaining the age of 65 years. He was aged 61 when the bankruptcy order was made, and 64 when it was discharged. The trustee claimed to be entitled to . .
Cited – Dennison v Krasner, Lesser, Lawrence CA 6-Apr-2000
A retirement annuity or personal pension was part of a bankrupt’s estate before the recent Act, and vested immediately in the trustee on the bankruptcy. As such there was no need to make application to the court under s310 for an income payment . .
Cited – Blight and Others v Brewster ChD 9-Feb-2012
A judgment creditor, applied for an order requiring Mr Brewster, his judgment debtor, to elect to draw down a lump sum from his pension in order to enable the judgment creditor to obtain a third party debt order against the pension trustees.
Cited – In the Estate of Borger Deceased 1912
Supreme Court Victoria – Will – Construction – Legacy, lapse of – Death of beneficiary ‘before he shall have become entitled,’ meaning of.
A testator devised his real estate to trustees upon trust for his brother J until his youngest surviving . .
Cited – Barclays Bank Plc v Holmes and others ChD 21-Nov-2000
. .
Cited – Westminster City Council v National Asylum Support Service HL 17-Oct-2002
The applicant sought assistance from the local authority. He suffered from spinal myeloma, was destitute and an asylum seeker.
Held: Although the Act had withdrawn the obligation to provide assistance for many asylum seekers, those who were . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 11 November 2021; Ref: scu.570113
The company’s liquidator had refused to assign to its former directors a claim for a reduction in corporation tax which they were funding.
Held: Such a claim did not constitute property within section 436, and was not a chose capable of assignment. All that could be assigned would be the right to appeal. Since the former directors were no longer officers of the company they could not act in its name to pursue the appeal.
Pelling QC HHJ
[2013] EWHC 1447 (Ch), [2014] 1 WLR 166, [2013] BPIR 576, [2014] 1 BCLC 474, [2013] WLR(D) 223, [2014] 2 All ER 448
Bailii, WLRD
Insolvency Act 1986 436
England and Wales
Citing:
Cited – Torkington v Magee 11-Jul-1902
Chose in Action defined
The effect of the 1873 Act was essentially procedural and it did not render choses in action that had not previously been assignable in equity capable of assignment.
Channell J defined a debt or other legal chose in action: ”Chose in Action’ . .
Cited – Heath v Tang, Stevens v Peacock CA 11-Aug-1993
The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Company
Leading Case
Updated: 11 November 2021; Ref: scu.510171
In the insolvency of Woolworths plc, a subsidiary sought to have valued its shareholding in a company in which the defendants were co-shareholders. It was argued that an earlier agreement between them had not be fully superceded by a subsequent one.
Held: The new licence arrangement impliedly involved a surrender of the old. The contractual provisions in the joint venture agreement taken together with termination provisions in a licence of IP rights were void. Their effect was to deprive creditors on a subsequent insolvency of access to the assets and was therefore against public policy in the light of the insolvency laws.
Peter Smith J
[2009] EWHC 1954 (Ch), [2009] BPIR 1315
Bailii
England and Wales
Citing:
Cited – Graves v Graves and others CA 3-Jul-2007
The parties had divorced and settled financial provision, but the former wife and her children came to need a house and one of the claimant’s properties became vacant, and she was allowed to occupy it as a tenant, with the majority of the rent being . .
Cited – Bell v Lever Brothers Ltd HL 15-Dec-1931
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying andpound;30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could . .
Cited – Perpetual Trustee Co Ltd v BNY Corporate Trustee Services Ltd and Another ChD 28-Jul-2009
The parties had entered into complicated financial arrangements effectively providing credit insurance. On the insolvency of Lehman brothers, a claim was made.
Held: The contractual provisions were effective as a matter of English law and, in . .
Cited – Great Peace Shipping Ltd v Tsavliris (International) Ltd CA 14-Oct-2002
The parties contracted for the hire of a ship. They were each under a mistaken impression as to its position, and a penalty became payable. The hirer claimed that the equitable doctrine of mutual mistake should forgive him liability.
Held: . .
Cited – Associated Japanese Bank (International) Ltd v Credit du Nord SA 1988
A contract of guarantee was made, but based upon a term of fundamental importance which was mistaken as to the existence of certain machines.
Held: The court must first look to the nature of the purported agreement. Steyn J said: ‘Logically, . .
Cited – United Dominions Corporation (Jamaica) Ltd v Shoucair PC 1969
(Jamaica) A moneylending law required, for the enforceability of a loan bearing interest at more than ten per cent, a written memorandum containing all the terms of the loan with the borrower’s signature. A bank lent money at nine per cent secured . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Company
Updated: 11 November 2021; Ref: scu.374034
Nothing in the 2003 changes to the 1986 Act operated so that a trustee in bankruptcy who sold an interest of the bankrupt for a deferred payment had not realised the interest. Accordingly, on the bankrupt’s release, that interest had been assigned out of the bankrupt’s estate and did not revert to him.
Proudman J
[2008] EWHC 2760 (Ch), Times 09-Dec-2008
Bailii
Insolvency Act 1986 283A(3)(a), Enterprise Act 2002 8261
England and Wales
Insolvency
Updated: 11 November 2021; Ref: scu.278233
The liquidator sought to set aside a pension policy acquired by the company for the benefit of a retiring director. The question was whether the decision to acquire the pension had been ratified by the shareholders.
Held: There had been no misfeasance by the directors.
A company is bound in a matter which is intra vires the company by the unanimous agreement of its members, even where that agreement is given informally and without any meeting.
Templeman LJ said: ‘There could have been gross negligence, amounting to misfeasance. If the company could not afford to pay out andpound;10,000 and was doubtfully solvent so that the expenditure threatened the continued existence of the company, the directors ought to have known the facts and ought at any rate to have postponed the grant of the pension until the financial position of the company was assured.’
Cumming-Bruce LJ referred to a suspicion that at the time of the decision the company was not in a position to pay the money to the respondent. But that evidence ‘fell far short of proof that the directors should at the time have appreciated that the payment was likely to cause loss to the creditors’.
Buckley LJ emphasised that the good faith of the directors was not questioned and there was no suggestion that they had failed to apply their minds honestly to the question whether the decision was a fair and proper thing for the company to do in the light of the company’s financial state as known to them at the time.
Templeman, Cumming-Bruce LJ
[1982] Ch 442, [1982] 3 WLR 431, [1982] 3 All ER 1045
England and Wales
Company, Insolvency
Leading Case
Updated: 11 November 2021; Ref: scu.570504
ICC Judge Barber
[2021] EWHC 2506 (Ch)
Bailii
Companies Act 2006
England and Wales
Insolvency, Company
Updated: 11 November 2021; Ref: scu.668250
The Secretary challenged the refusal to order the winding up of the company after the court accepted undertakings as to the future business model and conduct of the company.
Held: Where the insolvency proceedings were on the basis that the trading methods of a company were ‘inherently objectionable’ unders section 124A, the court had power to accept appropriate undertakings from the company as to its future business models and practices and to reject the Secretary of State’s petition.
Lord Justice Rix, Lord Justice Toulson and Lord Justice Rimer
[2009] EWCA Civ 32, Times 18-Mar-2009, [2009] Bus LR D121
Bailii
Insolvency Acy 1986 124A
England and Wales
Company, Insolvency
Updated: 10 November 2021; Ref: scu.280242
Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on its cessation. The liquidators challenged the clause as a penalty.
Held: The additional sums falling due to Prudential upon the termination of the CVA were payable as an administration expense or administration expenses for the period during which the (original) administrators were in possession of the premises for the purposes of the administration. Although the arrangement was a contract, not all laws applicable to contracs applied to it. The law of penaties applied to protect a party suffering after some oppressive contract creation circumstance. An IVA was a creature of statute, and its terms set by the company’s representatives, and no element of negotiation arose and therefore there was no opportunity to argue repression of for a penalty.
Christopher Pymont QC
[2018] EWHC 402 (Ch), [2018] WLR(D) 143
Bailii, WLRD
Insolvency Act 1986 112
England and Wales
Citing:
Cited – Johnson and Another v Davis and Another CA 18-Mar-1998
The court was asked: ‘whether or not the appellants were released from their obligation under a covenant to indemnify the respondents against claims arising under a lease by reason of the terms of an individual voluntary arrangement made under part . .
Cited – Commissioners of Inland Revenue v Adam and Partners Ltd ChD 2000
. .
Cited – Lloyds Bank Plc v Ellicott CA 8-Feb-2002
A voluntary arrangement has contractual effect. . .
Cited – Cooden Engineering Co Ltd v Stanford CA 1953
A payment to be made on a wrongful termination of a lease by a tenant, will attract consideration of the law of penalties, for notwithstanding the requirement for acceptance of it, the amount to be paid is, ‘plainly a sum to be paid in consequence . .
Mentioned – Campbell Discount Company Ltd v Bridge HL 1962
The parties disputed the validity of a clause in a car hire contract relating to the consequences of a breach.
Held: (Majority) The agreement had been terminated by breach rather than by the exercise of an option, so that the stipulated . .
Cited – Tanner v Everitt ChD 2004
Mann J discussed the status of an IVA in contract law: ‘The arrangement is therefore contractually based, with the statute providing the consent or deemed consent of the otherwise dissenting parties’ . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Cited – Thompson v Hudson HL 1869
An agreement is not penalty if it simply reserves to a creditor the right to have his debt paid in full in the event that his debtor does not pay on a due date a smaller sum that he has agreed to accept in satisfaction
Lord Hatherley said: ‘I . .
Cited – Everitt v Budhram and Another ChD 20-May-2009
The trustee in bankruptcy appealed against rejection of his claim for the sale of the home in which the bankrupts each held a one half share. The bankruptcies arose from non payment of council tax. The principle sums had been repaid, and the . .
Cited – Cavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
Cited – Philips (Hong Kong) Ltd v The Attorney General of Hong Kong PC 9-Feb-1993
After referring to two Australian cases on penalty clauses in contracts: ‘These statements assist by making it clear that the court should not adopt an approach to provisions as to liquidated damages which could, as indicated earlier, defeat their . .
Cited – Sea Voyager Maritime Inc and Others v Bielecki trading as Hughes Hooker and Co ChD 23-Oct-1998
The creditor alleged a right to recover against the estate citing an unfair prejudice from the IVA.
Held: He had been unfairly prejudiced. The IVA precluded him, like all the other unsecured creditors, from suing the debtor for the full amount . .
Cited – Welsby v Brelec Installations Limited ChD 2001
The CVA provided for the payment by the company of contributions to the supervisors for distribution to creditors. The company went on into a creditors’ voluntary liquidation.
Held: The sums held by the supervisors in trust for the CVA . .
Cited – In re Lundy Granite Co; Ex parte Heavan CA 1871
The landlord of Lundy Island, which was let to a third party, distrained upon goods of the company which had been left upon the tenant’s property. The distraint was for rent which had fallen due more than a year after the winding up order. The . .
Cited – In re Smith and Hartogs 1895
A landlord agreed to a reduction of the rent payable for the time being, with the balance in effect being added to the rent payable later in the term. The tenant failed to pay the reduced rent.
Held: The landlord was entitled to distrain for . .
Cited – In re ABC Coupler and Engineering Co Ltd (No 3) ChD 1970
The liquidator when appointed closed down the business which had been conducted on the premises, had the company’s plant and machinery valued and thought about what he should do.
Held: The rent did not become a liquidation expense until some . .
Cited – In re Downer Enterprises Ltd ChD 1974
The company was the assignee of a lease. The rent appears to have been payable in advance on the usual quarter days. The company went into liquidation in November 1971. At some time before April 1972 the liquidator instructed agents to market the . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Cited – Pillar Denton Ltd and Others v Jervis and Others CA 24-Feb-2014
The corporate tenant became insolvent, but the administrators continued in occupation. The parties now disputed whether the rent (payable in advance) was a provable debt or an administration expense.The court was asked whether a company in . .
Cited – Oakrock Ltd v Travelodge Hotels Ltd and Others TCC 16-Jan-2015
Application by the first defendant for summary judgment against the claimant for the whole of the claim on the ground that the claim has no real prospect of success and that there is no other compelling reason why the case should be disposed of at . .
Cited – Narandas-Girdhar and Another v Bradstock CA 16-Feb-2016
Appeal from rejection of claim to have set aside Individual Voluntary Arrangement . .
Cited – In re Silkstone and Dodworth Coal and Iron Co ChD 1881
A mining lease provided that the rent was payable half-yearly in arrears. Rent became payable after presentation of the winding-up petition and a winding-up order was made after the rent became payable. The lease was subject to a proviso for . .
Cited – Shackell v Chorlton 1895
. .
Cited – Re HH Realisations Ltd ChD 1975
The liquidator of a company ceased to be liable to pay the rent under the company’s lease in full from the time it gave notice to the landlord that it was seeking authority to disclaim the lease, even though it remained in occupation for nearly two . .
Cited – Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd CA 6-Apr-2006
Moore-Bick LJ discussed whether the court should give effect to a non-reliance clause in a contract saying: ‘It is common to include in certain kinds of contracts an express acknowledgement by each of the parties that they have not been induced to . .
Cited – Trident Turboprop (Dublin) Ltd v First Flight Couriers Ltd Comc 17-Jul-2008
Trident entered into Aircraft Operating Lease Agreements in identical terms with First Flight in respect of two ATP model aircraft. The leases represented the culmination of negotiations between a representative of the manufacturer, BAE Systems . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Insolvency
Updated: 10 November 2021; Ref: scu.605847
The agency challenged the inclusion in an individual voluntary arrangement of the father’s arrears of child support. The creditors meeting had approved a full and final settlement. 94% of the debts were arrears of child support. The Commission said that such arrears were not subject to the arrangement, and the arrangement was unfair to it.
Held: Child support debts are excluded as a bankruptcy debt, but not for an individual voluntary arrangement, being included within the definition in section 382(4). The statute appeared to include a deliberate choice not to exclude such debts. The Commission might avoid the consequences of it being concluded that such debts were subject to the IVA by attending and voting. It had chosen not to do so.
However, the scheme failed to recognise the particular character of the debt, and the scheme was therefore unfair and was set aside.
Pelling QC J
[2010] EWHC 485 (Ch), [2010] 2 FLR 164, [2010] BPIR 552, [2010] Fam Law 579
Bailii
Child Support Act 1991, Insolvency Act 1986 263(3) 382(4)
England and Wales
Citing:
Cited – Department of Social Security v Butler CA 1995
The effect of the 1991 Act is that the court has no jurisdiction to grant an injunction to prevent an absent parent from disposing of his assets. A detailed consideration of the 1991 Act shows that it provides a detailed and comprehensive scheme and . .
Cited – in Re Bradley-Hole (A Bankrupt) ChD 1995
There was a conflict between the creditors who were party to the IVA and a subsequent trustee in bankruptcy; and the bankruptcy was petitioned by a new creditor who was unaffected by the IVA.
Held: The IVA had created a trust of the bankrupt’s . .
Cited – Kehoe, Regina (on the Application of) v Secretary of State for Work and Pensions HL 14-Jul-2005
The applicant contended that the 1991 Act infringed her human rights in denying her access to court to obtain maintenance for her children.
Held: The applicant had no substantive right to take part in the enforcement process in domestic law . .
Applied – Re A Debtor (No.488 IO of 1996), JP v A Debtor ChD 1999
The debtor had been ordered to pay his wife a sum by way of ancillary relief in matrimonial proceedings. He then proposed an IVA, which was approved at a creditors meeting. W had notice but did not attend. She along with all other creditors was to . .
Lists of cited by and citing cases may be incomplete.
Child Support, Insolvency
Updated: 10 November 2021; Ref: scu.402599
A secured creditor was not entitled to amend after a composition had been taken and completed. Sir George Jessel MR said: ‘According to English common law a creditor might accept anything in satisfaction of his debt except a less amount of money. He might take a horse, or a canary, or tomtit if he chose, and that was accord and satisfaction; but, by a most extraordinary peculiarity of the English common law he could not take 19 shillings and sixpence in the pound; that was nudum pactum.’
Sir George Jessel MR, Lindley LJ, Baggallay LJ
(1881) 19 Ch D 394
Cited by:
Cited – Collier v P and M J Wright (Holdings) Ltd CA 14-Dec-2007
Agreement for payment by joint debtor not contract
The claimant appealed against refusal of an order to set aside a statutory demand. He said that he had compromised a claim by the creditors. He argued for an extension to the Rule in Pinnel’s case, so that where a debtor agrees to pay part of a . .
Lists of cited by and citing cases may be incomplete.
Contract, Insolvency
Leading Case
Updated: 10 November 2021; Ref: scu.262874
A company liquidator applied for an order under sections 235 and 236 of the Insolvency Act 1986 that a director should disclose information to that liquidator. The Director objected that to do so would infringe his privilege against self-incrimination. In separate proceedings, heard for these purposes together, two other companies sought remedies of an account and tracing against the same individual, who had also been a director of those companies. In the course of the proceedings, the plaintiff companies sought and obtained Mareva injunctions (freezing orders) against the defendant’s former director, and included in those orders were requirements that the director should answer certain interrogatories. The director again objected on the basis that answers to questions might incriminate him.
Held: The orders were upheld. The privilege against self-incrimination is firmly established judge-made law dating from the sixteenth century abolition of the Star Chamber. The privilege against self incrimination is entrenched, and can be removed by clear words in a statute only. The plaintiff remained entitled to refuse to answer the interrogatories on the basis that the answers might incriminate him.
Gazette 13-May-1992, [1993] Ch 1, [1992] BCLC 475
Insolvency Act 1986 236 133
England and Wales
Cited by:
Cited – Holder v The Law Society Admn 26-Jul-2005
The applicant challenged the independence of the respondent’s disciplinary tribunal.
Held: The claim failed: ‘the nature of the Tribunal is entirely adequately independent and impartial for the purposes for which it is constituted. The . .
Cited – A, K, M, Q and G v HM Treasury Admn 24-Apr-2008
The applicants were suspected of terrorist associations. Their bank accounts and similar had been frozen. They challenged the Order in Council under which the orders had been made without an opportunity for parliamentary challenge or approval.
Insolvency, Human Rights
Leading Case
Updated: 10 November 2021; Ref: scu.78423
The appellant had guaranteed his brother’s loan from the respondent, and the guarantee having been called in and unpaid, he had been made bankrupt. He now appealed saying that the guarantee debt, even though of a fixed amount could not form the basis of a statutory demand without action being taken on the debt first.
Held: The appeal failed. The possible inclusion of a damages liability as the basis of a good petitioning creditor’s debt cannot be based on the extended definition of ‘bankruptcy debt’ in s.382(1) and (4). It has to be found in the practice and decisions of the court as to what constitutes a debt in a liquidated sum for the purposes of a creditor’s petition. A debt for a liquidated sum must be a pre-ascertained liability under the agreement which gives rise to it. That was not the case here, and there was nothing in the wording of the deed to displace the standard result.
Ward, Moses, Patten LJJ
[2011] EWCA Civ 1286, [2012] BPIR 145, [2011] NPC 117
Bailii
Insolvency Act 1986 267 322(a) 382
England and Wales
Citing:
Cited – Hope v Premierpace (Europe) Ltd 1999
A claim for an account and payment was not one for debt which could form the subject of a statutory demand. . .
Cited – Lep Air Services v Rolloswin Investments Ltd; Moschi v LEP Air Services HL 1973
The obligation of a guarantor under a contract ‘is not an obligation himself to pay a sum of money to the creditor, but an obligation to see to it that another person, the debtor, does something.’ When a repudiatory breach is accepted by the injured . .
Appeal from – McGuinness v Norwich and Peterborough Building Society ChD 23-Nov-2010
The claimant appealed against his bankruptcy saying that it had followed as statutory demand based upon his alleged default under a guarantee of his brothers mortgage borrowings. He said that such a claim was not a liquidated sum within the 1986 . .
Cited – Socony Mobil Oil Co Inc and others v West of England Ship Owners Mutual Insurance Association Ltd (Padri Island) (No 2); Firma CF-Trade SA v Similar (The ‘Fant’) HL 14-Jun-1990
The House was asked as to the effect of section 1(3) of the 1930 Act on policies including ‘pay or be paid’ clauses.
Held: The central question was whether the condition of prior payment was rendered of no effect by section 1(3) of the Act of . .
Cited – Utterson v Vernon And Others 5-Feb-1790
There had been an agreement to lend to the bankrupt some stock which she undertook to replace. The act of bankruptcy and the declaration of her bankruptcy took place before the stock was replaced. The parties disputed whether the agreement created a . .
Cited – Ex Parte Job Broadhurst In The Matter Of Job Broadhurst 7-Dec-1852
A covenant given by the father of two existing partners to an incoming partner to pay any shortfall in the debts due to the firm below a stated sum and to bear the debts of the existing partners in excess of a stated sum was treated not as a . .
Cited – Owen v Routh And Ogle CCP 27-Jan-1854
The plaintiff alleged the breach of an undertaking to deliver share certificates on a particular day. The defendants said that bankruptcy discharged them from the obligation. The bankruptcy applied to the defendants’ ‘debts and sums of money due or . .
Cited – In Re Dummelow CA 1872
The parties disputed whether a particular creditor was entitled to vote at the first meeting. The section excluded a right to vote in the case of creditors in respect of ‘any unliquidated or contingent debt, or any debt the value of which is not . .
Cited – Ex parte Ward CA 1882
The court was asked whether a creditor might petition for bankruptcy on a liability as a broker who had failed to settle sums due on purchasing shares on the London Stock Exchange. He was declared a defaulter under the Exchange rules as to . .
Cited – Re Miller CA 1901
A prospective partner in the firm paid andpound;2,000 to a broker on terms that he should have the option of demanding its repayment if he did not become a partner by a date. The firm was hammered before that date and having given notice to . .
Cited – Re a Debtor; ex parte Berkshire Finance Co Ltd QBD 2-Jan-1962
The court was asked to consider whether a judgment debt in respect of sums due under a hire-purchase agreement was a good petitioning creditor’s debt. The judgment sum included the balance of all the remaining hire charges which became payable on . .
Mentioned – Campbell Discount Company Ltd v Bridge HL 1962
The parties disputed the validity of a clause in a car hire contract relating to the consequences of a breach.
Held: (Majority) The agreement had been terminated by breach rather than by the exercise of an option, so that the stipulated . .
Cited – Truex v Toll ChD 6-Mar-2009
The bankrupt appealed against an order in bankruptcy made against her on application by her former solicitors in respect of their unpaid costs. The bankrupt said that since the bill was yet untaxed, it might be altered and could not base a statutory . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Banking
Updated: 10 November 2021; Ref: scu.448322
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair dismissal, breach of contract and otherwise. The claims were issued anyway, and the administrators argued that they were a nullity, save for the claims for protective awards. The claimants argued that the claims had a real prospect of success, and to deny them would be inequitable.
Held: The claimants sought to have applied the wrong test. The claims were monetary claims. There has to be shown some exceptional reason to allow the actions. The claimants said that the fact that the claims would otherwise not be provable in the liquidation made them such, but this was rejected. The claims were contingent debts or debts. They did not require a judgment to be provable in the liquidation.
Norris J
[2010] EWHC 826 (Ch)
Bailii, Times
Insolvency Act 1986 Sch b1 p43(6), Employment Rights (Northern Ireland) Order 1996, Insolvency Rules 12.3(1)
England and Wales
Citing:
Cited – AES Barry Ltd v Txu Europe Energy Trading ChD 15-Jul-2004
Patten J considered whether to grant consent to a monetary action against the company now in administration, and said: ‘it will be in exceptional cases that the Court gives a creditor whose claim is simply a monetary one, a right by the taking of . .
Appeal From – Jones v Kernott ChD 10-Jul-2009
The couple were unmarried but had bought a property in joint names. Ms Jones had contributed the overwhelming share of the purchase price, and had paid all outgoings after Mr Kernott left several years ago. The County court judge had awarded J 90%, . .
Cited – AIB Capital Markets Plc and Another v Atlantic Computer Systems Plc and others; in re Atlantic Computers CA 25-Jul-1990
The court was asked how the administrators should deal with third parties seeking to exercise existing proprietary rights (including security rights) against the company in administration, and gave guidance. Nicholls LJ noted that in some cases . .
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Cited – Glenister v Rowe CA 21-Apr-1999
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which . .
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 . .
Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Cited – Krasner v McMath; in Re Huddersfield Fine Worsteds Limited CA 12-Aug-2005
The administrators had adopted the contracts of certain employees, who now claimed that the protective awards should have priority to the expenses of the administration.
Held: The payments did fall within paragraph 99(5) and do not have . .
Cited – Casson and Another v The Law Society Admn 20-Oct-2009
Two solicitors had been made bankrupt and then discharged from bankruptcy. They suffered adjudications by the SDT awarding compensation for matters occurring before the bankruptcies. They appealed, saying that the awards were bankruptcy debts from . .
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 – Steele, Regina (on the Application of) v Birmingham City Council and The Secretary of State for Work and Pensions CA 16-Dec-2005
The claimant had received an overpayment of benefits (Job seeker’s allowance), but then was made bankrupt. He now said that this was a debt in the bankruptcy.
Held: It was not. At the date of the bankruptcy order, the possible reclaim was not . .
Cited – Re Armstrong Whitworth 1947
Four workmen who had suffered pre-liquidation accidents but had made post-liquidation claims had, at the date of the winding up, ‘contingent claims’. . .
Cited – 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 . .
Cited by:
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Employment
Updated: 10 November 2021; Ref: scu.408582
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 statutory prohibition against creditors bringing proceedings against a company being wound up by the court is not extra-territorial. The protection of the assets of a company in administration is not to be regarded by the Court as differing in substance from the protection of the assets of a company in compulsory liquidation. In both cases, the assets of the company are dealt with by an officer appointed by the Court in accordance with statutory duties.
The conduct of the Appellants and the circumstances of the attachments brought it into the exceptional category in which the grant of injunctive relief is justified, notwithstanding comity and notwithstanding the outstanding application of the Administrators in New York.
Lord Justice Ward, Lord Justice Stanley Burnton and Sir John Chadwick
[2009] EWCA Civ 632, Times 10-Jul-2009, [2009] Bus LR 1663, [2010] 1 Ch 187, [2010] 2 WLR 349
Bailii
Insolvency Act 1986
England and Wales
Citing:
Cited – In Re Oriental Inland Steam Company ex parte Scinde Railway Company CA 1874
The liquidator obtained an order requiring a creditor who had attached assets in India to return them to the company in liquidation.
Sir W M James LJ said: ‘The winding-up is necessarily confined to this country. It is not immaterial to . .
Cited – Mitchell v Carter ChD 1997
Section 183 of the 1986 Act, which precludes a creditor who levies execution or attaches a debt after commencement of a winding up, from retaining the benefit of his execution or attachment, does not apply to executions or attachments in foreign . .
Cited – Re Vocalion (Foreign) Ltd 1932
The section only applies only to proceedings pending in the UK, and not to proceedings in a foreign Court. The Court has an equitable jurisdiction in personam to restrain a respondent properly served in this country from proceeding with an action . .
Cited – Societe Nationale Industrielle Aerospatiale v Lee Kui Jak, Yong Joon Kim and, Lee Kui Jak (F) PC 14-May-1987
Brunei Darussalam – The Board was asked where a civil claim should be tried.
Held: The court stated some principles governing the grant of anti-suit injunctions restraining foreign proceedings. The inconvenience of a forum is of itself not a . .
Cited – 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 . .
Cited – Barclays Bank v Homan CA 1993
If the conduct of a creditor can be castigated as oppressive or vexatious the Court can and should grant relief in order to protect the performance by administrators of their functions and duties. . .
Lists of cited by and citing cases may be incomplete.
Jurisdiction, Insolvency
Leading Case
Updated: 09 November 2021; Ref: scu.347220
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld the agreements.
Held: The appeal failed. The agreement was valid and enforceable. The anti-deprivation rule as such was too well-established to be set aside, but it was to be limited to certain contexts, and these should be clarified:- ‘a deliberate intention to evade insolvency laws must be shown, though that intention need not be subjective, and a commercially good faith transaction should not found in breach. It does not apply save in insolvency. The distinction between an interest determinable on bankruptcy, a ‘flawed asset’, which is outside the anti-deprivation rule, and an absolute interest defeasible on bankruptcy by a condition subsequent, which falls foul of the rule, was too well established to be dislodged other than by legislation, though not every proprietary right expressed to determine or change on bankruptcy is valid, still less a deprivation which has been provided for in the transaction from the outset. The source of the assets is an important though not sufficient element in determining whether there had been a fraud on the bankruptcy law.’
Lord Collins said: ‘it is well established that if the deprivation takes place for reasons other than bankruptcy, the anti-deprivation rule does not apply.’
This was a complex commercial transaction entered into in good faith. Although, as a matter of law, the security was provided by the Issuer out of funds raised from the Noteholders, in substance the security was provided by the Noteholders and subject to a potential change in priorities. The security was provided by the Noteholders to secure their own liability, but subject to terms, including the provisions for Noteholder Priority and Swap Counterparty Priority, in a complex commercial transaction entered into in good faith. There has never been any suggestion that those provisions were deliberately intended to evade insolvency law.
Lord Phillips, President, Lord Hope, Deputy President, Lord Walker, Lady Hale, Lord Mance, Lord Collins, Lord Clarke
UKSC 2009/0222, [2011] UKSC 38, [2011] Bus LR 1266, [2011] 3 WLR 521, [2012] 1 All ER 505, [2012] 1 BCLC 163, [2011] BPIR 1223, [2012] 1 AC 383, [2011] BCC 734
Bailii Summary, SC, SC Summary, Bailii
England and Wales
Citing:
Cited – Whitmore v Mason 18-Nov-1861
The exclusion of the lease on bankruptcy of the partner was void. Sir William Page Wood V-C said: ‘the law is too clearly settled to admit of a shadow of doubt that no person possessed of property can reserve that property to himself until he shall . .
Cited – Higinbotham v Holme 6-May-1812
A settlement entered into disposing of property into a trust for himself and others when the donor was not endebted, but which provided that on his bankruptcy would pay an annuity to his wife, was void as against creditors on his later bankruptcy. . .
Appeal From – Perpetual Trustee Company Ltd and Another v BNY Corporate Trustee Services Ltd and Others CA 6-Nov-2009
The court considered the extent of the so-called anti-deprivation rule which would avoid a contract designed to deprive creditors of an asset on the insolvency of a party to the contract. The claimant appealed a finding that the rule did not apply . .
At First Instance – Perpetual Trustee Co Ltd v BNY Corporate Trustee Services Ltd and Another ChD 28-Jul-2009
The parties had entered into complicated financial arrangements effectively providing credit insurance. On the insolvency of Lehman brothers, a claim was made.
Held: The contractual provisions were effective as a matter of English law and, in . .
Cited – Re Garrud, Ex parte Newitt CA 1881
A building contract provided for forfeiture on the tenant’s breach and not on bankruptcy. The bankrupt builder had broken the terms of his agreement with the landowner and it was provided in the agreement that the chattels would be forfeited to the . .
Mentioned – British Eagle International Airlines Ltd v Compagnie National Air France CA 1974
. .
Cited – British Eagle International Airlines Ltd v Compagnie National Air France HL 1975
British Eagle, which had gone into liquidation. The parties disputed a contract attempting to reset the ranking of debts. The House was asked whether there was a debt due to the insolvent company at the commencement of its winding-up, to which the . .
Cited – Ex parte Mackay; Ex parte Brown; In re Jeavons 1873
Mr Jeavons sold a patent regarding the manufacture of armour plates to a Brown and Co and Cammell and Co in consideration of the companies paying royalties. There was also a loan from the company to Mr Jeavons secured on the royalties. The parties . .
Cited – Carreras Rothmans Ltd v Freeman Mathews Treasure Ltd 1985
Peter Gibson J said: ‘where the effect of a contract is that an asset which is actually owned by a company at the commencement of its liquidation would be dealt with in a way other than in accordance with [the statutory pari passu rule] . . then to . .
Cited – Ayerst (Inspector of Taxes) v C and K (Construction) Ltd HL 1976
A resolution or order for winding up of a company divests it of the beneficial interest in its assets. They become a fund which the company thereafter holds in trust to discharge its liabilities. Where a company is wound up in this country, its . .
Cited – Ex parte Jay, in re Harrison CA 26-Feb-1880
A builder agreed with the owner of the land on which he was to build houses that upon his bankruptcy all the building materials on the land should become absolutely forfeited to the owner. The builder than charged the materials, but this was not . .
Cited – International Air Transport Association v Ansett Australia Holdings Ltd 6-Feb-2008
(High Court of Australia) The rules of the clearing house scheme had been modified following the British Eagle decision so as to exclude any liability or right of action for payment between member airlines.
Held: (by a majority, Kirby J . .
Cited – Money Markets International Stockbrokers Ltd v London Stock Exchange Ltd and Another ChD 10-Jul-2001
MMI were members of the London Stock Exchange, and accordingly held one share in that non-profit making institution. The share was valueless. Anticipating losing their membership and so the share, and also the demutualisation, the share was to be . .
Cited – Ex parte Barter, Ex parte Black. In re Walker 1884
A prospective buyer of a ship had the right to take possession of the ship and use the shipbuilder’s premises and chattels to complete the building work, in the event of the builder not proceeding with the shipbuilding or going bankrupt. . .
Cited – In re Detmold, Detmold v Detmold 1889
A provision stated that the property in a marriage settlement (originating from the husband) should pass to the wife for life in the event of an alienation by, or the bankruptcy of, the husband.
Held: It was valid against the husband’s trustee . .
Cited – Borland’s Trustee v Steel Brothers and Co Ltd 1901
Mr Borland was a shareholder. The company’s articles contained pre-emption rights, such that on a shareholder’s bankruptcy, he had, on receiving a transfer notice from the directors, to transfer his shares to a manager or assistant at a fair value . .
Cited – Bombay Official Assignee v Shroff PC 1932
The bankrupt had been a member of the Bombay stock exchange. His share had been forfeit. The trustee claimed the share. The official assignee contended that his members card or the value thereof vested in him as the assignee in the insolvency, . .
Cited – In re Johns, Worrell v Johns 1928
A mother and son agreed that the sum repayable by the son in respect of periodic loans made by the mother (which could not exceed andpound;650, and might be as little as andpound;10, in all) was to increase from andpound;650 to andpound;1,650 (plus . .
Cited – Wilson v Greenwood 17-Jul-1818
Articles of partnership having provided, that on dissolution by death, notice, or misconduct, of a partner, the remaining partners should have the option of taking his share at a valuation, payable by yearly instalments in the course of seven years: . .
Cited – In re Apex Supply Co Ltd 1942
A hire purchase agreement provided that if the hirer should go into liquidation, and the owner should retake possession, the hirer would pay a sum by way of compensation for depreciation.
Held: The provision for the payment of compensation was . .
Cited – In re Stephenson; Ex parte Brown 1897
Where a person settles property in such a way that his interest determines on his bankruptcy ‘that is evidence of an intention to defraud his creditors’. . .
Cited – Tito v Waddell (No 2); Tito v Attorney General ChD 1977
Equity applies its doctrines to the substance, not the form, of transactions. In respect of the rule against self dealing for trustees ‘But of course equity looks beneath the surface, and applies its doctrines to cases where, although in form a . .
Cited – Regina v J HL 14-Oct-2004
The defendant was to have been accused of having unlawful sexual intercourse with a girl under 16. Proceedings could not be brought, because the allegation was more than a year old, and he was instead accused of indecent assault, but on the same . .
Cited – Folgate London Market Ltd v Chaucer Insurance Plc CA 31-Mar-2011
The court was asked whether a clause in a settlement agreement relieving the paying party from its obligation to make payment to the receiving party in the event of the latter’s insolvency infringed the so-called anti-deprivation principle that . .
Cited – Lomas (Administrators of Lehman Brothers International (Europe)) v JFB Firth Rixson Inc and Others ChD 21-Dec-2010
Interest swap counterparties withheld payments due to Lehman Brothers International (Europe) in reliance on a provision of an ISDA Master Agreement that a party’s payment obligations were subject to the condition precedent that there was no . .
Cited – Lester v Garland 24-Mar-1832
A trader on his marriage received a fortune of andpound;5000 with his wife ; and settled a sum of stock in trust for himself for life, with limitations over for the benefit of his wife and children, in the event of his becoming bankrupt or . .
Cited – In re Maxwell Communications plc ChD 1993
It was argued that the pari passu distribution of assets among unsecured creditors was a general rule of insolvency law from which it was not possible to contract out, even to one’s own disadvantage, particularly by analogy with cases on set-off in . .
Cited – Mayhew v King and Others ChD 20-May-2010
The court was asked to make a declaration which turned on the interpretation of the ‘anti-deprivation’ rule and its application to a settlement agreement: ‘Milbank is insolvent and has had an administration order made against it. Chaucer seeks an . .
Cited – In re King’s Trust 1892
Lord Porter said it was ‘little short of disgraceful to our jurisprudence’ that in reference to a rule professedly founded on public policy there should be a distinction between a gift of an annuity for life coupled with a proviso for cessation if . .
Cited – Kitchen v Royal Air Force Association CA 1958
The plaintiff’s husband, a member of the RAF, was electrocuted and killed in the kitchen of his house. A solicitor failed to issue a writ in time and deprived the plaintiff of the opportunity to pursue court proceedings.
Held: Damages were not . .
Cited – Lehman Brothers Special Financing Inc v Carlton Communications Ltd ChD 28-Mar-2011
Claims under interest rate swap agreements.
Held: The condition precedent in section 2(a)(iii) of the ISDA Master Agreement was valid – ‘to relieve the non-defaulting party from payment obligations for as long as the defaulting party is, by . .
Cited – Kemble and Another v Kicks and Others; In Re the Trusts of the Scientific Investment Pension Plan ChD 5-Mar-1998
Provision in pension scheme withdrawing benefits to bankrupt beneficiary defeated trustees claim only if determinable or defeasible interest. . .
Cited – In re Sharp’s Settlement Trusts 1972
. .
Cited by:
Cited – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Cited – Wright and Another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd ChD 6-Mar-2018
IVA is a special form of contract
Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Financial Services, Contract
Updated: 09 November 2021; Ref: scu.442223
The petitioner’s winding-up petition had been dismissed on the defendant company being put into administration. The petitioner asked for its costs to be paid as an administration expense payable in priority to the administrator’s expenses.
Held: Rule 2.12 must be read purposively. The order could be made, though not with the priority requested. Briggs J said: ‘an administration on the application of the company may be the last stage in a long process whereby the company comes to be subjected to an insolvency process in the interests of its creditors, the earlier stages of which may include the bringing of a winding-up petition, and the prosecution of that petition in the face of dogged resistance by the company itself. In my judgment one of the purposes for which Rule 2.12(1)(e) permits a person who has presented a winding-up petition to appear at the hearing of an administration application is to enable that person to seek an order for the costs of that petition, which will ordinarily be dismissed at the hearing of the administration application, if an administration order is made.’
Briggs J
[2010] EWHC 180 (Ch), Times 28-Apr-2010, [2010] Bus LR 854
Bailii
Insolvency Rules 1986 (SI 1986 No 1925) 2.12(3), Insolvency Act 1986
England and Wales
Citing:
Cited – Re Gosscott (Groundworks) Ltd 1988
The court had jurisdiction under section 51 to order that the costs of administration proceedings overtaken by a compulsory liquidation could be ordered to be treated as costs in the winding-up. . .
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 . .
Cited – Unadkat and Co (Accountants) Ltd v Bhardwaj and Another ChD 11-Oct-2006
Section 651 was broad enough to enable the court to order that the costs of having the dissolution of a company declared void be treated as an expense in the winding-up, notwithstanding the decision of the House of Lords in Re Toshoku Finance UK plc . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Costs
Updated: 09 November 2021; Ref: scu.396747
ECJ Regulation (EC) No 1346/2000 – Insolvency proceedings – International jurisdiction – Extension of insolvency proceedings opened in respect of a company established in one Member State to a company whose registered office is in another Member State because the property of the two companies has been intermixed.
Tizzano P
C-191/10, [2011] EUECJ C-191/10
Bailii
Regulation (EC) No 1346/2000
European, Insolvency
Updated: 09 November 2021; Ref: scu.450095
ECJ (Judgment) Reference for a preliminary ruling – Social policy – Collective redundancies – Directive 98/59/EC – Article 1(1)(a) – Meaning of ‘establishment’ – Method of calculating the number of workers made redundant
T von Danwitz, P
C-80/14, [2015] EUECJ C-80/14, ECLI:EU:C:2015:291
Bailii
Directive 98/59/EC 1(1)(a)
European
Employment, Insolvency
Updated: 09 November 2021; Ref: scu.546229
EAT Practice and Procedure : Review
After a default judgment new material came to light of a TUPE transfer. The Employment Judge refused to review the judgment. This was an error as it plainly affected the forward losses she had awarded to the Claimant, which had been capped at the date of what was said to be an administration. Once the administrators transferred the business, logically his contract would not have terminated but been transferred. This new evidence was admitted at the EAT, the review conducted and the case remitted to the same Employment Judge for fresh assessment of compensation.
McMullen QC
[2012] UKEAT 0215 – 12 – 2510
Bailii
England and Wales
Employment, Insolvency
Updated: 09 November 2021; Ref: scu.468949
The claimant, as trustee for the deceased’s insolvent estate, sought a declaration that a transfer of the deceased’s share in property made by the executors was void as being at an undervalue. The property was subject to a right of occupation in favour of one of the purchaser, one of the defendants, and therefore reduced in value.
Held: The effect of Regulation 12 was to allow such an application to go back much further than could happen in a normal insolvency, but in this case, at the time of the transfer, the parties knew of the estate’s debts. On the facts, no common intention to create a binding right was established, and therefore the sale was at a gross undervalue, and was to be set aside.
David Cooke J
[2011] EWHC 2001 (Ch)
Bailii
Administration of Insolvent Estates of Deceased Persons Order 1986 (SI 1986/1999)
England and Wales
Citing:
Cited – Lloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
Cited – Pascoe v Turner CA 1-Dec-1978
The defendant had been assured by the plaintiff that ‘the house is yours and everything in it.’ In reliance on that assurance she carried out improvements to the house. Although the improvements were modest, their cost represented a large part of . .
Cited – Kernott v Jones CA 26-May-2010
The unmarried couple bought a property together. Mr K appealed against an award of 90% of the property to his former partner. The court was asked, whether, following Stack v Dowden, it was open to the court to find that the parties had agreed that . .
Cited – James v Thomas CA 23-Nov-2007
The claimant sought an interest in the property registered in the sole name of the respondent. The respondent had inherited a share in the property, and then bought out the interests of his siblings with support of a loan. The claimant had made no . .
Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
Cited – Oxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .
Lists of cited by and citing cases may be incomplete.
Wills and Probate, Insolvency, Trusts
Updated: 09 November 2021; Ref: scu.442271
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 authorise the selling, factoring or discounting . . of its book debts or other negotiable instruments’
Held: Whilst purporting to create a fixed charge over present and future book debts and imposing restrictions on the sale, factoring or discounting of book debts, the debenture did not require the chargor to pay them into an account with the chargee. Reference to a ‘first specific charge’ over book debts had to yield to the only conclusion from the rights in fact granted that the charge over book debts was a floating charge only.
Hoffmann J said: ‘But a floating charge is consistent with some restriction upon the company’s freedom to deal with its assets. For example, floating charges commonly contain a prohibition upon the creation of other charges ranking prior to or pari passu with the floating charge. Such dealings would otherwise be open to a company in the ordinary course of its business.’ and
‘I do not think that the bank balance falls within the term ‘book debts or other debts’ as it is used in the debenture. It is true that the relationship between banker and customer is one of debtor and creditor. It would not therefore be legally inaccurate to describe a credit balance with a banker as a debt. But this would not be a natural usage for a businessman or accountant. He would ordinarily describe it as ‘cash at bank’: compare the balance sheet formats in Part I, section B of Schedule 4 to the Companies Act 1985′ and ‘In this debenture, the significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The significant feature of the Brightlife debenture was that the company was free to collect its debts and pay the proceeds into its bank account: ‘Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The company had given a charge over its book debts to te bank. The bank asserted that it was a first specific charge and purported to restrict the company’s right to factor its debts without the bank’s consent. A debenture holder then gave notice to fix the charge, but only a week before a voluntary winding up resolution.
Held: The charge on the book debts was a floating charge, and having crystallised a week before, it had priority over the other debts.
Although clause 3(A)(ii)(a) referred to a ‘first specific charge’ over book debts and others, ‘the rights over the debts created by the debenture were in my judgment such as to be categorised in law as a floating charge.’ . . And a ‘significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge . . I do not think that it is open to the courts to restrict the contractual freedom of parties to a floating charge on such grounds. The floating charge was invented by Victorian lawyers to enable manufacturing and trading companies to raise loan capital on debentures . . without inhibiting its ability to trade. . The public interest requires a balancing of the advantages to the economy of facilitating the borrowing of money against the possibility of injustice to unsecured creditors . . arguments for and against the floating charge are matters for Parliament rather than the courts.’
Hoffmann J
[1987] 1 Ch 200, [1988] VLY 306
England and Wales
Citing:
Distinguished – 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 . .
Distinguished – 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 by:
Applied – 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 – 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 . .
Considered – Re: A Company (No. 005009 of 1987), ex parte Copp ChD 1988
MC Bacon Ltd had borrowed money from a bank. The loan was unsecured. The company got into financial difficulty. The bank commissioned a report on the company’s financial affairs; and insisted on the grant of a debenture to secure the company’s . .
Applied – Re: New Bullas Trading Ltd ChD 5-Apr-1993
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge. . .
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 – 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 – In Re Westmaze Ltd (In Administrative Receivership) ChD 15-May-1998
Westmaze were mechanical engineers. They gave a charge to secure borrowings, which described itself as a fixed charge.
Held: A Charge over a company’s book and trading assets was in fact floating even though described as a fixed charge unless . .
Lists of cited by and citing cases may be incomplete.
Banking, Company, Insolvency
Leading Case
Updated: 09 November 2021; Ref: scu.181234
ECJ Reference for a preliminary ruling – Directive 2001/23/EC – Articles 3 to 5 – Transfers of undertakings – Safeguarding of employees’ rights – Exceptions – Insolvency proceedings – ‘Pre-pack’ – Survival of an undertaking : Judgment
[2017] WLR(D) 417, ECLI:EU:C:2017:489, [2017] EUECJ C-126/16
WLRD, Bailii
Council Directive 2001/23/EC
European
Insolvency, Employment
Updated: 09 November 2021; Ref: scu.588266
The court was asked whether a clause in a settlement agreement relieving the paying party from its obligation to make payment to the receiving party in the event of the latter’s insolvency infringed the so-called anti-deprivation principle that prevents the making of a valid contract by which a man’s property is to remain his until bankruptcy but is on such event to pass to someone else and so be taken away from his creditors.
Held: It was a naked attempt to provide that the obligation to pay was to be extinguished if payment would be available for creditors generally in the event of insolvency: ‘This is not a commercial purpose so much as a collateral device to avoid the consequences of the insolvency legislation.’
Sedley, Rimer, Sullivan LJJ
[2011] EWCA Civ 328
Bailii
England and Wales
Cited by:
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 09 November 2021; Ref: scu.431606
The bankrupts appealed against the refusal of a declaration that their home was now free of the claims of the defendants who had taken an assignment from the trustee in bankruptcy of the trustee’s interest in the house for a consideration of a share in any value on a sale.
Held: The 1986 Act had been amended to restrict the ability of a trustee to delay realising any interest in the bankrupt’s property. The word ‘realises’ in the section was to be taken to involve a final and complete change of identity in the interest into distributable cash. The interest in the future proceeds of sale did not therefore amount to a realisation, and the claim was out of time.
Lord Justice Laws, Lord Justice Thomas and Mr Justice Mann
[2009] EWCA Civ 448, Times 15-Jul-2009, [2009] NPC 76, [2009] 4 All ER 141, [2009] BPIR 820, [2009] 3 FCR 251, [2009] Fam Law 794
Bailii
Insolvency Act 1986 283A
England and Wales
Cited by:
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
Updated: 09 November 2021; Ref: scu.346909
Interest swap counterparties withheld payments due to Lehman Brothers International (Europe) in reliance on a provision of an ISDA Master Agreement that a party’s payment obligations were subject to the condition precedent that there was no continuing Event of Default with respect to the other party.
Held: As to whether the anti-deprivation principle applied, the authorities justified a distinction between (a) cases where the asset of the insolvent company was a chose in action representing the quid pro quo for something already done, sold or delivered before the onset of insolvency; and (b) cases where the right in question consists of the quid pro quo (in whole or in part) for services yet to be to be rendered or something still to be supplied by the insolvent company in an ongoing contract. In the former situation the court would more readily hold that the anti-deprivation rule applied.
Briggs J
[2010] EWHC 3372 (Ch), [2011] BPIR 788, [2011] 2 BCLC 120
Bailii
England and Wales
Cited by:
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Cited – Pioneer Freight Futures Company Ltd v TMT Asia Ltd ComC 21-Jul-2011
. .
Cited – Pioneer Freight Futures Company Ltd v TMT Asia Ltd ComC 1-Apr-2011
. .
Lists of cited by and citing cases may be incomplete.
Contract, Insolvency
Updated: 09 November 2021; Ref: scu.427405
Application to set aside statutory demand.
[2021] EWHC 2611 (Ch)
Bailii
England and Wales
Insolvency
Updated: 09 November 2021; Ref: scu.668327
Major Wilson had left England on active service soon after the beginning of the Great War, leaving his business affairs, in a fairly precarious state, with his bank. The jury found that the bank had failed in its duty to supervise his business affairs and to take reasonable steps to maintain his credit and reputation. Major Wilson was made bankrupt and he and his trustee in bankruptcy joined in an action against the bank. The jury awarded damages of about andpound;45,000 for depreciation in the bankrupt’s business and estate caused by the bank’s negligence (although the House was not unanimous as to whether this finding was justified on the evidence) and andpound;7,500 for damage to his credit and reputation.
Held: The former sum was recoverable by the trustee in bankruptcy, and the latter by the bankrupt personally, even though the damages arose from the same breach of contract.
Lord Birkenhead applied Rolin, saying: ‘The defendants undertook for consideration to sustain the credit of the trading customer. On principle the case seems to me to belong to that very special class of cases in which a banker, though his customer’s account is in funds, nevertheless dishonours his cheque. The ratio decidendi in such cases, is so obviously injurious to the credit of the trader that the latter can recover, without allegation of special damage, reasonable compensation for the injury due to his credit.’
Lord Atkinson said: ‘If one man inflicts an injury upon another the resort by the sufferer to reasonable expedients for the bona fide purpose of counteracting, curing or lessening the evil effects of the injury done him, does not necessarily absolve the wrongdoer, even though the sufferer’s efforts should, in the result, undesignedly aggravate the result of injury.’
Lord Atkinson, Lord Birkenhead LC
[1918-19] All ER Rep1035, [1920] LR AC 102, [1920] AC 102
England and Wales
Citing:
Cited – Beckham v Drake HL 11-Jul-1849
Non-property assets do not pass on bankruptcy
An action was brought on a contract for hiring and service, where the plaintiff was to serve for seven years, and the defendant to pay weekly wages during that time; and the breach was a dismissal during the seven years. The plaintiff, after this . .
Followed – Rolin And Another v Steward, Public Officer of The East of England Bank 8-May-1854
Substantial damages may be recovered against a banker, for dishonouring an acceptance and cheques of a customer, there being sufficient assets in his hands at the time to meet them. . .
Cited by:
Cited – Mulkerrins v Pricewaterhouse Coopers HL 31-Jul-2003
The claimant sought damages from her former accountants for failing to protect her from bankruptcy. The receiver had unnecessarily caused great difficulties in making their claim that such an action vested in them. The defendants had subsequently, . .
Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Shah and Another v HSBC Private Bank (UK) Ltd QBD 26-Jan-2009
The claimants sought damages after delays by the bank in processing transfer requests. The bank said that the delays were made pending reports of suspected criminal activity. The bank’s delay had stigmatised the claimant causing further losses. The . .
Cited – Kpohraror v Woolwich Building Society CA 10-Jan-1996
The defendants had wrongfully refused payment of the claimant’s cheque for pounds 4,550. The error was realised on the same day, and corrected. The master awarded damages of pounds 5,550 as general damages to the claimant’s credit by reason of the . .
Cited – Kpohraror v Woolwich Building Society CA 1996
The Society, acting as a bank, had at first failed to pay its customer’s cheque for andpound;4,550, even though there were sufficient funds. The bank said that it had been reported lost. The customer sought damages to his business reputation.
Insolvency, Damages, Banking
Leading Case
Updated: 02 November 2021; Ref: scu.185413
ECJ Reference for a preliminary ruling – Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Insolvency proceedings – Action to set a transaction aside by virtue of the debtor’s insolvency – Defendant resident in a third country – Jurisdiction of the court of the Member State where the debtor has the centre of his main interests
A. Tizzano, P
[2014] EUECJ C-328/12, [2014] 1 WLR 633, [2014] BPIR 504, [2014] WLR(D) 5, [2014] CEC 846, ECLI:EU:C:2014:6, [2014] 1 WLR 633, [2014] ILPr 11
Bailii, WLRD
Regulation (EC) No 1346/2000
European
Citing:
Opinion – Ralph Schmid (Acting As Liquidator of The Assets of Aletta Zimmermann) v Lilly Hertel ECJ 10-Sep-2013
ECJ Opinion – Judicial co-operation in civil matters – Insolvency proceedings – Regulation (EC) No 1346/2000 – Jurisdiction of the court of the Member State in which the centre of the debtor’s main interests is . .
Cited by:
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Leading Case
Updated: 02 November 2021; Ref: scu.520760
ECJ Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Insolvency proceedings – Concept of ‘closure of insolvency proceedings’ – Possibility for a court before which secondary insolvency proceedings have been brought to examine the debtor’s insolvency – Possibility of opening winding-up proceedings as secondary insolvency proceedings where the main proceedings are sauvegarde proceedings)
C-116/11, [2012] EUECJ C-116/11
Bailii
European
Insolvency
Updated: 02 November 2021; Ref: scu.466007
(Orse In Re HIH Casualty and General Insurance Ltd)
HIH, an Australian Insurance company, became insolvent. An order was sought for the collection and remission of it assets in England under a letter of request from the Australia Court.
Held: Once it was accepted that an English court may order the liquidator here to remit funds to a foreign liquidator, it was clear that that foreign liquidator would apply the local rules for distribution: ‘the court had jurisdiction at common law, under its established practice of giving directions to ancillary liquidators, to direct remittal of the English assets, notwithstanding any differences between the English and foreign systems of distribution. These differences are relevant only to discretion.’
Lord Hoffmann (with whom Lord Walker was in full agreement) said that remission could be ordered at common law. He referred to a ‘general principle of private international law that bankruptcy (whether personal or corporate) should be unitary and universal. There should be a unitary bankruptcy proceedings in the court of the bankrupt’s domicile which receives worldwide recognition and it should apply universally to all the bankrupt’s assets.’ this was ‘a principle rather than a rule . . heavily qualified by exceptions on pragmatic grounds.’ and ‘The primary rule of private international law which seems to me applicable to this case is the principle of (modified) universalism, which has been the golden thread running through English cross-border insolvency law since the 18th century. That principle requires the English courts, so far as is consistent with justice and UK public policy, co-operate with the courts in the country of the principal liquidation to ensure that all the company’s assets are distributed to its creditors under as single system of distribution.’
Lord Scott, whilst agreeing that it is desirable as a general proposition that there should be one universally applicable scheme of distribution of the assets of an insolvent company, did not agree with Lord Hoffmann that the court had power to remit the assets to Australia other than pursuant to the statutory power.
Lord Neuberger’s speech was to the same effect in this regard.
Lord Phillips agreed that it was in accordance with international comity and the principle of universalism that the assets should be remitted to Australia pursuant to the statutory power but did not stray into the ‘controversial area’ of whether, in the absence of statutory jurisdiction, the same result could have been reached under a discretion available under the common law
Lord Hoffmann, Lord Phillips of Worth Matravers, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Neuberger of Abbotsbury
Times 09-Apr-2008, [2008] UKHL 21, [2008] 1 WLR 852, [2008] BPIR 581, [2008] Lloyd’s Rep IR 756, [2008] BCC 349, [2008] 3 All ER 869, [2008] Bus LR 905
Bailii, HL
Insolvency Act 1986 426
England and Wales
Citing:
Cited – Re Matheson Brothers Ltd 1884
The court appointed a provisional liquidator to protect the English assets of a New Zealand company which was being wound up in New Zealand. Kay J said: ‘[What] is the effect of the winding up order which it is said has been made in New Zealand? . .
Cited – Re International Tin Council ChD 1987
An order for the winding up of a foreign company operates universally, applies to all the foreign company’s assets and brings into play the full panoply of powers and duties under the Insolvency Act 1986 like any other winding up order. Millett J . .
Appeal from – McGrath and Honey v McMahon and Others, Re HIH Casualty and General Insurance Ltd and others CA 9-Jun-2006
The insurance company was to be wound up. It operated internationally but was registered in Australia. The Australian liquidator now sought an order for the transfer of assets held here to Australia.
Held: It was inevitable that cross border . .
Cited – Cambridge Gas Transport Corp v Official Committee of Unsecured Creditors (of Navigator Holdings Plc and Others) PC 16-May-2006
(Isle of Man) A scheme of arrangement was proposed for a company with involvement in several jurisdictions. An order in New York sought assistance in the vesting of shares and assets in the Isle of Man in the creditors committee. Cambridge was a . .
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 – Re Bank of Credit and Commerce International SA (No 10) ChD 1997
An English court has power in an ancillary liquidation (provisional or final) to authorise the English liquidators to transmit the English assets to the principal liquidators in the company’s home country. The bases for this are the principles of . .
Cited – Forster v Wilson 1843
English law regards insolvency set off as a way of achieving substantial justice between the parties. . .
Cited – Re Dallhold Estates (UK) Pty Ltd ChD 1992
The court discussed the the receipt and acceptance of a letter of request: ‘The scheme of subsection (5) appears to me to be this. The first step is to identify the matters specified in the request. Secondly, the domestic court should ask itself . .
Cited – England v Smith CA 8-Dec-1999
A liquidator of an Australian company sought damages from a ‘world-wide’ company Arthur Andersen’ and sought in particular to examine a partner in the UK. Examination was at first refused since an English court would not make a similar order. That . .
Cited – Re Paramount Airways Ltd (In Administration) CA 8-Apr-1992
It was said that there had been a transction at an undervalue within section 238. It was given effect by a transfer to a bank in Jersey, from which recovery was no sought. The bank claimed that the section did not have extra-territorial effect.
Cited – In re English, Scottish and Australian Chartered Bank 1893
Vaughan Williams J said: ‘One knows that where there is a liquidation of one concern the general principle is – ascertain what is the domicile of the company in liquidation; let the court of the country of domicile act as the principal court to . .
Cited – Ayerst (Inspector of Taxes) v C and K (Construction) Ltd HL 1976
A resolution or order for winding up of a company divests it of the beneficial interest in its assets. They become a fund which the company thereafter holds in trust to discharge its liabilities. Where a company is wound up in this country, its . .
Cited – Re Suidair International Airways Ltd 1951
Insolvency law may enable the court to apply a foreign law. Wynn-Parry J said: ‘It appears to me that the simple principle is that this court sits to administer the assets of the South African company which are within its [i.e. the English court’s] . .
Cited by:
Cited – Global Distressed Alpha Fund 1 Ltd Partnership v Pt Bakrie Investindo ComC 17-Feb-2011
Action on an instrument of guarantee.
Held: judgment for the Claimant in respect of the principal sum of US$2m. and such interest payments as were due. . .
Lists of cited by and citing cases may be incomplete.
Insolvency, International
Leading Case
Updated: 02 November 2021; Ref: scu.266540
The company, a boat sales agent, made a promise to its customers to hold the funds received from them in a trust account. In breach of that promise, it used the funds to pay its own debt. The customers now appealed against a refusal to allow them to trace the funds paid in breach of trust.
Held: The claim failed. No specific fund had been created in which the claimants had any proprietary right such as would allow tracing to apply. The fact that the customers might have other good claims in equity did not mean that the remedy of tracing would apply to support them in the absence of a proprietary claim. There was a need to restrict any growth in the ambit of proprietary claims to avoid confusion and unfairness to other creditors.
Lord Justice Dyson, Lord Justice Jacob and Lord Neuberger of Abbotsbury
[2008] EWCA Civ 1604, Times 14-Jan-2009
Bailii
England and Wales
Citing:
Appeal from – Moriarty and Another v Various Customers of BA Peters Plc (In Administration) ChD 22-Jul-2008
. .
See also – Moriarty and others v Various Customers of BA Peters Plc (In Administration) ChD 29-Apr-2008
The company had acted as boat sales and brokerage. Claims were made on its insolvency as to the status of boats sold and unsold, and of deposits paid and held by the company. . .
Cited by:
Cited – Brazzill and Others v Willoughby and Others CA 27-May-2010
The regulated bank Kaupthing Singer and Friedlander Ltd (KSF) was in financial difficulties. The Bank of England required KSF to credit to a trust account all future deposits. KSF later went into insolvency. Some deposits had been credited to the . .
Lists of cited by and citing cases may be incomplete.
Equity, Insolvency, Consumer
Updated: 02 November 2021; Ref: scu.291916
The defendant had failed to account for the disappearance of a substantial part of his estate to the official receiver following his bankruptcy. He appealed his conviction for failing to provide an account, saying that the requirement to provide information infringed his right of silence and to a fair trial.
Held: The provisions were not an infringement of the defendant’s rights. The offence was one of strict liability, but the onus of proof remained upon the prosecution. At the time when the demand for information was made, there was no charge against the defendant, and it was not an attempt to obtain evidence to support a criminal charge by ‘coercion or oppression in defiance of the will of the accused’ within Saunders, and evidence received could not be used in criminal proceedings. In any event the right to silence is not absolute, and the provision was proportionate and necessary.
Aikens J said: ‘There is a distinction between the compulsory production of documents or other material which had an existence independent of the will of the suspect or accused person and statements that he has had to make under compulsion. In the former case there was no infringement of the right to silence and the right not to incriminate oneself. In the latter case there could be, depending on the circumstances.’
Lord Justice Kennedy, Mr Justice Aikensand Mr Justice Pitchford
Times 04-Apr-2002, Gazette 10-May-2002, [2002] EWCA Crim 748, [2002] 1 WLR 2815, [2003] 1 CAR 7, [2002] BPIR 1213, [2003] 1 Cr App R 7, [2002] Crim LR 653
Bailii
Insolvency Act 1986 354(3)(a), European Convention on Human Rights 6
England and Wales
Citing:
Cited – Saunders v The United Kingdom ECHR 17-Dec-1996
(Grand Chamber) The subsequent use against a defendant in a prosecution, of evidence which had been obtained under compulsion in company insolvency procedures was a convention breach of Art 6. Although not specifically mentioned in Article 6 of the . .
Cited – Attorney-General’s Reference (No 7 of 2000) CACD 29-Mar-2001
The defendant had been convicted of offences under the Insolvency Act. Evidence of his gambling was found in cheque stubs, bank statements, returned cheques and a betting file containing loose gambling statements by way of computer print outs . .
Cited by:
Cited – C Plc and W v P and Secretary of State for the Home Office and the Attorney General ChD 26-May-2006
cplc_pChD2006
The claimant sought damages from the first defendant for breach of copyright. An ex parte search order had been executed, with the defendant asserting his privilege against self-incrimination. As computer disks were examined, potentially unlawful . .
Cited – C Plc v P and Attorney General Intervening CA 22-May-2007
The respondent had been subject to a civil search, which revealed the existence of obscene images of children on his computer. He appealed against refusal of an order that the evidence should not be passed to the police as evidence. He said that the . .
Approved – Hundal and Dhaliwal, Regina v CACD 3-Feb-2004
The defendants appealed against conviction and sentence for membership of an organisation proscribed under the 2000 Act. The defendants said that at the time they joined the organisation was not proscribed, and had left before it became proscribed. . .
Cited – Regina v S and A CACD 9-Oct-2008
The defendant appealed against his conviction under the 2000 Act for failing to disclose the key used to encrypt a computer file. He was subject to a control order as a suspected terrorist. As the police raided his house, they found the key had been . .
Cited – Greater Manchester Police v Andrews Admn 23-May-2011
The CC appealed by case stated against a refusal of an order under the 2000 Act for the disclosure by the defendant of a cryptography key. The defendant had a history of sexual offences against children and had failed to keep to the terms of a . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Human Rights, Crime
Leading Case
Updated: 02 November 2021; Ref: scu.169830
The corporate tenant became insolvent, but the administrators continued in occupation. The parties now disputed whether the rent (payable in advance) was a provable debt or an administration expense.The court was asked whether a company in administration was liable to pay a quarter’s rent as an administration expense even though the amount had fallen due for that quarter the day before the company had entered into administration.
Held: It was. The administrator was obliged to make payments at the rate under the lease for the period in which he remained in possession. Such liabiliy should be calculated from day to day, and the rent payable under this calculation was a mere question of fact which was not determined by the fall of the rent days.
Lewison LJ said: ‘The true extent of the principle, in my judgment, is that the office holder must make payments at the rate of the rent for the duration of any period during which he retains possession of the demised property for the benefit of the winding up or administration (as the case may be). The rent will be treated as accruing from day to day. Those payments are payable as expenses of the winding up or administration. The duration of the period is a question of fact and is not determined merely by reference to which rent days occur before, during or after that period.’
Patten, Lewison, Sharp LJJ
[2014] EWCA Civ 180, [2014] WLR(D) 94, [2014] 2 All ER (Comm) 826, [2014] 3 WLR 901, [2014] BCC 165, [2014] 3 All ER 519, [2015] 1 Ch 87, [2014] 2 BCLC 204
Bailii, WLRD
Insolvency Act 1986 SchB1.43
England and Wales
Cited by:
Cited – Wright and Another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd ChD 6-Mar-2018
IVA is a special form of contract
Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Insolvency
Updated: 02 November 2021; Ref: scu.521564
The bankrupt renewed his request for permission to appeal against a refusal to adjourn his public examination in bankruptcy. The court had allowed a private examination so as not to prejudice pending criminal proceedings in Germany.
Held: The court had power to order the hearing to be conducted in private and had done so. A court in Germany wishing to make use of any material gathered would have to think very carefully about its duties under human rights law before doing so. The court should find a balance between the need for the hearing to go ahead and the need to protect the bankrupt from incriminating himself. Leave was refused.
Lord Justice Ward, Lord Justice Keene and Lord Justice Lawrence Collins
[2009] EWCA Civ 473, [2009] BPIR 1148
Times, Bailii
Insolvency Rules 1986 (SI 1986 No 1925) 6.175, Insolvency Act 1986 290
England and Wales
Citing:
At first instance – In re Rottmann (a Bankrupt) ChD 20-May-2008
The subject of the bankruptcy proceedings asked that the petition be heard in private so as not to prejudice pending criminal proceedings in a foreign jurisdiction.
Held: The bankrupt would be required to answer questions which might be self . .
Cited – Saunders v The United Kingdom ECHR 17-Dec-1996
(Grand Chamber) The subsequent use against a defendant in a prosecution, of evidence which had been obtained under compulsion in company insolvency procedures was a convention breach of Art 6. Although not specifically mentioned in Article 6 of the . .
Leave – Rottmann v Brittain CA 12-Nov-2008
The applicant sought leave to appeal against a refusal to adjourn his examination in bankruptcy fearing that the contents would become public prejudicing his criminal trial abroad. The court had allowed a private examination, but he felt this was . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Human Rights
Updated: 02 November 2021; Ref: scu.326973
The regulated bank Kaupthing Singer and Friedlander Ltd (KSF) was in financial difficulties. The Bank of England required KSF to credit to a trust account all future deposits. KSF later went into insolvency. Some deposits had been credited to the trust account but not all. The court was asked whether the sum held was for those for whose deposits transfers had actually been made, or for all those for whom transfers should have been made.
Held: The trust account was for all those for whom deposits should have been made under the direction. It operated as a class trust not a client account.
Sedley, Thomas, Lloyd LJJ
[2010] EWCA Civ 561, [2010] WLR (D) 140
Bailii, WLRD
Financial Services and Markets Act 2000 44
England and Wales
Citing:
Explained – Cherry v Boultbee HL 22-Nov-1839
B died having made a will leaving a fund to pay income to A who owed her money but had been made bankrupt before the death. The debt to B remained unpaid.
Held: The liability to pay the debt and the right to receive the legacy had never tested . .
See Also – In re Kaupthing Singer and Friedlander Ltd CA 11-May-2010
The court was asked as to the set-off, in a company administration, of future debts owed by the company to its creditors and by those creditors to the company, and whether the effect of those provisions was that, after the future debts were . .
See Also – Mills and Others v HSBC Trustee (CI) Ltd and Others ChD 18-Dec-2009
. .
Appeal from – Brazzill and Others v Willoughby and Others ChD 10-Jul-2009
. .
Cited – Moriarty and Another v Atkinson and Various Customers of BA Peters Plc CA 16-Dec-2008
The company, a boat sales agent, made a promise to its customers to hold the funds received from them in a trust account. In breach of that promise, it used the funds to pay its own debt. The customers now appealed against a refusal to allow them to . .
Cited – In re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .
Cited – Moriarty and others v Various Customers of BA Peters Plc (In Administration) ChD 29-Apr-2008
The company had acted as boat sales and brokerage. Claims were made on its insolvency as to the status of boats sold and unsold, and of deposits paid and held by the company. . .
Cited – Picken v Lord Balfour of Burleigh CA 1945
The rules of a pension scheme set up by a railway company provided for members’ contributions to be deducted from their salary, but in practice the deductions made had been less than they should have been.
Held: The rule in Cherry v Boultbee . .
Cited – OT Computers v First National Tricity Finance ChD 2003
. .
Cited – Ogden and Another v Trustees of the RHS Griffiths 2003 Settlement and others; In Re Griffiths deceased ChD 25-Jan-2008
A life-time transfer which had been made under a mistake as to the donor’s chances of surviving long enough for the transfer to be exempt from Inheritance Tax was set aside. Unbeknown to the donor, he had lung cancer at the time.
Held: Lewison . .
Cited – In re Akerman ChD 2-Jul-1891
The court was asked whether in the division of the testator’s residuary estate three of the testator’s seven children had to bring into account statute-barred debts due to the estate.
Held: They were bound to bring them into account. Kekewich . .
mentioned – Ogilvie v Allen HL 1899
The plaintiff, a widow, had executed deeds founding two charities and devoting to them a considerable part of the large fortune which she had inherited from her husband, but later brought proceedings to set the deeds aside asserting that she had not . .
Cited – Ogilvie v Littleboy CA 1897
Lindley LJ discussed the variation of a gift for mistake: ‘Gifts cannot be revoked, nor can deeds be set aside, simply because the donors wish they had not made them and would like to have back the property given. Where there is no fraud, no undue . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – In Re Rhodesia Goldfields Ltd ChD 1910
Partridge, a director of the company who held some of its debenture stock, was facing a serious misfeasance claim which had not yet been resolved. Set-off was therefore not available.
Held: Payment of what was due to Partridge and his . .
Lists of cited by and citing cases may be incomplete.
Banking, Insolvency
Updated: 02 November 2021; Ref: scu.416098
ECJ Judgment – Reference for a preliminary ruling – Directive 80/987/EEC – Approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer – Scope – Outstanding wage claims of seamen working on board a vessel flying the flag of a non-member country – Employer whose registered office is located in the non-member country – Employment contract subject to the law of the non-member country – Employer declared insolvent in a Member State in which its actual head office is located – Article 1(2) – Annex, Section II, A – National legislation providing a guarantee in respect of the outstanding wage claims of seaman only if they are abandoned abroad – Level of protection not equivalent to that provided by Directive 80/987
L. Bay Larsen, P
C-292/14, [2016] EUECJ C-292/14, [2016] WLR(D) 98, ECLI:EU:C:2016:116, [2016] ICR 580
Bailii, WLRD
Directive 80/987/EEC
European
Employment, Insolvency
Updated: 02 November 2021; Ref: scu.560493
Complaint was made that before the insolvency, the director of the compay had put its assets beyond the creditors. He replied that had acted so on legal advice: ‘Mr Maughan stressed . . that what he did he did on legal advice from solicitors and counsel and without any dishonest intent. . . however, seem to me that it is by itself an answer to a sec. 423 application. Subsection (3) refers to the requirement, if relief under the section is to be granted, that the court must be satisfied that the transaction was entered into for the purpose of putting assets beyond the reach of a person who is making, or may at some time make, a claim against the company. The fact that lawyers may have advised that the transaction is proper or can be carried into effect does not by itself mean that the purpose of the transaction was not the subsec. (3) purpose. It seems to me that, beyond any argument, that was the purpose for which these transactions were made. Mr Maughan formed the view that the litigation against Leasing and the judgments that were liable to be obtained would ruin Leasing’s business and would be detrimental to Leasing’s creditors, not simply Arbuthnot but the other banks as well. Mr Maughan’s motive of saving Leasing’s business was not necessarily a dishonest motive, but is consistent with an intention to put Leasing’s assets out of the reach of Arbuthnot. But for the transfers that Mr Maughan put into effect. Leasing would have had a business and assets to which recourse could have been had in satisfaction or part-satisfaction of the judgment debt that, at the time of the transfers, Arbuthnot was seeking and that shortly thereafter it succeeded in obtaining. Execution against those assets probably would, I accept, have done very great damage to Leasing’s business. It may have done damage also to the underlying interests of the other creditors, such as the other banks. But, nonetheless, Leasing’s assets were deliberately put out of the reach of Arbuthnot. The only asset left against which execution could be levied was Leasing’s right to receive quarterly-in-arrears payments from Finance.
Was the transaction at an undervalue? Subsection (1) provides that a transaction is at an undervalue if the consideration is ‘significantly less than the value, in money or money’s worth, of the consideration provided’ by the transferor. The consideration provided by the transferor in respect of the transfers of the LPs was the benefit of the income stream. The consideration coming back to Leasing consisted of the quarterly-in-arrears payments. In addition, the capital assets of Leasing, apart from the LPs, were transferred to Finance for the purpose of enabling Finance to carry on an ongoing business. It is right, in my judgment, to regard the transactions whereby Leasing’s business was transferred to Finance as one transaction. This transaction was, in my judgment, a transaction at an undervalue within the meaning of that expression in subsec. (1) of sec. 423 .’
Scott J
[1990] BCC 636
Insolvency Act 1986 423
England and Wales
Insolvency
Leading Case
Updated: 02 November 2021; Ref: scu.570506
The court considered the equity of exoneration, where property jointly owned by A and B is charged to secure the debts of B only, A is or may be entitled to a charge over B’s share of the property to the extent that B’s debts are paid out of A’s share.
Held: The trustee’s appeal failed. The equity of exoneration was part of the relief generally made available to sureties against a principal debtor, subject to exceptions supported by evidence that a contrary intention existed or where it could be inferred from the circumstances that the equity should not apply. It had in the past been applied to family units outside marriage.
Vos Ch, David Richards LJJ, Sir Patrick Elias
[2017] EWCA Civ 268, [2017] WLR(D) 271,
Bailii, WLRD
Married Women’s Property Act 1882
England and Wales
Citing:
Cited – Paget v Paget CA 1898
The plaintiff wife was ‘a lady of fortune’, with the bulk of her property settled on her for life for her separate use without power of anticipation. They ‘moved in good society and, large as their income was, they lived far beyond it.’ They were . .
Cited – Gee v Liddell ChD 1913
A co-mortgagor has an ‘interest in [and] a charge upon the estate of the principal debtor’. An equity of exoneration was applied as between brothers.
An equity of exoneration operates in the nature of ‘a charge upon the estate of the principal . .
Cited – Re a debtor (No 24 of 1971), ex parte Marley (J) v Trustee of the property of the debtor ChD 1976
The court will look to the realities of the relationship between the mortgagors and will not be governed by the terms of the mortgage instrument if they do not accord with the actual facts.
Held: the court accepted that an equity of . .
Cited – in Re Berry (a bankrupt) 1978
A married couple opened a joint bank account. H’s business fell into difficulties and overdraft facilities were arranged, secured by a mortgage over their jointly-owned house. The account was used both for the husband’s business and for household . .
Cited – Parsons v McBain 5-Apr-2001
Federal Court of Australia – BANKRUPTCY – constructive trust – transfer of property to beneficiary – whether void as against trustee in bankruptcy
EQUITY – equity of exoneration – how defeated
TRUSTS – ‘common intention constructive . .
Cited – Day v Shaw and Another ChD 17-Jan-2014
Mr and Mrs Shaw had granted a second charge over their jointly-owned matrimonial home to secure the personal guarantee given by their daughter and by Mr Shaw in respect of a bank loan to a company (Avon). Their daughter and Mr Shaw were the . .
Approved – Hall v Hall ChD 1911
An equity of exoneration in favour of a wife arises ‘at the time she charges her estate’. The doctrine of exoneration is based on an inference in each case from all the facts of that particular case. Where one co-habitee joins in granting a charge . .
Cited – In Re Pittortou (a bankrupt) ChD 1985
H and W charged the property to secure the H’s overdrawn bank account. The account was used both for his business and for payment of expenses relating to the matrimonial home. H was adjudicated bankrupt. W sought her equity to be exonerated from H’s . .
Cited – Cadlock v Dunn and Another ChD 13-May-2015
The equity of exoneration could be applied for a wife who had charged her beneficial half share of the matrimonial property to secure a loan to her husband to enable him to re-acquire his half share from his trustee in bankruptcy. The wife obtained . .
Cited – Graham-York v York and Others CA 10-Feb-2015
The claimant challenged a possession order made in respect of the house she occupied, alleging a constructive trust in her favour. The house had been occupied by the unmarried co-habiting couple for nearly 25 years before the death of one of them. . .
Cited – Re Chawda (in bankruptcy) 2014
Mr Chawda and his wife jointly owned a residential property which they charged to secure a loan, part of which refinanced the original purchase loan. The case concerned the balance of about 78,000 pounds. Mr Chawda and his brother carried on . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Equity
Updated: 02 November 2021; Ref: scu.581738
ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator brought claims under section 214 of the 1986 Act for wrongful trading against 14 defendants, including ET, one of its subsidiaries and all its directors. Two of those directors were Mr Thomas and Dr Hardwick, who applied for the proceedings against them to be struck out.
Held: The liquidator had failed to plead or adduce any evidence to support the allegation that the directors of Eagle Trust were at any material time directors of Hydrodam, and the proceedings were struck out.
Directors may be of three kinds: ‘de jure directors, that is to say those who have been validly appointed to the office; de facto directors, that is to say, directors who assume to act as directors without having been appointed validly or at all; and shadow directors who are persons falling within the definition I have read [‘a person in accordance with whose directions or instructions the directors of the company are accustomed to act’]’
Millett J then explained that liability under section 214 extended to de facto as well as to de jure and shadow directors, but the statutory liability was ‘imposed exclusively upon directors of one or other of the three kinds that I have mentioned.’ That meant that the liquidator had to plead and prove against each defendant that he was such a director of HCL.
He explained the difference between a shadow and a de facto director, saying that the latter ‘is one who claims to act and purports to act as a director, although not validly appointed as such.’ A shadow director does not so claim or purport. HCL had two titular directors, namely the two Channel Island companies, a fact that might itself justify the inference that they were accustomed to act in accordance with the directions of others, in which case those others would be shadow directors. But no such case was pleaded.
Millett J said: ‘The liquidator submitted that where a body corporate is a director of a company, whether it be a de jure, de facto or shadow director, its own directors must ipso facto be shadow directors of the company. In my judgment that simply does not follow. Attendance at board meetings and voting, with others, may in certain limited circumstances expose a director to personal liability to the company of which he is a director or its creditors. But it does not, without more, constitute him a director of any company of which his company is a director.’
Millett J
[1994] 2 BCLC 180
Insolvency Act 1986 214
England and Wales
Cited by:
Cited – Holland v Revenue and Customs and Another CA 2-Jul-2009
The appellant supported IT workers. Through his own company, he set up companies in which his company was a director, and which companies in turn employed the IT workers securing substantial savings in higher rate Corporation Tax.
Held: The . .
Cited – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .
Lists of cited by and citing cases may be incomplete.
Company, Insolvency
Leading Case
Updated: 02 November 2021; Ref: scu.377315
The Court was asked ‘whether, and if so, in what circumstances, an order or judgment of a foreign court . . in proceedings to adjust or set aside prior transactions, eg preferences or transactions at an undervalue, will be recognised and enforced in England. The appeals also raise the question whether enforcement may be effected through the international assistance provisions of the UNCITRAL Model Law (implemented by the Cross-Border Insolvency Regulations 2006 . . which applies generally, or the assistance provisions of section 426 of the Insolvency Act 1986, which applies to a limited number of countries, including Australia.’
Held: In Rubin, the appeal succeeded (Lord Clarke dissenting); there should not be special rules for avoidance judgments. The appeal in New Cap failed, since the Syndicate had submitted to the Australian jurisdiction.
A court in one jurisdiction may give a judgment in personam which is a proper basis for recognition and enforcement where the defendant (i) was present in the foreign court when the proceedings were instituted; or (ii) was a claimant, or had counterclaimed, in the foreign proceedings; or (iii) submitted to the jurisdiction of that foreign court by voluntarily appearing in the proceedings; or (iv) had agreed to submit to the jurisdiction of the foreign court before the proceedings began.
However the interests of univeraslity of insolvency were not sufficient to give them more liberal enforcement than in other matters, since this would inevitably lead to further complications. Any change would require parliamentary action.
Lord Walker, Lord Mance, Lord Clarke, Lord Sumption, Lord Collins
[2012] UKSC 46, [2012] 3 WLR 1019, [2012] 2 Lloyd’s Rep 615, [2012] WLR(D) 285, [2012] 2 BCLC 682, UKSC 2010/0184, [2013] Bus LR 1, [2013] BCC 1, [2013] 1 All ER 521, [2012] BPIR 1204, [2013] 1 All ER (Comm) 513, [2013] 1 AC 236
Bailii, Bailii Summary, SC Summary, SC, WLRD
Insolvency Act 1986 426, Cross-Border Insolvency Regulations 2006
England and Wales
Citing:
Cited – Williams v Jones 22-Jan-1845
An action of debt lies upon a judgment of a county court. And the declaration need not state that the defendant resided within the jurisdiction of the county court, or was liable to be summoned to that court for the debt ; it is enough to state that . .
Cited – Godard v Gray 1870
A judgment in personam of a foreign court of competent jurisdiction cannot be questioned by the parties on the merits when recognition or enforcement of the judgment is sought in England, notwithstanding that it may have been wrong either in fact or . .
Cited – Solomons v Ross 1764
A firm in Amsterdam was declared bankrupt and assignees were appointed. An English creditor brought garnishee proceedings in London to attach andpound;1200 owing to the Dutch firm.
Held: The court decreed that the bankruptcy had vested all the . .
Cited – Galbraith v Grimshaw and Baxter HL 2-Jan-1910
Where a Scottish sequestration occurred shortly after an English garnishee order nisi, the judgment creditor prevailed over the trustee in bankruptcy, although the result would have been different if both the attachment and the bankruptcy had . .
Cited – Adams v Cape Industries plc CA 2-Jan-1990
Proper Use of Corporate Entity to Protect Owner
The defendant was an English company and head of a group engaged in mining asbestos in South Africa. A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in . .
At First Instance – In re New Cap Reinsurance Corporation Ltd ChD 15-Mar-2011
. .
Appeal from – New Cap Reinsurance Corporation Ltd and Another v Grant and Others CA 9-Aug-2011
The court was asked whether Mr Gibbons, liquidator of New Cap Reinsurance Corporation Ltd (New Cap), could enforce in England an order which provided, among other things, for the payment of sums of money by the Defendants to New Cap, which he . .
At First Instance – Rubin and Another v Eurofinance Sa and Others ChD 31-Jul-2009
. .
Cited – Owens Bank Ltd v Bracco and Another (No2) HL 17-Jun-1992
The bank had obtained judgment in St Vincent to recover a loan. It now sought to register the judgment here for enforcement. The defendant wanted to argue that the judgment had been obtained by fraud, and to resist registration of the judgment. The . .
Cited – Galbraith v Grimshaw and Baxter CA 1910
A garnishee order nisi does not operate as a transfer of the property in the debt, but it is an equitable charge on it, and the garnishee cannot pay the debt to any one but the garnishor without incurring the risk of having to pay it over again to . .
Cited by:
Cited – Vizcaya Partners Ltd v Picard and Another PC 3-Feb-2016
No Contractual Obligation to Try Case in New York
(Gibraltar) The appellant had invested in a fraudulent Ponzi scheme run by Bernard Madoff. They were repaid sums before the fund collapsed, and the trustees now sought repayment by way of enforcement of an order obtained in New York.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Insolvency, International
Leading Case
Updated: 02 November 2021; Ref: scu.465185
ECJ Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Insolvency proceedings – Decision to open the proceedings – Centre of the debtor’s main interests – Recognition of insolvency proceedings – Public policy.
The centre of a debtor’s main interests must be identified by reference to criteria that are both objective and ascertainable by third parties, in order to ensure legal certainty and foreseeability concerning the determination of the court with jurisdiction to open the main insolvency proceedings. That requirement for objectivity and that possibility of ascertainment by third parties may be considered to be met where the material factors taken into account for the purpose of establishing the place in which the debtor company conducts the administration of its interests on a regular basis have been made public or, at the very least, made sufficiently accessible to enable third parties, that is to say in particular the company’s creditors, to be aware of them.
V. Skouris, P
C-341/04, [2006] EUECJ C-341/04, [2006] 3 WLR 309, [2006] BCC 397, [2006] ILPr 23, [2006] Ch 508, [2006] ECR I-3813, [2006] BPIR 661, [2006] All ER (EC) 1078, [2007] 2 BCLC 151, ECLI:EU:C:2006:281
Bailii
Regulation (EC) No 1346/2000
European
Cited by:
Cited – Olympic Airlines Sa Pension and Life Insurance Scheme v Olympic Airlines Sa CA 6-Jun-2013
The court considered the the jurisdiction under EU law to commence a secondary winding-up in England of a company whose main liquidation is taking place in Greece. That depended upon whether the company, registered in Greece had a sufficient . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Leading Case
Updated: 02 November 2021; Ref: scu.241362
EAT TRANSFER OF UNDERTAKINGS – Insolvency – RIGHTS ON INSOLVENCY
Employees were transferred from a company in administration to a former 90% shareholder who purchased its business. Three days later the business folded. All employees claimed arrears of pay, and holiday pay, three claimed for unpaid notice pay, and one for a redundancy payment. An Employment Judge found there had been a TUPE transfer, that Regulation 8(7) did not apply but that Regulations 8(1)-(6) did, and that applying Regulation 8(3) the transferor was liable for the payments for which the redundancy provisions and Part XII of the Employment Rights Act 1996 makes provision, which accordingly fell to the Secretary of State to discharge.
On the Secretary of State’s appeal,
Held: Regulation 8(3) did not apply to debts which had not accrued as such by the time of transfer. Pressure Cooler v Molloy [2012] ICR 51 was authority directly in point, supported by dicta of Elias J and Underhill P in earlier cases, binding on the Employment Judge, and was followed.
Langstaff P J
[2015] UKEAT 0505 – 13 – 0302
Bailii
Employment Rights Act 1996
England and Wales
Employment, Insolvency
Updated: 01 November 2021; Ref: scu.544859
Two solicitors had been made bankrupt and then discharged from bankruptcy. They suffered adjudications by the SDT awarding compensation for matters occurring before the bankruptcies. They appealed, saying that the awards were bankruptcy debts from which they were discharged. The Law Society submitted that the adjudicators’ awards were discretionary, that no debt or liability arose until the awards were made, and that the sums awarded were not bankruptcy debts.
Held: The solicitors’ appeals failed. The case law established a consistent principle of general application that where a court or tribunal has a discretion whether or not to make an award, any sum awarded in the exercise of that discretion does not exist as a debt or liability until the award is made. The making of the complaint created a risk, not a liability.
Richards LJ, Maddison J
[2009] EWHC 1943 (Admin), [2010] BPIR 49
Bailii
Solicitors Act 1974, Insolvency Act 1986 281(1) 382(1)
England and Wales
Citing:
Cited – Glenister v Rowe CA 21-Apr-1999
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which . .
Cited – Steele, Regina (on the Application of) v Birmingham City Council and The Secretary of State for Work and Pensions CA 16-Dec-2005
The claimant had received an overpayment of benefits (Job seeker’s allowance), but then was made bankrupt. He now said that this was a debt in the bankruptcy.
Held: It was not. At the date of the bankruptcy order, the possible reclaim was not . .
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 – Day v Haine and Another ChD 19-Oct-2007
The liquidator sought directions from the court after former employees of the company submitted proofs of debt in respect of protective awards made for the company’s failure to consult on their redundancy before going into liquidation.
Held: . .
Cited – Susie Radin Ltd v GMB and others CA 20-Feb-2004
The company made redundancies but failed to carry out any effective or honest consultation. The tribunal awarded the maximum 90 days protective order. The company appealed saying that it had given the employees greater notice than was strictly due. . .
Cited by:
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Insolvency
Updated: 01 November 2021; Ref: scu.376215
The defendant was the ‘common agent’ for the sale of the assets of an insolvent partnership and purchased some of the assets at a judicial auction.
Held: The purchase was voidable, even though it was made at a sale by auction.
Who bears the Expense of a Ranking and Sale? – Election of the Common Agent. – Can the Common Agent be a Purchaser? – Expense of an interim Warrant. The Common agent in a ranking is disqualified from purchasing at the judicial sale carried on under his direction.
Lord Cranworth
3 Paton 378, (1795) 3 ER 432
Commonlii
Scotland
Cited by:
Cited – Newgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
At Court of Session – The Governor And Company of Undertakers For Raising Thames Water In York Buildings v Alexander Mackenzie, Writer, To The Signet PC 15-May-1795
Who bears the Expense of a Ranking and Sale? – Election of the Common Agent. – Can the Common Agent be a Purchaser? – Expense of an interim Warrant. . .
Lists of cited by and citing cases may be incomplete.
Equity, Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.220725
The ratepayer company sought leave to appeal and to challenge the use of insolvency proceedings to recover council tax. It said that it had a valid counterclaim.
Held: Leave was refused. ‘A company is not prevented from raising a cross-claim in winding up proceedings simply because it could have raised or litigated the claim before the presentation of the petition or it has delayed in bringing proceedings on the cross-claim. The failure to litigate the cross-claim is not necessarily fatal to a genuine and serious cross-claim defeating a winding up petition. However, in deciding whether it is satisfied that the cross-claim is genuine and serious, the court is entitled to take into account all the relevant circumstances, such as the fact that a company has not even attempted to litigate the cross-claim, or that there are reasons why it has not done so.’
Lord Justice Mummery and Lord Justice Elias
[2009] EWCA Civ 372, Times 19-May-2009
Bailii
England and Wales
Citing:
Cited – Bydand Ltd (In Liquidation) ChD 13-Mar-1997
The applicant sought to have rescinded a winding up order made on 22 January 1997 in respect of a company called Bydand Ltd in respect of liability orders made for arrears of council tax.
Held: The claim failed. Liability orders are orders of . .
Cited – Seawind Tankers Corporation v Bayoil SA CA 12-Oct-1998
Although a company admitted a debt, it was nevertheless right to set aside a petition for winding up under that debt, where the company had an unquantified but greater counterclaim within the same proceedings, even if that claim could not presently . .
Cited – In Re A Debtor (No 87 of 1999); Debtor v Johnston ChD 14-Feb-2000
It was possible for a debtor, faced with a statutory demand, to seek to set up a debt against the creditor by way of a set-off and cross-demand even though the claim was against the creditor in a different capacity. Here the creditor claimed in . .
Cited – Montgomery v Wanda Modes Ltd ChD 2003
Park J said: ‘The requirement that the debtor must not have been able to litigate his . . cross-claim was not part of the ratio decidendi of Bayoil: in that case there was no dispute that, because (I infer) the whole dispute between the two parties . .
Lists of cited by and citing cases may be incomplete.
Local Government, Insolvency
Updated: 01 November 2021; Ref: scu.341795
The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to pursue an appeal; in the second, no trustee had been appointed.
Held: A bankrupt may not personally appeal against the judgment on which the bankruptcy order made. The court set out the duties of court in supervising actions for and against a bankrupt. The jurisdiction conferred by s.303(1) protects a bankrupt from injustice which might otherwise be caused by his inability to bring proceedings outside the bankruptcy jurisdiction and, in an appropriate case, permits a bankrupt to apply for an order that the trustee must make an application or bring a claim or allow the bankrupt to conduct proceedings in the name of the trustee.
Hoffmann LJ noted that the bankrupt’s estate vests in his trustee when appointed under section 306 of the 1986 Act, and, under section 285(3) no creditor has, after the making of a bankruptcy order, any remedy against the property or person of the bankrupt in respect of debts provable in the bankruptcy. The effect is ‘that the bankrupt ceases to have an interest in the either his assets or his liabilities except in so far as there may be a surplus to be returned to him upon his discharge.’
Hoffmann LJ
Independent 14-Oct-1993, Times 11-Aug-1993, [1993] 4 ALL ER 694, [1993] 1 WLR 1421
Insolvency Act 1986 306 285(3)
England and Wales
Cited by:
Cited – Coulter v Chief Constable of Dorset Police CA 13-Jul-2005
An appeal was made against an order refusing to set aside a second statutory demand. The demand was to enforce payment of an order for costs made in proceedings between the parties. The first statutory demand had been upheld, and the judge found . .
Cited – Thames Chambers Solicitors v Miah QBD 16-May-2013
The solicitors appealed against a wasted costs order. They had accepted instructions to act for a bankrupt in pursuing a debt before his discharge and without the debt having been assigned to him by the trustee in bankruptcy.
Held: The order . .
Cited – Williams v Glover and Another ChD 4-Jun-2013
The company’s liquidator had refused to assign to its former directors a claim for a reduction in corporation tax which they were funding.
Held: Such a claim did not constitute property within section 436, and was not a chose capable of . .
Cited – Wordsworth v Dixon CA 1997
The bankrupt had been a defendant in the action brought by the plaintiff. The court considered his standing to appeal.
Held: The right to appeal vested in the trustee. Sir Thomas Bingham MR referred to the case of Heath v Tang and said: ‘that . .
Cited – Singh v HM Revenue and Customs UTTC 15-May-2010
UTTC JUDICIAL REVIEW – the concession of ‘equitable liability’ known as the Noble practice – standing to bring judicial review proceedings – no.
The bankrupt objected to the attempted proof by the Revenue in . .
Cited – BPE Solicitors and Another v Gabriel SC 17-Jun-2015
Application for directions in a pending appeal. The claimant alleged negligence against his former solicitors. After his successful claim was substantially overturned on appeal, he was made bankrupt.
Held: If the trustee adopted and pursued . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Litigation Practice
Leading Case
Updated: 01 November 2021; Ref: scu.81297
ECJ (Judgment) Reference for a preliminary ruling – Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Article 3(1) – Concept of an ‘action related to insolvency proceedings and closely connected with those proceedings’ – Regulation (EC) No 44/2001 – Article 1(2)(b) – Concept of ‘bankruptcy’ – Action for payment of a debt brought by the insolvency administrator – Debt arising out of the international carriage of goods – Relationship between Regulations Nos 1346/2000 and 44/2001 and the Convention for the International Carriage of Goods by Road (CMR)
A. Tizzano, P
C-157/13, [2014] EUECJ C-157/13
Bailii
Regulation (EC) No 1346/2000 3(1), Regulation (EC) No 44/2001 1(2)(b), Convention for the International Carriage of Goods by Road
European, Insolvency, Transport
Updated: 01 November 2021; Ref: scu.536452
ECJ Council Directive 80/987 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer is to be interpreted as applying to all employees, other than those in the categories listed in the Annex thereto, whose employers may, under the applicable national law, be made subject to proceedings involving their assets in order to satisfy collectively the claims of creditors. The fact that the directive thus protects only employees faced with a situation in which their employer is insolvent in accordance with that definition is not such as to call into question its validity in the light of the principle of equal treatment. In the first place, in the exercise of the powers conferred on them by Article 100 of the Treaty, the Community institutions must be recognized as having a discretion in particular with regard to the possibility of proceeding towards harmonization only in stages, given the specific nature of the field in which coordination is sought and the difficulties involved in any harmonization. In addition, it undoubtedly constitutes a further step towards providing improved working conditions and an improved standard of living for workers throughout the Community and towards the gradual harmonization of laws in the field for a system of guarantees previously available, in differing forms, in some Member States to be extended to all the Member States. Finally, in the light of the difficulties inherent in the very concept of insolvency which the harmonization was intended to overcome, the objective criterion used to define the persons entitled to protection under that system is justified.
C-479/93, [1995] IRLR 355, [1995] EUECJ C-479/93, [1995] ICR 722
Bailii
European
Cited by:
Cited – Spencer v Secretary of State for Work and Pensions, Moore v Similar CA 1-Jul-2008
Frankovich claim – arises with measurable loss
Each claimant sought Frankovich damages alleging a failure to implement European law leading to a loss.
Held: Such a claim was available against the government after it had failed to implement the Directive so as to provide them with the . .
Lists of cited by and citing cases may be incomplete.
Employment, Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.161250
The claimant asserted as against the liquidator, a floating and registered charge over the company’s assets. The liquidator said that it had been granted within the twelve months prior to the onset of the insolvency, was caught by section 245(3)(b), and requested rectification of the register. The claimants relied on an opinion from senior counsel.
Held: The request for rectification of the register of charges was refused. The claimant had not a security interest at the time when he advanced the money; and, even had such a security interest existed, it would not be appropriate to exercise the discretion under section 404 in the claimant’s favour.
Keyser QC J
[2011] EWHC 2318 (Ch)
Bailii
Insolvency Act 1986 245(3)(b), Companies Act 2006 1096 1097, Companies Act 1985 395(1) 404, Companies Act 2006 (Commencement No. 8 Transitional Provisions and Savings) Order 2008
England and Wales
Citing:
Cited – Re Joplin Brewery Co Ltd ChD 1902
The applicants, owners of a solvent family business, sought to register a charge over the company’s assets out of time.
Held: Buckley J saw the application under s 15 of the 1900 Act as a similar application to the application to register out . .
Cited – in Re Resinoid and Mica Products Ltd CA 1967
(From 1967) An order extending time for registration of a charge will not normally be made after a company has gone into liquidation. . .
Cited – Victoria Housing Estates Ltd v Ashpurton Estates Ltd CA 1982
Although the Court has jurisdiction to extend the time for registration of a charge, its settled practice is not to do so when the company that granted the charge has already entered into liquidation. An application to extend the time for . .
Cited – In re Anglo-Oriental Carpet Manufacturing Company ChD 1903
Debentures creating a charge had been issued, but not registered within 21 days. On 1 November 1901, an order was made with the usual proviso (‘without prejudice to the rights of parties acquired prior to the time when such trust deed and debentures . .
Mentioned – In Re Jackson and Bassford Ltd ChD 1906
Buckley J distinguished between (1) an agreement to give security which was ‘so expressed as to create a present equitable right to a security’ and was thus registrable against te company registers; and (2) an agreement to give security which was so . .
Cited – In re Ehrmann Brothers Ltd CA 1906
Debentures had been issued after 1 January 1901 secured by a floating charge. It was was not registered in time. The judge had permitted registration, with a proviso as contained in In re I C Johnson, and registration was completed. A compulsory . .
Cited – Re Shoe Lace Ltd, Power v Sharp Investments Ltd CA 1993
A debenture was executed on 24th July 1990. Money earlier advanced by the chargee in anticipation of and in consideration for the debenture, including an advance made on 16th July 1990, had not been made ‘at the same time as’ the creation of the . .
Cited – In re MIG Trust Ltd CA 1933
An application under section 85 of the 1929 Act was opposed by the company at an early stage and before the matter came on for hearing. The mortgagor company was hopelessly insolvent and a winding up petition was impending. A few days later, on the . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Company
Updated: 02 November 2021; Ref: scu.444302
The bankrupt appealed against an order in bankruptcy made against her on application by her former solicitors in respect of their unpaid costs. The bankrupt said that since the bill was yet untaxed, it might be altered and could not base a statutory demand.
Held: The bankrupt’s appeal was allowed. A claim for solicitors’ fees not as yet judicially assessed or determined is not a claim for a liquidated sum which can be the subject of a bankruptcy petition under section 267 of the Insolvency Act 1986, even if the period for challenge under the 1974 Act has expired. An agreement converting an unliquidated debt into a liquidated one must be a binding agreement. That would mean an agreement for consideration, that is to say an agreement as to a fixed amount, or an agreement as to hourly rates and time spent in consideration of future services, or a compromise agreement, or conduct giving rise to an estoppel according to established principles.
Proudman J
[2009] 2 FLR 250, [2009] PNLR 21, [2009] Fam Law 474, [2009] 1 WLR 2121, [2009] BPIR 692, [2009] 4 All ER 419, [2009] EWHC 396 (Ch), [2009] WLR (D) 85
Bailii, WLRD
Insolvency Act 1986 267
England and Wales
Citing:
Cited – In Re Laceward Ltd ChD 1981
The expression ‘proceedings to recover costs’ in the Solicitors’ Remuneration Order 1972 . . includes a winding up petition even though such a petition does not lead to an order for payment of the sum in question. It may well be, and I incline to . .
Cited – Re a debtor No 833 of 1993 and No 834 of 1993 ChD 1994
The court allowed a solicitor’s statutory demand to lie despite the debtors’ argument based on the right to taxation of the underlying bill. ‘Solicitors would be placed in an intolerable position if no statutory demand could be served as long as it . .
Cited – In Re a Debtor No 32 of 1991 (No 2) ChD 1994
It was an abuse of process for a firm of accountants to serve a statutory demand for the amount of their bill. Vinelott J said of the situation where a demand is made for payment of reasonable remuneration for services rendered: ‘I do not say that a . .
Cited – Re Le Winton ChD 31-Jul-2007
Registrar Simmonds considered that: ‘in order to convert what is clearly an unliquidated sum to a liquidated sum there must be . . clear and unequivocal conduct or agreement on the part of the debtor to demonstrate acceptance of those bills of costs . .
Cited – Thomas Watts and Co (a Firm) v Smith CA 16-Mar-1998
The court considered the status of an untaxed solicitor’s bill of costs against a client for whom he had acted in defamation proceedings. Sir Richard Scott V-C said: ‘It is a fact that [the client] never entered into any contract to pay the sums as . .
Cited – O Palomo Sa v Turner and Co; Turner and Co v O Palomo Sa CA 28-Jul-1999
A solicitor’s bill could only be taxed within one year of its delivery, but the common law right to challenge a bill on the grounds that the amount charged was unreasonable could continue after that time limit. The common law right to object to . .
Cited – Joseph, Regina (on the Application Of) v Manches and Co CA 29-Jan-2002
. .
Cited – Connolly v Harrington (Liquidator of Chelmsford City Football Club (1980) Ltd 17-May-2002
An application for the assessment of a solicitors bill may be made informally. . .
Cited by:
Cited – McGuinness v Norwich and Peterborough Building Society ChD 23-Nov-2010
The claimant appealed against his bankruptcy saying that it had followed as statutory demand based upon his alleged default under a guarantee of his brothers mortgage borrowings. He said that such a claim was not a liquidated sum within the 1986 . .
Cited – McGuinness v Norwich and Peterborough Building Society CA 9-Nov-2011
The appellant had guaranteed his brother’s loan from the respondent, and the guarantee having been called in and unpaid, he had been made bankrupt. He now appealed saying that the guarantee debt, even though of a fixed amount could not form the . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Legal Professions
Updated: 02 November 2021; Ref: scu.316600
The claimant had leant money on a property fraudulently overvalued by an employee of the now insolvent first defendant. A contribution order had been agreed by the solicitors. The court heard applications by the claimants and the solicitors against the insolvent company.
Held: Given the nature and size of the fraud, it was inevitable and proper that the claimant would expend serious resources both to investigate this matter and in review of its procedures. Publicity about the case also led to a loss of confidence in the claimant and its need for rescue and merger, and substantial associated financial losses. The defendant solicitors had failed to note and report the indicia of fraud and were negligent, but the different basis of claim left them at risk of a wider liability than the principal in seeking a contribution. The Court should examine the nature and extent of the defendants’ common liability when determining whether two defendants are liable for the same damage, and ‘It seems to me neither just nor equitable that the amount of contribution which Cobbetts are to be ordered to make should be assessed by treating the damage for which both defendants are responsible as the totality of the claimant’s loss, ignoring contributory negligence, when the only reason for ignoring it is that the claim against DHL is in deceit. To do so would be to visit on Cobbetts the approach taken by the Court, partly for reasons of deterrence, against fraudsters, when Cobbetts are innocent of any fraud.’
Christopher Clarke J
[2009] EWHC 254 (Comm)
Bailii
Civil Liability (Contribution) Act 1978 1
England and Wales
Citing:
Cited – R+V Versicherung Ag v Risk Insurance and Reinsurance Solutions Sa and others ComC 29-Jan-2007
A company may be able to claim for the wasted time spent by its staff investigating the matter at issue without having to show additional expenditure or loss of revenue or profit. . .
Cited – Fitzgerald v Lane HL 14-Jul-1988
The plaintiff crossed road at a pelican crossing. The lights were against him but one car had stopped. As he passed that car he was struck by another in the second lane and again by a car coming the other way. The judge had held the three equally . .
Cited – Royal Brompton Hospital National Health Service Trust v Hammond and others HL 25-Apr-2002
The claimants sought damages against the defendants for their late delivery of a building. The contractors sought to share the damages with the architects who had certified the delays, defeating their own claims.
Held: The Act sought to extend . .
Cited – Ball v Banner and Others; Neill Clark (A Firm) v Healey and Baker (A Firm) ChD 23-Mar-2000
A valuer had described expected values for an property proposed as an investment promoted by a co-defendant. The valuation and prediction as to how long it might take to have it let had contributed to the representations leading to the investments . .
Cited – Platform Home Loans Ltd v Oyston Shipways Ltd and others HL 18-Feb-1999
The plaintiffs had lent about 1 million pounds on the security of property negligently valued at 1.5 million pounds. The property was sold for much less than that and the plaintiffs suffered a loss of 680,000 pounds. The judge found that the . .
Lists of cited by and citing cases may be incomplete.
Torts – Other, Insolvency, Damages
Updated: 02 November 2021; Ref: scu.293981
A debtor may not pay a creditor on the eve of his bankruptcy, with the intention of preferring that creditor over others – to do so is void as a fraud on the bankruptcy laws and n creditors generally because ‘it is defeating the equality that is introduced by the statutes of bankruptcy and the criminal (for the bankrupt is considered as a criminal) is taking upon himself to prefer whom he pleases’.
Lord Mansfield
[1746] EngR 5, (1746-1779) 1 Black W 660, (1746) 96 ER 384, (1768) 1 Wm Bl 660
Commonlii
Fraudulent Conveyances Act 1571
England and Wales
Insolvency
Leading Case
Updated: 02 November 2021; Ref: scu.380393
The court allowed the plaintiff to establish by evidence that his particular debt was included in the total sum acknowledged to be due to a number of creditors.
Lord Goddard CJ was satisfied that a lump sum in a balance sheet included the debt in question. The balance sheets of the defendant contained the statement, ‘to sundry creditors pounds 7,638 6s. 10d’. The defendant in that case owed the plaintiff pounds 1,807, which was the balance of moneys that had been lent to him. This debt did not accrue within six years of an action brought by the plaintiff to recover the debt. The plaintiff argued that the defendants made an acknowledgement of the debt in its balance sheet. Evidence was given at the hearing that a firm of chartered accountants had signed the balance sheets for various years and that the debt of pounds 1,807 owed by the defendant to the plaintiff was included in the sum of pounds 7,638 6s. 10d. The Court held that there was an acknowledgement of the debt in the balance sheet.
Lord Goddard CJ
[1949] 2 KB 700, [1949] 1 All ER 498
England and Wales
Cited by:
Cited – Mayor and Burgesses of London Borough of Lambeth v George Bigden and Others CA 1-Dec-2000
A block of flats had been occupied over several years by a succession of squatters. The present occupiers appealed an order for possession, and the authority appealed refusal of possession for other flats. The occupiers asserted possessory title. . .
Lists of cited by and citing cases may be incomplete.
Limitation, Insolvency
Leading Case
Updated: 02 November 2021; Ref: scu.187456
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it applies in situations involving guarantees and other sureties.
Held: The appeal was allowed. The rule in Cherry was excluded in this instance by the rule against double proof. The Trustee was to be paid in full before there could be any proof against Funding as the principle debtor by KSF as guarantor. The rule against double proof was intended to prevent a multiple of claims against the same insolvent estate, which might lead to the payment of a double dividend. The equitable rule in Cherry v Boultbee fills a gap left by the disapplication of set-off, but it should not work in opposition to it. It creates a similar netting-off effect except where some cogent principle of law requires one claim to be given strict priority to another. The rule against double proof is one such principle.
Lord Hope, Deputy President, Lord Walker, Lady Hale, Lord Clarke , Lord Collins
[2011] UKSC 48, UKSC 2010/0018
Bailii, Bailii Summary, SC Summary, SC
Insolvency Act 1986
England and Wales
Citing:
Cited – Stein v Blake HL 18-May-1995
Where A and B each have claims against each other and A is insolvent, the common amount is set off, and the net difference remains as a debt due.
Hoffmann L said: ‘It is a matter of common occurrence for an individual to become insolvent while . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Cited – In re Glen Express Ltd ChD 2000
The rule against double proof is implicit in the Insolvency Act 1986, and ‘remains good law. It is an overarching principle which still applies to insolvency, and nothing in Stein v Blake [1996] AC 243 calls it into question.’ . .
Appeal from – In re Kaupthing Singer and Friedlander Ltd ChD 18-Dec-2009
The bank went into adminstration under special arrangements. The administrators of KSF applied to the Chancery Division for directions as to the applicability of the rule in Cherry v Boultbee.
Held: The rule was not excluded. The . .
Cited – Cherry v Boultbee CA 6-Apr-1838
TB was indebted to CB, his sister, in the sum of andpound;1878. He became bankrupt, and shortly after his bankruptcy C B made her will, giving legacies of andpound;500 and andpound;2,000 to her executors, in trust to pay the interest thereof (as to . .
Cited – In re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .
See Also – In re Kaupthing Singer and Friedlander Ltd CA 11-May-2010
The court was asked as to the set-off, in a company administration, of future debts owed by the company to its creditors and by those creditors to the company, and whether the effect of those provisions was that, after the future debts were . .
See Also – In re Kaupthing Singer and Friedlander Ltd ChD 2-Oct-2009
. .
Cited – In re Melton, Milk v Towers CA 1918
In 1901 Richard Melton and another guaranteed to a Bank his son Arthur’s debts up to andpound;500. Richard died survived by his widow, Arthur and three daughters, giving his real estate to his widow for her life, with remainder to his four children . .
Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Cited – In re Oriental Commercial Bank 1871
The court considered the rule against double proof. Mellish LJ said: ‘This rule against double proof applies in the Court of Chancery as well as in the Court of Bankruptcy, and therefore would apply equally where companies are being wound up.’
Cited – Jeffs v Wood and others CA 1723
Jeffs senior had made a will appointing his son Jeffs junior as his executor and leaving a legacy of pounds 500 to his nephew Wood, who was indebted to the testator in a smaller sum. Wood was made bankrupt after the testator’s death, but before the . .
Cited – Willes v Greenhill CA 16-Nov-1860
The testator had in 1830 backed a bill for his son Henry. It was dishonoured, and after the testator’s death in 1832 his executors met the liability. Henry had a one-sixth interest, subject to his mother’s life interest, in the residuary trust fund. . .
Cited – In re Akerman ChD 2-Jul-1891
The court was asked whether in the division of the testator’s residuary estate three of the testator’s seven children had to bring into account statute-barred debts due to the estate.
Held: They were bound to bring them into account. Kekewich . .
Cited – Barclays Bank Ltd v TOSG Trust Fund Ltd CA 1984
Oliver LJ acceded to a submission that the rule better be called the rule against double dividends, for its object was to absolve the liquidator from paying out two dividends on what was essentially the same debt. Because overlapping liabilities . .
Cited – In re Fenton CA 1931
A surety under a pre-insolvency guarantee, had not actually paid, and could not pay, being bankrupt with his assets vested in the trustee. The creditor was still owed the money and entitled to prove in the liquidation.
Held: One could not have . .
Cited – In re Overend Gurney and Co (Grissell’s case) 1866
On the insolvency of a company, no cross claim may be set off against the company member’s liability for unpaid capital, for debt. Lord Cheldmsford LC said: ‘If the amount of an unpaid call cannot be satisfied by a set-off of an equivalent portion . .
Cited – In Re Peruvian Railway Construction Co Ltd 1915
William Alt died insolvent in 1908. His estate included shares in the company, which went into voluntary liquidation in 1914. Alt owed the company andpound;2,633.
Held: In the distribution of the company’s surplus assets the liquidator could . .
Cited – In re Auriferous Properties Ltd (No 2) 1898
A claim was made in the liquidations by a creditor, but the creditor also held shares in the company which were not fully paid up.
Held: The creditor plaintiff could recover nothing as a creditor until all his liability as a contributory had . .
Cited – In Re Rhodesia Goldfields Ltd ChD 1910
Partridge, a director of the company who held some of its debenture stock, was facing a serious misfeasance claim which had not yet been resolved. Set-off was therefore not available.
Held: Payment of what was due to Partridge and his . .
Cited – In re Binns 1896
Two sons were made bankrupt after the death of their father who was surety under a loan. . .
Cited – In re West Coast Gold Fields Ltd 1905
The shareholder was bankrupt, but the company, in which he owned shares on which the capital remined unpaid, was solvent and in voluntary liquidation.
Held: The payment-up of the shares in full was a condition precedent to any participation in . .
Cited – In re Melton, Milk v Towers CA 1918
In 1901 Richard Melton and another guaranteed to a Bank his son Arthur’s debts up to andpound;500. Richard died survived by his widow, Arthur and three daughters, giving his real estate to his widow for her life, with remainder to his four children . .
Cited – In re Polly Peck International plc ChD 1996
It was argued, unsuccessfully, that a special purpose company incorporated in the Cayman Islands should be regarded as a single economic unit with the holding company, so as to eliminate ‘double dip’ as well as double dividend.
Held: There . .
Cited by:
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Equity
Updated: 01 November 2021; Ref: scu.447487
Former employees had obtained a protective award against the company for failing to consult on the impending redundancies and submitted proofs of debt to the liquidator who sought guidance from the court. The judge had held that since the Act provided only one remedy, the protective awards were not provable.
Held: The appeal was allowed. The underlying basis of a protective award is to be a measure that enforces the obligation placed on the employer and the failure to comply with that obligation is backed by a penalty which is to be ‘effective proportionate and dissuasive.’ ‘As a matter of language the liability to pay a protective award is a ‘liability to which the company may become subject after [the date of liquidation] by reason of an obligation incurred before that date subject at the date when it goes into liquidation.’ True it is contingent on the Tribunal making the award later, but rule 13.12(3) says it is immaterial whether a liability is present or future, fixed or liquidated.’ and given the complete breach of the obligation to consult, the Tribunal realistically did not have a discretion to refuse an award. If it had done so it would have erred in law. The case below should have been argued on the basis of European Law.
Thomas LJ, Jacob LJ, Wall LJ
[2008] EWCA Civ 626, Times 22-Jul-2008, [2008] ICR 1102, [2008] IRLR 642
Bailii
Insolvency Rules 1986, Trade Union and Labour Relations (Consolidation) Act 1992, Council Directive 98/59/ EC of 20 July 1998, Employment Rights Act 1996
England and Wales
Citing:
Appeal from – Day v Haine and Another ChD 19-Oct-2007
The liquidator sought directions from the court after former employees of the company submitted proofs of debt in respect of protective awards made for the company’s failure to consult on their redundancy before going into liquidation.
Held: . .
Distinguished – Glenister v Rowe CA 21-Apr-1999
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which . .
Cited – Steele, Regina (on the Application of) v Birmingham City Council and The Secretary of State for Work and Pensions CA 16-Dec-2005
The claimant had received an overpayment of benefits (Job seeker’s allowance), but then was made bankrupt. He now said that this was a debt in the bankruptcy.
Held: It was not. At the date of the bankruptcy order, the possible reclaim was not . .
Cited – Julius v Lord Bishop of Oxford and Another HL 23-Mar-1880
A statute enacted that with regard to certain charges against any Clerk in Holy Orders it ‘shall be lawful’ for the Bishop of the diocese ‘on the application of any party complaining thereof’ to issue a commission for enquiry.
Held: The words . .
Cited – In re Smith ex parte Edwards 1886
The parties to an arbitration agreement had agreed to pay whatever costs the arbitrator decided in his discretion to award. The losing party then went bankrupt.
Held: His bankruptcy did not relieve him of his liability for the costs. The . .
Cited – In re British Gold Fields of West Africa 1899
An order for costs could be proved where the action was in respect of a provable debt or liability. In such a case they were regarded as an addition to the sum recovered. . .
Cited – Talke Fashions Ltd v Society of Textile Workers EAT 1978
The employer announced the closure of two factories and the redundancy of the workforce, at one factory in 15 days’ time and, at the other, in 63 days’ time. There was no consultation. The employer appealed a 60 day protective award.
Held: . .
Cited – Susie Radin Ltd v GMB and others CA 20-Feb-2004
The company made redundancies but failed to carry out any effective or honest consultation. The tribunal awarded the maximum 90 days protective order. The company appealed saying that it had given the employees greater notice than was strictly due. . .
Cited – 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 . .
Cited – Steele, Regina (on the Application of) v Birmingham City Council and The Secretary of State for Work and Pensions CA 16-Dec-2005
The claimant had received an overpayment of benefits (Job seeker’s allowance), but then was made bankrupt. He now said that this was a debt in the bankruptcy.
Held: It was not. At the date of the bankruptcy order, the possible reclaim was not . .
Cited by:
Cited – Casson and Another v The Law Society Admn 20-Oct-2009
Two solicitors had been made bankrupt and then discharged from bankruptcy. They suffered adjudications by the SDT awarding compensation for matters occurring before the bankruptcies. They appealed, saying that the awards were bankruptcy debts from . .
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Approved – 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.
Employment, Insolvency, European
Updated: 01 November 2021; Ref: scu.268797
The directors of an insurance company had declared a bonus by means of a an account of receipts which failed to deal properly with the risks underwritten. They then sought to have the company wound up voluntarily.
Held: The Directors could be ordered to repay the bonuses declared and paid.
Where a bonus was decided upon after a proper investigation and account, the court should be slow to iinterfere, but where there had been no such investigation it was able to intervene.
(1870) LR 6 Ch App 104, (1870) 40 LJ Fh 277, (1870) LT 828, (1870) WR 291 LJ
England and Wales
Cited by:
Cited – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .
Lists of cited by and citing cases may be incomplete.
Company, Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.467095
The claimant was trustee in bankruptcy but the court failed to register the bankruptcy petition at the Land Registry as a pending action. The bankrupt was therefore able to sell her land, and the trustee did not recover the proceeds. The trustee sought to recover from the defendant who was responsible for the court service.
Held: The defendant’s appeal succeeded. The obligation under rule 6.13 and the court’s practice of complying with it, and would not imply that the court would serve the request itself. The contrasting provisions of the various Acts suggested an obligation to compensate: ‘Parliament had in mind the possibility that creditors might suffer from a failure on the part of the Land Registry to comply with its duties under section 61, and considered that a private claim against the Registry should not be permitted but that compensation should be provided for out of the insurance fund. By contrast, no such provision was made in the Land Charges Act, so that the Chief Land Registrar might be taken to be open to suit for failure under that Act. Equally there was no immunity for the court under rule 149A, so, again, a breach of that duty might be taken to be actionable.’ However, ‘The fact that occasionally there may be a failure due to oversight does not seem to me to be a sufficient reason to find a private remedy for breach of the obligation created by this rule.’ The freedom of the applicant to make an application indicated against giving a private right.
There was no basis for an assertion of a common law duty: ‘this is not a question of a duty of care; it would be a duty to do an act, which is either done or not done, and the complaint would be of failure to do it at all, not of doing it but without proper care and attention. Another is that, absent the obligation imposed by the rule, the petitioning creditor would have every reason to make the request itself, as it would be entitled to do. The only basis for saying that the creditor places reliance on the court is that the rule requires the court to give the notice.’
Pill, Lloyd, Pitchford LJJ
[2010] EWCA Civ 392, [2010] 3 WLR 1237, [2010] BPIR 775, [2011] 1 Ch 1
Bailii
Land Registration Act 2002, Insolvency Act 1986 284, Insolvency Rules 1986 6.13, Land Charges Act 1972
England and Wales
Citing:
Cited – Cutler v Wandsworth Stadium Ltd HL 1949
The Act required the occupier of a licensed racetrack to take all steps necessary to secure that, so long as a totalisator was being lawfully operated on the track, there was available for bookmakers space on the track where they could conveniently . .
Cited – X (Minors) v Bedfordshire County Council; M (A Minor) and Another v Newham London Borough Council; Etc HL 29-Jun-1995
Liability in Damages on Statute Breach to be Clear
Damages were to be awarded against a Local Authority for breach of statutory duty in a care case only if the statute was clear that damages were capable of being awarded. in the ordinary case a breach of statutory duty does not, by itself, give rise . .
Cited – Ministry of Housing and Local Government v Sharp CA 1970
Mr Sharp was the local land registrar with statutory duty to maintain the local registry, issuing certificates in response to search requests. A clerk who had been seconded by another Council to assist him negligently issued an inaccurate . .
Cited – Smith (a bankrupt) v Braintree District Council HL 1989
The House considered the effects of bankruptcy on the imposition of a committal to imprisonment in default of paying rates.
The purpose of section 285 is to preserve the estate of the bankrupt for the benefit of his unsecured creditors.
Cited – HM Customs and Excise v Barclays Bank Plc HL 21-Jun-2006
The claimant had served an asset freezing order on the bank in respect of one of its customers. The bank paid out on a cheque inadvertently as to the order. The Commissioners claimed against the bank in negligence. The bank denied any duty of care. . .
Cited – Gorringe v Calderdale Metropolitan Borough Council HL 1-Apr-2004
Statutory Duty Not Extended by Common Law
The claimant sought damages after a road accident. The driver came over the crest of a hill and hit a bus. The road was not marked with any warning as to the need to slow down.
Held: The claim failed. The duty could not be extended to include . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Negligence
Updated: 01 November 2021; Ref: scu.408567
After the presentation of a bankruptcy petition against him, the debtor obtained an adjournment of the petition by paying the petitioning creditors money which he falsely represented to be that of a third party. The debtor was afterwards adjudicated bankrupt, and the trustee claimed repayment of the money from the petitioning creditors, relying on the doctrine of relation back. The petitioning creditors submitted that the debtor was estopped by his misrepresentation from saying that the money was his, and that the trustee in bankruptcy could be in no better position.
Held: Repayment was ordered. The money had become the trustee’s money by reason of the doctrine of relation back before the representation was made. He had a higher title and could not be estopped from claiming repayment of his own money by a later misrepresentation about it. The doctrine of relation back was taken literally.
Phillimore J said: ‘No doubt, when a bankrupt is estopped by some representation of his made in the course of carrying on his business, his trustee who takes his estate would be, just as much as an executor, bound, quoad the estate, by the representation, and be estopped. But here the trustee takes by a higher title. This andpound;125 was the trustee’s money by reason of the doctrine of relation back, and any statement made at the time of payment on behalf of Ashwell [the bankrupt] that it was not Ashwell’s money cannot estop the trustee from claiming the money. For this purpose, Ashwell and the trustee are different persons, and it is just the same as if Ashwell had represented that it was the money of somebody else . . This was not Ashwell’s money to make any representation about at all. It was in the contemplation of the law the trustee’s money, and, therefore, there is no estoppel.’
Phillimore J
[1912] 1 KB 390
England and Wales
Cited by:
Cited – Re Dennis (A Bankrupt) CA 22-May-1995
A joint tenancy was severed (under the former law) on the event of an act of bankruptcy, and not only by the later actual adjudication of bankruptcy. The vesting of the debtor’s property in the trustee which occurred on adjudication was automatic; . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.186762
An application was made for the appointment of administrators with retrospective effect.
Held: ‘there are two separate questions. The first question is whether an administration order should be made at all. This requires both the satisfaction of the two conditions set out in paragraph 11 (which alone enable the court to make an order) and a decision by the court that it is appropriate to make an order – as at the date when the order is made. The second question is (under paragraph 13(2)(a)) as to the time at which the administration order ‘takes effect’. These questions should not be confused.’ The only purpose in making an order now, with the administration effectively complete, would be to allow the administrator to collect his fees. That was not one of the statutory purposes of an administration, and so the court did not have jurisdiction to make an administration order now. Given the conflicting decisions however, it was a matter where consent to appeal should be given.
Norris J
[2011] EWHC 2543 (Ch), [2011] BCC 957
Bailii
Insolvency Act 1986
England and Wales
Citing:
Cited – In re G-Tech Construction Limited ChD 29-Sep-2005
In appointing the administrators, the wrong form had been used. The court was asked to use its powers to cure the mistake. The failure to file the correct form was overlooked, with the result that one of the prerequisites of an appointment taking . .
Cited – Minmar (929) Ltd and Another v Khalatschi and Another ChD 8-Apr-2011
Application was made to set aside the appointment of the company’s administrators. . .
Cited – In re Derfshaw Ltd and Others ChD 2-Jun-2011
The court considered applications for administration orders made by six companies at the instigation of directors of those companies, and the appointment of administrators with retrospective effect.
Held: Morgan J said that he could see scope . .
Cited – In re Blights Builders Ltd ChD 2-Oct-2006
An out of court appointment of joint administrators of the company, a one-man building company, had been made by the principal shareholder’s executors at a time when, unknown to them, a creditor’s petition for the winding up of the company had . .
Cited – Hill v Stokes plc ChD 2010
The court approved the appointment of a company administrator with reprospective effect. . .
Cited – Morris v Kanssen HL 1946
The House considered the effect of provisions relating to the acts of directors in the 1929 Act. Lord Simonds said: ‘There is, as it appears to me, a vital distinction between (a) an appointment in which there is a defect or, in other words, a . .
Cited – In re Kaupthing Capital Partners ChD 2010
. .
Cited – In re Frontsouth (Witham) Ltd and Another ChD 30-Jun-2011
The court was asked to make a retrospective appointment of a company administrator.
Held: Henderson J (in a reserved judgement) said that he shared Morgan J’s misgivings, but like him regarded the jurisdiction as a useful one and was prepared . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 01 November 2021; Ref: scu.445047
The guarantor of an original tenant under the lease remains liable after the disclaimer the lease on insolvency. The disclaimer operates to determine the lease altogether with the result that the landlord’s reversion is accelerated. ‘In order to determine these rights and obligations it is necessary, in the nature of things, that the landlord’s obligations and rights, which are the reverse side of the tenant’s rights and obligations, must also be determined. If the tenant’s liabilities to the landlord are to be extinguished, of necessity so also must be the landlord’s rights against the tenant. The one cannot be achieved without the other. Disclaimer also operates to determine the tenant’s interests in the property, namely the lease. Determination of a leasehold estate has the effect of accelerating the reversion expectant upon the determination of that estate. The leasehold estate ceases to exist.’ Prospective overruling was not yet a principle known in English law.
Lord Nicholls of Birkenhead
Gazette 27-Mar-1996, Times 23-Feb-1996, [1997] AC 70, [1996] 1 All ER 737, [1996] 2 WLR 262, [1996] BPIR 595, [1996] 1 EGLR 94, [1996] 2 BCLC 234, [1996] NPC 28, [1996] UKHL 19, [1996] BCC 636, [1996] 15 EG 103, [1996] EG 32
Bailii
England and Wales
Citing:
Appeal from – Hindcastle Ltd v Barbara Attenborough Associates Ltd and Others CA 6-Jul-1994
A disclaimer of a lease on insolvency of the tenant leaves the original Tenant and his Security or guarantor liable as well as any intermediate assignees. ‘In order to determine these rights and obligations it is necessary, in the nature of things, . .
Overruled – Stacey v Hill CA 1901
The surety for performance of the tenant’s covenants under the lease which was ‘to remain in force concurrently with the lease for a period of five years’ was discharged by the disclaimer of the lease by the insolvent tenant’s liquidator. The lease . .
Cited by:
Cited – In Re Park Air Services Plc; Christopher Moran Holdings Ltd v Bairstow and Another HL 4-Feb-1999
The tenant company went into liquidation, the receiver disclaimed the lease, and the landlord claimed compensation under the Act. The question concerned how the compensation was to be calculated.
Held: Where a solvent tenant under an onerous . .
Cited – Park Air Services Plc; Christopher Moran Holdings Limited v Bairstow and Ruddock CA 1-May-1997
If a lease is determined or treated as determined in a winding up or in a bankruptcy, the landlord is entitled to prove in principle for all the rent and other payments which he would have been entitled to recover from the tenant for the residue of . .
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 – Shaw v Doleman CA 1-Apr-2009
The landlord had taken a guarantee of the lease from the tenant when granting a licence to assign to the new tenant. That new tenant had become insolvent and the liquidator had disclaimed the lease. The court considered the position under Hindcastle . .
Cited – Basch v Stekel and Another CA 25-Jul-2000
The deceased had given a guarantee of the tenant’s covenant given by his company under a lease. The court was asked whether the obligations under the guarantee survived his death after he company was wound up.
Held: Chadwick LJ explained the . .
Cited – Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd SC 3-Jul-2013
Virgin Atlantic Airways Ltd sought to recover damages exceeding 49,000,000 pounds for the infringement of a European Patent which did not exist in the form said to have been infringed. The Technical Board of Appeal of the European Patent Office had . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.81389
The appellant sought to recover overpayments of benefits and Social Fund Loans, after the respondent had had a Debt relief order.
Held: The Secretary of State’s appeal failed. The ‘net entitlement principle’ argued for did not exist. The entitlement is a statutory one, and any liability to repay is separate and independent, being only a remedy in respect of a debt. There was no effective difference in this context between a Debt Relief Order and bankruptcy.
Lady Hale said: ‘the power to recover the debt by deduction from benefit is a ‘remedy in respect of the debt’. Moreover, if self-help remedies such as this were not included in the concept of a ‘remedy’, it is difficult to see why both section 251G(2)(b) and section 285(3)(b) specifically prohibit the use of court proceedings to enforce the debt. They would be otiose if the only remedies contemplated by the prohibition of any remedy were court proceedings. There is no sense in a scheme which prohibits recovery of the liability by one method but allows it by another.’
Lady Hale, Lord Brown, Lord Mance, Lord Kerr, Lord Wilson
[2012] PTSR 310, [2012] 2 WLR 1, [2012] BPIR 224, [2012] 2 AC 1, [2012] 2 All ER 46, UKSC 2011/0007, [2011] UKSC 60
Bailii Summary, SC Summary, SC, Bailii
Insolvency Act 1986 251G(2)(a), Social Security Administration Act 1992 71(1), Social Security Act 1998 9 10, Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 15
England and Wales
Citing:
At first Instance – Payne and Another, Regina (on The Application of) v Secretary of State for Work and Pensions Admn 26-Jul-2010
The court was asked as to the lawfulness of the Secretary of State making deductions from ongoing social security benefit to recover the overpayment of incapacity benefit and the repayment of a social fund budgeting loan during the moratorium period . .
Appeal from – Secretary of State for Work and Pensions v Payne and Another CA 14-Dec-2010
Appeal by Secretary of State against judicial review finding unlawful the deductions made from the claimants’ social security benefit allowances after the claimants Debt Relief Order had come to an end.
Held: The appeal failed. . .
Cited – Bendall v McWhirter CA 1952
The trustee in the husband’s bankrupty, by virtue of his statutory position, was subject to the same special restriction as would prevent the husband himself from evicting his wife.
The deserted wife had a personal licence to occupy the former . .
Cited – Bradley-Hole v Cusen CA 1953
The creditor was a tenant of rent-controlled premises who had been charged too much rent by his landlord. The bankrupt landlord’s trustee argued that the claim in respect of overpaid rent had been converted into a right to prove the debt in the . .
Approved – Secretary of State for Work and Pensions v Balding CA 13-Dec-2007
The Secretary of State appealed a decision that its reclaim of overpayments of benefit were no longer possible after the discharge from insolvency of the claimant. The overpayment had been reclaimed before bankruptcy.
Held: At the time of the . .
Cited – Mulvey v Secretary of State for Social Security HL 20-Mar-1997
The appellant had had repayable awards from the social fund and also income support benefit. Deductions were made from the benefit to repay the awards. Her estate was sequestrated. She argued that the awards should no longer be deducted.
Held: . .
Cited – National Provincial Bank v Ainsworth HL 13-May-1965
The respondent stayed on in the family home owned by her husband after he had left, and resisted a possession order sought by the chargee. The husband had charged the house as security for his business debts.
Lord Wilberforce described the . .
Cited – Regina v Secretary of State for Social Security, Ex parte Taylor and Chapman ChD 5-Feb-1996
The applicants were in turn the recipient of a Social Fund loan and a claimant who had been overpaid benefit. Both were later declared bankrupt. The Secretary of State then began to recover the loan and overpayment by deduction from their current . .
Cited – Mulvey v Secretary of State for Social Security IHCS 24-Nov-1995
The claimant had first been granted a loan from the Social Fund. After her bankruptcy, the benefits loan was recoverable from benefits even after the bankruptcy if the loan was not proved in the bankruptcy. The right to recover by deduction was but . .
Lists of cited by and citing cases may be incomplete.
Benefits, Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.465940
The landlord had taken a guarantee of the lease from the tenant when granting a licence to assign to the new tenant. That new tenant had become insolvent and the liquidator had disclaimed the lease. The court considered the position under Hindcastle after the 1995 Act.
Held: The guaranteer’s appeal succeeded. The effect of the 1995 Act was to preserve the obligation so far as third party obligations were concerned, and therefore the guarantor’s obligations survived the disclaimer.
Lord Justice Mummery, Lord Justice Stanley Burnton and Lord Justice Elias
[2009] EWCA Civ 279
Bailii, Times
Landlord and Tenant (Covenants) Act 1995, Insolvency Act 1986 178(4)
England and Wales
Citing:
Cited – Stacey v Hill CA 1901
The surety for performance of the tenant’s covenants under the lease which was ‘to remain in force concurrently with the lease for a period of five years’ was discharged by the disclaimer of the lease by the insolvent tenant’s liquidator. The lease . .
Cited – Hindcastle Ltd v Barbara Attenborough Associates Ltd and Others HL 22-Feb-1996
The guarantor of an original tenant under the lease remains liable after the disclaimer the lease on insolvency. The disclaimer operates to determine the lease altogether with the result that the landlord’s reversion is accelerated. ‘In order to . .
Cited – Basch v Stekel and Another CA 25-Jul-2000
The deceased had given a guarantee of the tenant’s covenant given by his company under a lease. The court was asked whether the obligations under the guarantee survived his death after he company was wound up.
Held: Chadwick LJ explained the . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Insolvency
Updated: 01 November 2021; Ref: scu.330951
The court was asked ‘What relation should the costs and remuneration bear to the circumstances, and in particular the size, of the bankruptcy?’ The bankrupt had considered that the costs first awarded to the trustee in bankruptcy and the trustee’s solicitors were disproportionate. On appeal they had been reduced, but he appealed again seeking a further reduction.
Held: The appeal failed. The stage has been reached where a court hearing an application to fix or to challenge the remuneration of an office-holder should proceed on the basis that the Practice Statement is to be applied, except in so far as in the circumstances of the particular case the party objecting to its application shows that it would be wrong in principle to do so. On this basis: ‘ the principles set out in the Practice Statement should have been expressly applied, but I do not consider that this omission provides a ground on which this appeal should be allowed. Judge Behrens applied what were fundamentally the relevant criteria to the facts of this case. He examined in some detail, with the benefit of the assessors, the remuneration claimed and the work done, in terms of value more than time, bearing always in mind the need to arrive at a figure which was proportionate to the circumstances of the bankruptcy. It was not open to the Judge wholly to disregard the time spent by the trustee, both because it is a relevant, but not decisive, factor in any case and because the basis of the trustee’s remuneration had been fixed at the meeting of creditors as ‘time properly given’. Equally, however, this basis of remuneration does not absolve the trustee from scrutiny of his remuneration, as required by the word ‘properly’. Time is properly spent if it meets the criteria set out in the Practice Statement, applied with regard to all the circumstances of the case.’
Though the judge should have made express reference to and placed reliance upon the Practice Statement, in this case he had applied the correct principles and the appeal failed. The size of the assets is not the only consideration, and here the bankrupt’s own failure to make progress on the annulment had added to the costs.
Sir David Richards said: ‘The duties of an office-holder are not confined to the realisation and distribution of assets. There are statutory duties which must be performed, such as communicating with creditors and reporting on the events leading to the insolvency, with particular regard to the conduct of the bankrupt or directors of an insolvent company. The office-holder may need to investigate the existence of possible assets or the merits of possible claims, which may in the event not lead to assets available for distribution, although in all cases the office-holder will be expected to exercise commercial judgment in pursuing such matters.’
and ‘the stage has been reached where a court hearing an application to fix or to challenge the remuneration of an office-holder should proceed on the basis that the Practice Statement is to be applied, except in so far as in the circumstances of the particular case the party objecting to its application shows that it would be wrong in principle to do so. In my judgment, the statement of guiding principles in the Practice Statement is a correct statement of the principles generally applicable to issues relating to the remuneration of office-holders, although the particular circumstances of a case might call for the formulation of a further principle.
Arden, Black LJJ, David Richards J
[2011] BPIR 583, [2011] EWCA Civ 331, [2011] NPC 34, [2011] 4 Costs LR 622, [2011] BCC 423, [2012] 1 WLR 419, [2012] 1 BCLC 379, [2011] 3 All ER 743
Bailii
Insolvency Rules 1986 6.138(1), Practice Statement: The Fixing and Approval of the Remuneration of Appointees (2004)
England and Wales
Citing:
Cited – In Re Independent Insurance Co Ltd (No 2) 2003
Ferris J was required to consider the insolvency office-holders’ remuneration, assisted by a solicitor with wide insolvency experience, whose report sets out the general principles then accepted by the insolvency profession as the yardstick for . .
Cited – Upton v Taylor and Colley 1999
Where it is always clear that there will be a surplus after creditors have been paid in full, the creditors have little or no commercial interest in the liquidator’s remuneration. . .
Cited – Simion v Brown ChD 14-Mar-2007
Remuneration of trustee – amount claimed exhausting assets realised. The court approved and applied the Practice Statement 2004. David Richards J said: ‘The task for the court is to arrive at a level of remuneration which balances the various . .
Cited – Hunt v Yearwood-Grazette ChD 7-Apr-2009
The bankrupt wished to discharge his bankruptcy debt, but challenged the trustee’s fees.
Held: The court approved application of the Practice Statement 2004.
Proudman J said: ‘The court’s task is to balance all the various criteria, . .
Cited – Secretary of State for Communities and Local Government v Bovale Ltd and Another CA 11-Mar-2009
The applicant had sought to quash a refusal of its plannng application. An order had been made for the service of evidence, and the judge had set down an order which was expressed to be of more general application. The Secretary of State now . .
Cited – Jacob and Another v UIC Insurance Company Ltd and Another ChD 2-Nov-2006
. .
Cited – Re Super Aguri F1 Ltd 2011
. .
Cited – Barker v Bajjon 2008
. .
Cited – Mirror Group Newspapers Plc v Maxwell and Others (No 2) ChD 15-Jul-1997
The Court reminded insolvency practitioners of fiduciary duties to creditors when refusing application for further payment on account of costs. Ferris J considered the principles applicable to fixing the remuneration of receivers of the estate of . .
Cited – In Re Carton Ltd 1923
The court considered the remuneration of a liquidator in a voluntary liquidation.
Held: The court refused to authorise remuneration at an unusually generous percentage rate, which had been approved by the committee of inspection, on the . .
Cited – In Re Cabletel Installations Ltd 1-Jul-2004
The court criticised the remuneration claimed by the insolvency office-holder were work had been carried out at too senior a level, and the calculation was an uncritical application of the time spent, and where there were more and lengthier meetings . .
Cited – Freeburn v Hunt 2010
. .
Cited – Home Office v Lownds (Practice Note) CA 21-Mar-2002
The respondent had been ordered to pay costs of over pounds 16,000 in an action for clinical negligence where the final award was only pounds 4,000. The Secretary of State appealed claiming that the costs were disproportionate.
Held: In such . .
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, Costs
Updated: 01 November 2021; Ref: scu.430847
Application to commit the Respondent to prison for breaches of various provisions of the Insolvency Act which are said to constitute deliberate, repeated, and serious contempt of court.
Held: Such applications should be dealth with under CPR r81.15 in Chancery. Statements obtained under compulsion via Section 433 might be set against the bankrupt without infringing his privilege against self incrimination.
Gloster DBE LJ, Andrews DBE J
[2017] EWHC 3126 (Admin), [2017] WLR(D) 803
Bailii, WLRD
Insolvency Act 1986 433(1)
England and Wales
Insolvency
Updated: 01 November 2021; Ref: scu.602596
Administrators of the claimant company asserted that the company had held informal leases of two hangars owned by the defendant, and also complained of their transfer at an undervalue. The first defendant said that the occupations were under license only.
Held: The occupation, having the characteristics of a tenancy, was in fact a tenancy. As to termination, in the case of an implied periodic tenancy, the length of notice required to be given to bring the tenancy to an end will depend upon the period by reference to which the rent is calculated. In addition, in the case of a business tenancy, the 1954 Act confers further protection for the business tenant, requiring a special notice to be served under section 25 of that Act. This was an annual tenancy since that had been the basis of calculation of the rent.
The second defendant had not acted in good faith in her transaction, and had acted with no reasonable grounds for believing that the transaction would be for the benefit of the company under section 238(5)(b) of the 1986 Act..
Sales J
[2011] EWHC 2238 (Ch), [2011] BPIR 1405
Bailii
Insolvency Act 1986 238(5)(b), Landlord and Tenant Act 1954 25
England and Wales
Citing:
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 – London and Associated Investment Trust Plc v Calow 1986
The defendants had sought premises for a consulting business. A licence was initially given to allow the premises to be prepared for occupation, but then a head lease was granted. An underlease for the defendant was prepared, but not executed. On . .
Cited – J A Pye (Oxford) Ltd and Another v Caroline Graham and Another CA 6-Feb-2001
Where a tenant under a grazing license had stayed over after the end of the tenancy, and had been refused a renewed licence, and had continued to graze the land for over twelve years, the mere overstaying was not enough to evidence an animus . .
Cited – QFS Scaffolding Ltd v Sable and Another CA 17-Jun-2010
The parties disputed whether a lease from S to LDC had been surrendered. S and QFS were negotiating for a renewal lease. No new lease having been agreed the parties agreed to a monthly sum to be paid pending agreement. L then let to a third party . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Insolvency
Updated: 01 November 2021; Ref: scu.443241
The Government of India sought to prove in the voluntary liquidation of a company registered in the United Kingdom but trading in India for a sum due in respect of Indian income tax, including capital gains tax, which arose on the sale of the company’s undertaking in India.
Held: The claim was not maintainable because it was a claim by the Government of India to recover tax. English law generally does not permit either the direct or indirect enforcement of foreign revenue laws. The House considered two explanations of this rule.
Lord Keith of Avenholm said: ‘One explanation of the rule thus illustrated may be thought to be that enforcement of a claim for taxes is but an extension of the sovereign power which imposed the taxes, and that an assertion of sovereign authority by one State within the territory of another, as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties. Another explanation has been given by an eminent American judge, Judge Learned Hand, in the case of Moore v Mitchell, in a passage, quoted also by Kingsmill Moore J. in the case of Peter Buchanan Ltd as follows: ‘While the origin of the exception in the case of penal liabilities does not appear in the books, a sound basis for it exists, in my judgment, which includes liabilities for taxes as well. Even in the case of ordinary municipal liabilities, a court will not recognize those arising in a foreign State, if they run counter to the ‘settled public policy’ of its own. Thus a scrutiny of the liability is necessarily always in reserve, and the possibility that it will be found not to accord with the policy of the domestic State. This is not a troublesome or delicate inquiry when the question arises between private persons, but it takes on quite another face when it concerns the relations between the foreign State and its own citizens or even those who may be temporarily within its borders. To pass upon the provisions for the public order of another State is, or at any rate should be, beyond the powers of the court; it involves the relations between the States themselves, with which courts are incompetent to deal, and which are entrusted to other authorities. It may commit the domestic State to a position which would seriously embarrass its neighbour. Revenue laws fall within the same reasoning; they affect a State in matters as vital to its existence as its criminal laws. No court ought to undertake an inquiry which it cannot prosecute without determining whether those laws are consonant with its own notions of what is proper.’
Viscount Simonds stated the duty of a liquidator in assessing a proof of debt: ‘I conceive that it is the duty of the liquidator to discharge out of the assets in his hands those claims which are legally enforceable, and to hand over any surplus to the contributories. I find no words which vest in him a discretion to meet claims which are not legally enforceable. It will be remembered that, so far as is relevant for this purpose, the law is the same whether the winding up is voluntary or by the court, whether the company is solvent or insolvent, and that an additional purpose of a winding up is to secure that creditors who have enforceable claims shall be treated equally, subject only to the priorities for which the statute provides.’
Lord Keith of Avonholm, Viscount Simonds
[1955] AC 491, [1955] 1 All ER 292, (1955) 27 ITR 356
England and Wales
Citing:
Approved – 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 – King of the Hellenes v Brostrom 1923
Rowlatt J said: ‘It is perfectly elementary that a foreign government cannot come here — nor will the courts of other countries allow our government to go there — and sue a person found in that jurisdiction for taxes levied and which he is . .
Cited by:
Cited – QRS 1 APS and others v Frandsen CA 21-May-1999
The appellants were all Danish companies put into liquidation for asset stripping in contravention of Danish law. The respondent was resident in the UK and had owned them. The Danish tax authorities issued tax demands and the liquidators now sought . .
Approved – In re State of Norway’s application (Nos 1 and 2) HL 1989
The House considered an application by a foreign state seeking assistance in obtaining evidence here to be used in enforcing its own revenue laws at home.
Held: Rule 3 of the Convention encapsulated a ‘fundamental rule of English Law’, but did . .
Cited – Williams and Humbert Ltd v W and H Trade Marks (Jersey) Ltd HL 1986
There had been an expropriation by Spanish decrees of shares in a Spanish company whose English subsidiary had rights in trade marks which it had sold to a Jersey company. The Spanish and English companies sought certain relief in relation to the . .
Cited – Mbasogo, President of the State of Equatorial Guinea and Another v Logo Ltd and others CA 23-Oct-2006
Foreign Public Law Not Enforceable Here
The claimant alleged a conspiracy by the defendants for his overthrow by means of a private coup d’etat. The defendants denied that the court had jurisdiction. The claimants appealed dismissal of their claim to damages.
Held: The claims were . .
Cited – Mbasogo, President of the State of Equatorial Guinea and Another v Logo Ltd and others CA 23-Oct-2006
Foreign Public Law Not Enforceable Here
The claimant alleged a conspiracy by the defendants for his overthrow by means of a private coup d’etat. The defendants denied that the court had jurisdiction. The claimants appealed dismissal of their claim to damages.
Held: The claims were . .
Cited – Iran v The Barakat Galleries Ltd QBD 29-Mar-2007
The claimant government sought the return to it of historical artefacts in the possession of the defendants. The defendant said the claimant could not establish title and that if it could the title under which the claim was made was punitive and not . .
Cited – Revenue and Customs and Another v Ben Nevis (Holdings) Ltd and Others ChD 20-Jul-2012
The claimant sought to make arrangements with a view to collecting substantial arrears of tax due to South Africa. The revenue said that it had that power by virtue of the double taxation treaty with South Aftrica. The company replied that the . .
Cited – Belhaj and Another v Straw and Others SC 17-Jan-2017
The claimant alleged complicity by the defendant, (now former) Foreign Secretary, in his mistreatment by the US while held in Libya. He also alleged involvement in his unlawful abduction and removal to Libya, from which had had fled for political . .
Lists of cited by and citing cases may be incomplete.
Taxes Management, International, Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.225456
Parties had entered into a bunker supply contract which contained a retention of title clause in favour of the supplier. It purported to allow the buyer to use the goods before title came to be passed.
Held: The owner’s appeal failed. It did not fall within the scope of the 1979 Act, and therefore the buyer could not rely on section 49 to withhold payment in the event that valid title was not passed.
Held: The owner’s appeal failed. The Court was being asked three questions:
Was the contract a contract of sale within section 2 of the 1979 Act. If not, then was OWB obliged via an implied term to perform is obligations by paying timeously, and third, was Wilson to be overruled.
Held: ‘ on the assumed facts:
(i) the contract between OWBM and the Owners was not one of sale, but sui generis;
(ii) that it was not subject to any such implied term or terms, regarding performance by OWBM (or OWBAS) of any supply contract higher up the chain, as the Owners have alleged – though it was no doubt subject to an implied promise by OWBM that OWBM was entitled (in consequence of whatever were the arrangements under which the bunkers had been obtained directly or indirectly from whoever was interested in them) to supply them to the Owners on terms permitting their use for the propulsion of the vessel before payment; and
(iii) that the Owners have no defence to OWBM’s claim to the agreed price.’
Lord Neuberger, President, Lord Mance, Lord Clarke, Lord Hughes, Lord Toulson
[2016] UKSC 23, [2016] AC 1034, [2016] 2 WLR 1193, [2016] 3 All ER 879, [2017] 1 All ER (Comm) 1, [2016] WLR(D) 257, [2016] BPIR 973, [2016] 1 Lloyd’s Rep 589
Bailii, Bailii Summary
Sale of Goods Act 1979 49
England and Wales
Citing:
At ComC – PST Energy 7 Shipping Llc and Another v OW Bunker Malta Ltd and Another (Res Cogitans) ComC 14-Jul-2015
The OW Bunker Group had gone into insolvency. Purchasers from them were no concerned at the possibility, under the industry standard tersm, of having to pay twice.
Held: The owners’ appeal from the arbitration award failed.
The court . .
At CA – PST Energy 7 Shipping Llc Product Shipping and Trading SA v OW Bunker Malta Ltd and Others CA 22-Oct-2015
The oil owners had contracted for its transport with OWBM aboard Res Cogitans under standard terms which would allow the captain to use the oil for navigation before transfer of the title in the oil. The court was now asked whether the agreement . .
Cited – Borden (UK) Ltd v Scottish Timber Products Ltd CA 1979
The plaintiff sold a quantity of resin to the defendant for use in the manufacture of chipboard. The contract contained a reservation of title clause, but both parties contemplated that the resin would be used in the process of production before it . .
Cited – Harry and Garry Ltd v Jariwalla CA 1988
English buyers, Harry and Garry, had under contracts of sale received a quantity of sarees which they found defective and in respect of which they had not yet accepted the relevant bills of exchange, by reference to which, it appeared, the Indian . .
Cited – Armour v Thyssen Edelstahlwerke AG HL 1990
The defendant supplied steel to a manufacturing company under a contract which contained a retention of title clause. The contract was governed by German law. The plaintiffs, who had been appointed as receivers, brought proceedings against the . .
Cited – Forsythe International (UK) Limited v Silver Shipping Co Limited and Others 1993
Delivery under section 24 requires a voluntary act by the person in possession because by section 61(1) of the 1979 Act, unless the context or subject matter otherwise requires, `delivery’ means `voluntary transfer from one person to another’. . .
Cited – Chaigley Farms Ltd v Crawford, Kaye and Grayshire Ltd 1996
The Court was asked as to the title to livestock delivered by the plaintiff farmers to an abattoir under a contract containing a retention of title clause and title to the carcasses following slaughter. One question which arose was whether the . .
Cited – Otis Vehicle Rentals Ltd v Cicely Commercials Ltd CA 30-Jan-2002
Leave to appeal . .
Cited – Caterpillar (NI) Ltd v John Holt and Company (Liverpool) Ltd CA 17-Oct-2013
The defendant (Holt) appealed against the grant of summary judgement given against it in a claim for non-payment of sums due under a distributorship agreement with the claimants. Goods had been agreed to be sold and were delivered by F G Wilson to . .
Cited – Angara Maritime Ltd v Oceanconnect UK Ltd and Another QBD 29-Mar-2010
The court was asked as to the application of Section 25(1) of the Sale of Goods Act 1979 when an unpaid supplier of bunkers to a time charterer claims against the owner of the vessel.
Held: The issue was whether as a matter of fact there was a . .
Cited – Stoneleigh Finance Ltd v Phillips CA 1965
The court was asked whether what purported to be a contract for the hire purchase of certain trucks was in truth an unregistered bill of sale over the trucks thereby disentitling the finance company from taking possession of the vehicles upon the . .
Cited – Otis Vehicle Rentals Ltd v Ciceley Commercials Ltd CA 12-Jul-2002
. .
Cited – Atkinson And Others, Assignees Of Sleddon, v Bell And Others 1828
A. having a patent for certain spinning machinery, received an order
from B. to have some spinning frames made for him. A. employed C. to make
the machines for B., and informed the fatter that he had so done. After the
machines had been . .
Cited – Laird v Pim and Another 18-Jan-1841
Where a party has been let into possession of lands under a contract of purchase, but does not complete the purchase, and refuses to pay the purchase-money, and no conveyance is executed, the vendors cannot recover from him the whole amount of the . .
Cited – Dunlop And Others v Grote And Booker 23-Aug-1845
The plaintiffs declared on a contract by the defendants to purchase certain iron of the plaintiff alleging a promise by the defendants, ‘that, if the delivery of the said iron should riot be required by the defendants on or before the 30th day of . .
Cited – Martineau v Kitching QBD 3-May-1872
Sugar was agreed to be sold, with the price payable ‘Prompt at one month; goods at seller’s risk for two months’, to be kept at the seller’s premises and drawn down by the buyers as wanted. After two months and after only some of the sugar had been . .
Cited – Castle v Playford Cexc 1872
The contract for the sale of ice was for cash on delivery at the rate of 20s a ton as weighed on arrival and delivery in the United Kingdom, but it was agreed that the buyer should ‘take upon himself all risks and dangers of the seas’. The vessel . .
Cited – Stein Forbes and Co v County Tailoring Co 1916
Atkin J said: ‘I doubt whether goods are appropriated unconditionally if the seller does not mean the buyer to have them unless he pays for them.’ The overriding question is whether the intention of the parties appears in the course of the making . .
Cited – Colley v Overseas Exporters 1921
Sellers brought an action for the price of goods sold on terms fob Liverpool. The buyers made five successive nominations of vessels to take delivery of the cargo but in each case the vessel was eventually unable to take the goods. No effective . .
Cited – Muller, Maclean and Co v Leslie and Anderson 1921
. .
Cited – Sempra Metals Ltd v Inland Revenue Commissioners and Another HL 18-Jul-2007
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
Cited – Plaimar Ltd v Waters Trading Co Ltd 23-Nov-1945
(High Court of Australia) it was wrong for judgment to be given for the price because ‘[t]he contract did not provide for payment for the goods on a day certain.’ . .
Cited – Minister for Supply and Development v Servicemen’s Co-operative Joinery Manufacturers Ltd 26-Apr-1951
High Court of Australia – Sale of Goods – Passing of property – Specific goods in deliverable condition – Purchaser in possession of goods as bailee – Contract of sale requiring ‘net cash before delivery’ – Seller’s right of action for price though . .
Lists of cited by and citing cases may be incomplete.
Transport, Insolvency, Contract
Updated: 01 November 2021; Ref: scu.563295
The seller sold aluminium to the defendant, but included a clause under which they retained title in the materials sold, even if mixed in with manufactured goods, until they had been paid for the metal. The defendants appealed a finding that the receivers held the proceeds of sale of the manufactured goods on trust for the plaintiffs.
Held: The appeal failed. The intention of the clause was to secure for as long as possible payment of the purchase price of the aluminium. There had to be read into the contract a duty on the defendant to act under the fiduciary relationship of principal and agent, bailor and bailee, as was contemplated in the clause. The plaintiffs could trace the proceeds of the sub-sales, and recover them.
Megaw, Roskill and Goff L.JJ
[1976] 1 WLR 676
lip
England and Wales
Citing:
Cited – In re Hallett’s Estate; Knatchbull v Hallett CA 1880
Where a trustee of a policy used money received from others to make payment of premiums on an insurance policy, they would be entitled to a lien on the policy. Where an asset was acquired exclusively with trust money, the beneficiary could either . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Company, Equity, Agency
Leading Case
Updated: 01 November 2021; Ref: scu.174733
Application by a bankrupt, for an order directing that the Second Respondent should cease acting as solicitors for both the First Respondent (‘Avonwick’) and the Third Respondents, Moore Stephens LLP, his joint trustees in bankruptcy.
Held: The appication was granted. The exercise of control of privileged information was not governed by the ownership of the paper on which it was recorded. The client’s privilege was not an ‘interest’ such as would vest in the bankrupt’s trustee. Nor would it be an adequate protection of the client’s privilege merely to grant an order restraining the solicitors from acting in certain ways.
Arnold J
[2016] EWHC 1001 (Ch), [2016] WLR(D) 241, [2017] Ch 210, [2016] 3 WLR 1330, [2016] BPIR 1012
Bailii, WLRD
Insolvency Act 1986 283(1) 311(1) 486(1)
England and Wales
Citing:
Cited – Omar’s Trustees v Omar ChD 2000
A wife and mistress (D) had conspired, after the death of the husband, to remove money in bank accounts from his estate by taking the bearer shares in the company in whose name the accounts were held. The first action, in which D was legally . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Legal Professions
Updated: 01 November 2021; Ref: scu.564150
ECJ Judicial cooperation in civil matters – Insolvency proceedings – Regulation (EC) No 1346/2000 – Temporal application – Court having jurisdiction
V. Skouris, P
Case-1/04, [2006] EUECJ C-1/04, [2006] BCC 639, [2006] ILPr 30, [2006] ECR I-701
Bailii
Council Regulation (EC) 1346/2000
Cited by:
Cited – Olympic Airlines Sa Pension and Life Assurance Scheme v Olympic Airlines Sa ChD 29-May-2012
Olympic Airlines, incorporated in Greece, but with headquarters in London, went into liquidation. The pensions scheme had been run with a deficit. The trustees no sought the winding up of the company under British law.
Held: To be an . .
Lists of cited by and citing cases may be incomplete.
European, Insolvency
Leading Case
Updated: 01 November 2021; Ref: scu.565706
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 and left IOM. The creditor said that new home was only a holiday home, and that therefore the domicile of origin revived. The judge had criticised the debtor’s veracity.
Held: The debtor had not established acquisition of a domicile of choice in Mauritius, and his domicile of origin was revived on leaving IOM. The bankruptcy court therefore had jurisdiction. The acid test on domicile was as to where the debtor’s ‘real residence’ was and ‘The judge wrongly asked himself whether Mr Henwood intended to reside permanently in Mauritius but failed to ask whether Mauritius was Mr Henwood’s chief residence. The judge made no finding as to where Mr Henwood’s chief residence was.’
Any test of chief residence is circular: ‘It cannot simply be a reference to the main home in terms of size or amenities. Nor can it be a reference to the home in which the subject spends the most time. The court has to look at the quality of the residence in order to decide in which country the subject has an intention to reside permanently. Provided that task is carried out, the chief residence in the sense that term is used in this context has in fact been identified.’
The untruths told by the debtor were attempts to direct the court to a finding that his domicile was in Mauritius: ‘The lies were therefore relevant to evaluation of the evidence as to his intention as to permanent or indefinite residence. The lies diminish the likelihood of that intention in reality because if that intention really existed there would be no need to lie in what must have been a premeditated way and on this scale.’
The court considered when it was able to review a finding of fact. In this case the judge had failed properly to reflect the importance of some facts, and the appeal court felt able to examine the facts again.
Waller LJ VP, Arden LJ, Moore-Bick LJ
[2008] EWCA Civ 577, Times 18-Jun-2008, [2008] BPIR 778
Bailii
Insolvency Act 1986 265
England and Wales
Citing:
Cited – Datec Electronics Holdings Ltd and others v United Parcels Services Ltd HL 16-May-2007
The defendants had taken on the delivery of a quantity of the claimant’s computers. The equipment reached one depot, but then was lost or stolen. The parties disputed whether the Convention rules applied. UPS said that the claimant had agreed that . .
Cited – Assicurazioni Generali Spa v Arab Insurance Group (BSC) CA 13-Nov-2002
Rehearing/Review – Little Difference on Appeal
The appellant asked the Court to reverse a decision on the facts reached in the lower court.
Held: The appeal failed (Majority decision). The court’s approach should be the same whether the case was dealt with as a rehearing or as a review. . .
Cited – Bell v Kennedy 1868
A domicile of choice in a country is been acquired immediately upon the person’s arrival in that country.
Lord Cairns, having held that it was unnecessary for him to examine the various definitions that have been given of the term ‘domicile’, . .
Cited – Wahl v Wahl 1932
A person’s citizenship does not necessarily determine his domicile. . .
Cited – In the Estate of Fuld, decd (No 3) ChD 1967
The deceased had spent relatively equal periods in two or more countries. The parties disputed his domicile.
Held: A blind adherence to foreign law can not be always expected of an English Court. The legal relationship between a person and the . .
Cited – 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 . .
Cited – Buswell v Inland Revenue Commissioners CA 1974
. .
Mentioned – Re Clore (deceased) (No. 2) 1984
. .
Cited – Mark v Mark HL 30-Jun-2005
The petitioner sought to divorce her husband. Both were Nigerian nationals, and had married under a valid polygamous marriage in Nigeria. She claimed that the courts had jurisdiction because of her habitual residence here despite the fact that her . .
Cited – In re H and R (Minors) (Child Sexual Abuse: Standard of Proof) HL 14-Dec-1995
Evidence allowed – Care Application after Abuse
Children had made allegations of serious sexual abuse against their step-father. He was acquitted at trial, but the local authority went ahead with care proceedings. The parents appealed against a finding that a likely risk to the children had still . .
Cited – Whicker v Hume HL 1858
Lord Cranworth said: ‘in these days, when the tendency of the educated and leisured classes is to become cosmopolitan – if I may use the word – you must look very narrowly into the nature of the residence suggested as a domicil of choice before you . .
Cited – Winans v Attorney-General HL 1904
A domicile of origin can only be replaced by clear cogent and compelling evidence that the relevant person intended to settle permanently and indefinitely in the alleged domicile of choice. A domicile of origin is tenacious; the character of . .
Cited – Hornal v Neuberger Products Ltd CA 1956
Proof Standard for Misrepresentation
The court was asked what was the standard of proof required to establish the tort of misrepresentation, and it contrasted the different standards of proof applicable in civil and criminal cases.
Held: The standard was the balance of . .
Cited – Inland Revenue Commissioners v Bullock CA 1976
The court was asked to decide whether the taxpayer’s house was his principal home. Buckley LJ discussed the nature of ‘residence’: ‘A man may have homes in more than one country at one time. In such a case, for the purpose of determining his . .
Cited – Inland Revenue Commissioners v Plummer HL 1-Nov-1979
Although transactions were integrated as part of a preconceived scheme which was commercially marketed and that had no other conceivable purpose than that of saving surtax, the construction of the statute compelled the acceptance of a fiscal result . .
Cited – Plummer v Inland Revenue Commissioners ChD 1987
The taxpayer had a domicile of origin in England but her family had moved to Guernsey. She remained in England principally for the purpose of completing her education. She intended when she had finished her training and had some experience working . .
Cited – Inland Revenue Commissioners v Duchess of Portland 1982
The taxpayer had homes in Quebec and in England. The court was asked to decide which was her principle residence, and in particular whether she had acquired a domicile of choice on an annual visit in 1974.
Held: Residence for the in the law of . .
Cited – Agulian and Another v Cyganik CA 24-Feb-2006
The question was whether the deceased had lost his domicile of birth and acquired one of choice when living and working in the UK for 43 years. He had retained land in Cyprus, but lived here.
Held: He had retained his domicile of birth: . .
Cited – Urquhart v Butterfield 1887
A court may find a result different from that proposed by either party where there is no admission on the issue. . .
Cited – Morgan As Attorney of Sir Peter Shaffer v Cilento, Shaffer, Shaffer, Shaffer, and Minutolo ChD 9-Feb-2004
The deceased, a playwright had moved to Australia in his last years, though he returned to and died in London. The claimants sought provision from his estate, but it was argued that he had changed domicile to Australia, and that the 1975 Act did not . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Family
Updated: 01 November 2021; Ref: scu.267998
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 and otherwise. The receivers having done the acts normally associated with a receivership.
Held: The tort of unlawful interference with contractual relations had not been made out; the alleged tortfeasor was not intending to prevent the performance of any primary obligation of the contract. Peter Gibson LJ: ‘as a matter of English law there can be no conversion of a chose in action. Historically that is obvious, the tort of conversion being derived from trover, which required averments of goods lost by their possessor and found by the defendant.’ The tort of wrongful interference with contractual relations required an intention to achieve a breach or non-performance of a contractual obligation. That had not been shown in this case.
Lord Justice Peter Gibson Lord Justice Carnwath Lord Justice Mance
[2005] EWCA Civ 106, Times 24-Feb-2005, [2005] QB 762, [2005] 2 All ER 602, [2005] BPIR 928, [2005] PNLR 27, [2005] 1 All ER (Comm) 639, [2005] BLR 245, [2005] 1 BCLC 711, [2005] 2 WLR 1174
Bailii
England and Wales
Citing:
Cited – Lumley v Gye 1853
Inducing breach of contract is a Tort
An opera singer (Miss Wagner) and the defendant theatre owner were joint wrongdoers. They had a common design that the opera singer should break her contract with the plaintiff theatre owner, refuse to sing in the plaintiff’s theatre and instead . .
Cited – Greig v Insole 1978
The court was asked whether the Test and County Cricket Board had, by passing certain resolutions, induced cricketers with contracts with World Series Cricket Pty Ltd, the plaintiff, to break those contracts. The TCCB had acted in good faith and . .
Cited – Millar and Others v Bassey and Another CA 26-Aug-1993
It was alleged that Miss Shirley Bassey had breached her contract with a record producer Dreampace (or with her own management company which had in turn contracted with Dreampace), as a result of which Dreampace had been unable to perform a contract . .
Cited – Latvian Shipping Company and Others v Stocznia Gdanska Sa CA 21-Jun-2002
A payment condition was just that and that a failure to pay entitled the seller to terminate at common law. Rix LJ said: ‘It is established law that, where one party to a contract has repudiated it, the other may validly accept that repudiation by . .
Cited – Merkur Island Corp v Laughton HL 1983
The shipowner claimants were party to a contract under which their obligation to prosecute their voyages with the utmost despatch was qualified by clauses providing for the vessel to go off hire and for charterers to have a right after 10 days to . .
Cited – Torquay Hotel v Cousins CA 17-Dec-1968
The plaintiff contracted to buy oil for his hotel from Esso. Members of the defendant trades union blocked the deliveries of oil by Esso to the Hotel because of a trade dispute they had with the management of the hotel. The hotel sued for an . .
Cited – D C Thomson and Co Ltd v Deakin CA 1952
The defendant Trades Union was alleged to have indirectly prevented a supplier from performing its contract to supply paper to the plaintiffs by inducing its members to withdraw their services from the supplier.
Held: It is a tort at common . .
Cited – Kuwait Airways Corporation v Iraqi Airways Company and Others (Nos 4 and 5) HL 16-May-2002
After the invasion of Kuwait, the Iraqi government had dissolved Kuwait airlines, and appropriated several airplanes. Four planes were destroyed by Allied bombing, and 6 more were appropriated again by Iran.
Held: The appeal failed. No claim . .
Cited – Fouldes v Willoughby 1841
The ferryman who turned the plaintiff’s horses off the Birkenhead to Liverpool ferry was guilty of conversion if he intended to exercise dominion over them, but not otherwise. Scratching the panel of a horse carriage would be a trespass, but it . .
Cited – Quinn v Leathem HL 5-Aug-1901
Unlawful Means Conspiracy has two forms
Quinn was treasurer of a Belfast butchers’ association. Leathem, who traded as a butcher, employed some non-union men, although when the union made difficulties he asked for them to be admitted to the union, and offered to pay their dues. The union . .
Cited – South Wales Miners’ Federation v Glamorgan Coal Company HL 1905
The union was accused of unlawful interference in contractual relations, and replied that their intention in calling a strike (inducing miners to break their contracts of employment) was to restrict production of coal and thereby raise its price. . .
Cited – In re Simms CA 1934
A bankrupt builder had been unable to fulfil and had abandoned his outstanding contracts. The receiver took them over and completed and earned monies under them which would not otherwise have been received.
Held: The possibility of claiming . .
Cited – Lonhro plc v Fayed HL 28-Jun-1991
The parties had competed in bidding to acquire a public company. The plaintiff alleged that the defendant had used a fraudulent misrepresentation to the Secretary of State to achieve an advantage.
Held: To establish the tort of conspiracy to . .
Cited – Meade v Haringey Borough Council 1979
The economic tort of interference with a pre-existing contractual or legal position can also protect statutory interests. . .
Cited – RCA Corporation v Pollard CA 1982
The illegal activities of bootleggers who had made unauthorised recordings of concerts, diminished the profitability of contracts granting to the plaintiffs the exclusive right to exploit recordings by Elvis Presley.
Held: The defendant’s . .
Cited – Collen v Wright 1857
The law of breach of the warranty of authority should be read to imply a remedy to an innocent third party, with whom the agent has purported without authority to make a contract or to reach a settlement of outstanding liabilities under a contract, . .
Dictum doubted – Great Atlantic Insurance Co v Home Insurance Co 1981
Lloyd J said: ‘if the principal has held out his agent as having a certain authority, it hardly lies in his mouth to blame the agent for acting in breach of a secret limitation placed on that authority’. . .
Cited – Pape v Westacott 1894
The landlord’s agent, in breach of his authority, released a licence to assign a lease taking a cheque (instead of cash) for the outstanding rent due from the existing tenant. This took place in the presence of the assignee, who did not however know . .
Cited – Phipps v Boardman CA 1965
Affirmed . .
Cited – English v Dedham Vale Properties Ltd ChD 1978
A prospective purchaser of a property had applied for planning permission in the name of the vendor without telling the vendor what it was doing.
Held: The purchaser could fairly and accurately be described, as Slade J described the purchaser, . .
Cited – Montrod Ltd v Grundkotter Fleischvertriebs GmbH CA 20-Dec-2001
A beneficiary under a letter of credit does not owe a duty of care to the applicant (not the buyer) in presenting documents under the letter of credit. . .
Cited – Massey v Sladen 1868
A bill of sale was given redeemable on demand if a floating debt were paid. No notice was required. Other cerditors made demands upon the plaintiff’s absence on his son, and seized the goods immediately.
Held: The notice required by the deed . .
Cited – Moore v Shelley PC 1883
Under a mortgage deed, the mortgagor was to remain in possession, and manage it until a default was made. Demand was made during the plaintiff’s absence and upon non-payment the person purporting to be the defendant’s agent took possession. The . .
Cited – 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 . .
Cited by:
Cited – Douglas and others v Hello! Ltd and others (No 3) CA 18-May-2005
The principal claimants sold the rights to take photographs of their wedding to a co-claimant magazine (OK). Persons acting on behalf of the defendants took unauthorised photographs which the defendants published. The claimants had retained joint . .
Appeal from – Douglas and others v Hello! Ltd and others; similar HL 2-May-2007
In Douglas, the claimants said that the defendants had interfered with their contract to provide exclusive photographs of their wedding to a competing magazine, by arranging for a third party to infiltrate and take and sell unauthorised photographs. . .
See Also – OBG Ltd and Another v Allan and others CA 21-Feb-2005
The Court reduced the amount of damages owed to the applicants to GBP 244,000 plus interest. . .
Appeal from – Douglas and others v Hello! Ltd and others; similar HL 2-May-2007
In Douglas, the claimants said that the defendants had interfered with their contract to provide exclusive photographs of their wedding to a competing magazine, by arranging for a third party to infiltrate and take and sell unauthorised photographs. . .
See Also – OBG Ltd And Others v United Kingdom ECHR 13-Nov-2009
Statement of Facts . .
See Also – OBG Ltd And Others v United Kingdom ECHR 29-Nov-2011
Admissibility . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Torts – Other
Leading Case
Updated: 01 November 2021; Ref: scu.222961
The plaintiffs sold aluminium to the defendant and by a clause in the contract retained their title in the materials sold until payment was received. The purchaser went into insolvent receivership, and the seller sought recovery of the equipment and proceeds of sale of articles made from the materials. The defendants allowed that they had been bailees of the material supplied by the plaintiffs until all debts were paid, but claimed that this was overridden by sales to bona fide purchasers.
Held: The clause showed an intention to create a fiduciary arrangement between seller and buyer, and the plaintiffs were entitled to recover the proceeds of sales to third parties.
Mocatta J
[1976] 1 WLR 676
lip
England and Wales
Citing:
Cited – King v Hutton CA 1900
‘The most compelling indicator for or against a trusteeship of an agent’s receipts is the nature of the account agreed to be kept by the agent with his principal. If, after each individual transaction or group of related transactions he effects for . .
Cited – Henry v Hammond KBD 1913
Channell J said: ‘It is clear that if the terms upon which the person receives the money are that he is bound to keep it separate, either in a bank or elsewhere, and to hand that money so kept as a separate fund to the person entitled to it, then he . .
Cited – In re Hallett’s Estate; Knatchbull v Hallett CA 1880
Where a trustee of a policy used money received from others to make payment of premiums on an insurance policy, they would be entitled to a lien on the policy. Where an asset was acquired exclusively with trust money, the beneficiary could either . .
Cited – In re Diplock’s estate CA 1948
After considering a situation in which trust money had been applied in making alterations to the property of an innocent third party but had not added to the value of the property,
Held: The origin of the equitable rules of tracing were . .
Lists of cited by and citing cases may be incomplete.
Company, Contract, Insolvency, Equity
Leading Case
Updated: 01 November 2021; Ref: scu.174718
A claim by Heritable (H) in Landsbanki’s (L) insolvency had been rejected and then withdrawn before the Icelandic court, and L now appealed against rejection of its own assertion that that Icelandic decision was binding also within its own claim against H in H’s Scottish insolvency. L’s revolving credit facility claim had been rejected, applying the Scots law principle of the balancing of accounts within an insolvency under a set-off.
Held: L’s appeal was rejected. Whilst the decision of a court within another state withing the European Economic Area had effect throughout the area, that did not bind proceedings in respect of a different company within another member state. The 2004 Regulations applied only to a claim by a company within in EEA country made in another member state. That situation did not obtain in this case, and therefore had no effect on the rules as to the mandatory choice of Scots law in the administration of H in Scotland.
Lord Hope, Deputy President, Lord Walker, Lord Kerr, Lord Reed, Lord Carnwath
[2013] UKSC 13, [2013] 1 WLR 725, 2013 SLT 634, [2013] 1 BCLC 465, [2013] 2 All ER 355, [2013] WLR(D) 85, 2013 GWD 9-202, [2013] 1 All ER (Comm) 1257, UKSC 2011/0234
Bailii, WLRD, Bailii Summary, SC Summary, SC
Credit Institutions (Reorganisation and Winding Up) Regulations 2004 5(1)(a), Council Directive 2001/24/EC
England and Wales
Citing:
At Outer House – The Winding Up Board of Landsbanki Islands Hf v Mills and Others OHCS 20-Jul-2010
The claimants had made claims in the insolvency of Landsbanki in Iceland. There had been a ruling by Landsbanki’s winding-up board in those Icelandic winding-up proceedings that to the extent that it was final and binding in Iceland, it must also be . .
Appeal from – Heritable Bank Plc (Administrators of) v The Winding Up Board of Landsbanki Islands Hf SCS 28-Sep-2011
The appellant (H) had claimed in the responder’s (L) insolvency proceedings in Iceland. Their claim had been rejected by L’s winding-up board, and then withdrawn. L then claimed in H’s own insolvency in Scotland, saying that within the EEA, and . .
Mentioned – Ross v Ross SCS 1895
The pursuer was the widow of Sir Charles Ross who died in 1883 and was succeeded by his pupil son. From then until 1893, when her son attained majority, the pursuer had acted as his sole tutor and curator. She was entitled to an annuity of . .
Cited – Adams v National Bank of Greece HL 1961
Questions of interpretation and enforcement of contracts are resolved by reference to the proper law. Although debt under a contract whose proper law is the law of another jurisdiction may, for the purposes of Scots law, be discharged by insolvency . .
Cited – Integrated Building Services Engineering Consultants Ltd (T/A Operon) v PIHL UK Ltd SCS 1-Jul-2010
In Scots law it would be inequitable for a debtor of a bankrupt to be required to pay his debt in full, while he could only get a dividend for the debt due to him by the bankrupt, but there is no consensus as to whether this principle is a species . .
Lists of cited by and citing cases may be incomplete.
Scotland, Insolvency, European
Updated: 01 November 2021; Ref: scu.471223
Mr Justice Collins
[2005] EWHC 1414 (Admin)
Bailii
England and Wales
Insolvency
Updated: 31 October 2021; Ref: scu.229062
ECJ (Judgment) Reference for a preliminary ruling – Directive 93/13/EEC – Article 7 – National rules governing insolvency proceedings – Debts arising from a consumer credit agreement – Effective judicial remedy – Point 1(e) of the annex – Disproportionate amount of compensation – Directive 2008/48/EC – Article 3(l) – Total amount of credit – Point I of Annex I – Amount of drawdown – Calculation of the annual percentage rate – Article 10(2) – Obligation to provide information – Ex officio examination – Penalty
M Ilesic P
C-377/14, [2016] EUECJ C-377/14, [2016] WLR(D) 203, ECLI:EU:C:2016:283, [2016] Bus LR 886
Bailii, WLRD
Directive 93/13/EEC 7, Directive 2008/48/EC
England and Wales
European, Insolvency
Leading Case
Updated: 31 October 2021; Ref: scu.562824
The trustee sought to have set aside as an unlawful preference, the payment of 75% of the proceeds of sale of the former matrimonial home to the bankrupt’s wife, saying that the payment had been made after the presentation of the petition. The parties had previously compromised a claim for ancillary relief in the divorce on these terms. The trustee said that under Xydhias, the compromise was not an enforceable contract. The wife argued that Xydhias was obiter and contrary to Smallman.
Held: Whilst the court might have preferred the analysis of Ward LJ in Soulsbury the issue did not exactly arise. A precondition of there being a binding agreement was that the compromise deal must in any event satisfy the ordinary principles of contract. In this case, at the appropriate time, a vital element of the agreement, relating to pension sharing, was not yet concluded. There could be no agreement to enforce, and the appeal failed.
Cooke J
[2010] EWHC 2272 (Ch), [2010] NPC 93, [2010] 3 FCR 311, [2010] BPIR 1443
Bailii
Insolvency Act 1986 284
England and Wales
Citing:
Cited – Smallman v Smallman CA 1972
An order was sought under the 1882 Act to decide the shares in which the family home was to be held. An overall agreement had been negotiated in correspondence between solicitors that W should have a half share in the proceeds of sale of the . .
Cited – Soulsbury v Soulsbury CA 10-Oct-2007
The claimant was the first wife of the deceased. She said that the deceased had promised her a substantial cash sum in his will in return for not pursuing him for arrears of maintenance. The will made no such provision, and she sought payment from . .
Cited – Xydhias v Xydhias CA 21-Dec-1998
The principles of contract law are of little use when looking at the course of negotiations in divorce ancillary proceedings. In the case of a dispute the court must use its own discretion to determine whether agreement had been reached. Thorpe LJ . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Family
Updated: 31 October 2021; Ref: scu.423813
The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The decision to appoint the provisional liquidator was maintained.
The court in the Rochdale Drinks case had now modified the test for the appointment of a provisional liquidator so that: ‘ the law now is that a judge dealing with such an application should consider it in 2 stages. The first and threshold stage is to consider whether the petitioner and applicant has demonstrated that it is likely to obtain a winding-up order on the hearing of the petition. Any views the judge may express about that will of course be provisional, because the petition itself is not being tried at the time of the application. If such likelihood is not demonstrated, it would not, at least ordinarily, be right to appoint a provisional liquidator. If on the other hand it is demonstrated, and the threshold thus crossed, then the second stage is to consider whether in the circumstances of the particular case, it is – as a matter of judicial discretion – right that a provisional liquidator should be appointed (or, where as here one has already been appointed, should be maintained in office) pending the hearing of the petition.’
The Revenue had satisfied the court that ‘both:
(a) there was fraudulent evasion of VAT connected (at whatever stage) to the Company’s purchases during the relevant 12 months, and
(b) the Company, in the person of Holly Sawyer, either knew that its purchases during that period were connected with the fraudulent evasion of VAT, or should have known that the only reasonable explanation for the circumstances in which they took place was that they were so connected or ignored obvious inferences to that effect from the facts and circumstances in which the Company had been trading’ and ‘the evidence in this case does raise real questions as to the integrity of the Company’s management, and the quality of the Company’s business documentation, and accounting and record keeping functions.’ Both stages of the test were satisfied.
John Randall QC
[2013] EWHC 1583 (Ch)
Bailii
Insolvency Act 1986 122(1)(e) 123
England and Wales
Citing:
Cited – Revenue and Customs v Rochdale Drinks Distributors Ltd CA 13-Oct-2011
The revenue appealed against refusal of its petition for the winding up of the company for non-payment of a VAT assessment. The company said that the assessment was disputed. The revenue said that the company had been run for the purpose of . .
Cited – Re Union Accident Insurance Co Ltd ChD 1972
A provisional liquidator cannot be appointed on a baseless petition. There are two conditions to be met. The first was that the petition must disclose a prima facie case, the second was that there were circumstances that require that a provisional . .
Cited – The Niedersachsen ChD 1983
In order to obtain, or to enlarge a freezing order, the applicant must show that in considering the evidence as a whole he has, at a minimum, a ‘good arguable case’, and also the existence of a real risk of dissipation or secretion of assets. . .
Cited – Mobilx Ltd and Others v HM Revenue and Customs; Blue Sphere Global Ltd v Same and similar CA 12-May-2010
Each company sought repayment of input VAT. HMRC refused, saying that the transactions were the end-product of a fraud on it, and that even if the taxpayer did not know that a fraud was involved, it should have been aware that one was and acted . .
Cited – Axel Kittel v Belgian State; Belgian State v Recolta Recycling SPRL ECJ 6-Jul-2006
ECJ Sixth VAT Directive – Deduction of input tax – ‘Carousel’ fraud – Contract of sale incurably void under domestic law.
The right of a taxpayer to deduct Input Tax may be refused if: ‘it is ascertained, . .
Cited – Commissioners of Customs and Excise v Anglo German Breweries Limited ChD 29-Nov-2002
The respondents appealed against imposition of assessments for the diversion of alcohol products from bonded warehouses without payment of duties. Pretence had been made of deliveries abroad, but the goods were later diverted. The company was . .
Cited – The Commissioners for Customs and Excise, The Arena Corporation Limited v The Arena Corporation Limited / Schroeder ChD 12-Dec-2003
. .
Cited – Customs and Excise v Anglo Overseas Ltd ChD 5-Oct-2004
. .
Cited – In re The Arena Corporation Limited; Commissioners for Customs and Excise v The Arena Corporation Limited; the Arena Corporation Limited v Schroeder CA 25-Mar-2004
Sir Andrew Morritt V-C said that in the context of winding up proceedings the test for whether there is a genuine triable issue in a disputed claim, is whether the debt is bona fide disputed on substantial grounds, which, for practical purposes, is . .
Cited – HM Customs and Excise v Jack Baars Wholesale, Baars, and Baars CmpC 16-Jan-2004
. .
Cited – Re Autotech Design Ltd, HMRC v Autotech Design Ltd ChD 2006
Michael Briggs QC summarised the approach to be adopted by the court at the hearing of for the appointment of an interim liquidator pending the hearing of an insolvency petition brought by the Revenue: ‘Although the formulations of the approach to . .
Cited – Red 12 Trading Ltd v Revenue and Customs ChD 20-Oct-2009
Appeal against refusal to allow reclaim of input tax in case of alleged ‘Missing Trader Intracommunity Fraud’.
Held: Christopher Clarke J said: ‘Examining individual transactions on their merits does not, however, require them to be regarded . .
Cited – Payless Cash and Carry Ltd v Patel and Others ChD 29-Jul-2011
The claimant company, in liquidation, claimed large sums from the first defendant as a director who wrongfully and fraudulently caused it to incur a liability to HMRC for wrongfully claimed input tax on various liquor purchases.
Held: Mann J . .
Lists of cited by and citing cases may be incomplete.
Insolvency, VAT, Company
Leading Case
Updated: 31 October 2021; Ref: scu.510872
The creditor was a tenant of rent-controlled premises who had been charged too much rent by his landlord. The bankrupt landlord’s trustee argued that the claim in respect of overpaid rent had been converted into a right to prove the debt in the bankruptcy, and that therefore any other method of recovery was barred.
Held: The trustee’s argument was rejected. The property passed to the trustee ‘in the same plight and condition in which it was in the bankrupt’s hands’ and that included the right of the tenant to live there rent free until the overpaid rent had been recouped. The tenant’s rights included the right to be considered as having paid rent in advance up to the amount of the excess. A tenant’s right under the statute to deduct earlier overpayments of rent from a future rent payable by him was not an ordinary case of set-off and could continue to be exercised after the bankruptcy of the landlord.
Jenkins LJ
[1953] 1 QB 300, [1953] 1 All ER 87
Increase of Rent and Mortgage Interest (Restrictions) Act 1920 14(1)
England and Wales
Cited by:
Cited – Mulvey v Secretary of State for Social Security HL 20-Mar-1997
The appellant had had repayable awards from the social fund and also income support benefit. Deductions were made from the benefit to repay the awards. Her estate was sequestrated. She argued that the awards should no longer be deducted.
Held: . .
Applied – Regina v Secretary of State for Social Security, Ex parte Taylor and Chapman ChD 5-Feb-1996
The applicants were in turn the recipient of a Social Fund loan and a claimant who had been overpaid benefit. Both were later declared bankrupt. The Secretary of State then began to recover the loan and overpayment by deduction from their current . .
Cited – Secretary of State for Work and Pensions v Payne and Another SC 14-Dec-2011
The appellant sought to recover overpayments of benefits and Social Fund Loans, after the respondent had had a Debt relief order.
Held: The Secretary of State’s appeal failed. The ‘net entitlement principle’ argued for did not exist. The . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Landlord and Tenant
Leading Case
Updated: 31 October 2021; Ref: scu.184748
The court considered the the jurisdiction under EU law to commence a secondary winding-up in England of a company whose main liquidation is taking place in Greece. That depended upon whether the company, registered in Greece had a sufficient ‘establishment within the UK. On its winding up, the company had a considerable shortfall in the pensions scheme.
Held: The airline did not have an establishment within the meaning of the Regulation as at 20 July 2010, and the subsequent winding-up of the airline in England, even if relevant at all, did not amount to ‘economic activity’ within the definition.
The Chancellor, had erred in overlooking the Virgos-Schmit report as an authoritative commentary on the Regulation, but also in failing to take into account that the Regulation is concerned with insolvency proceedings of all kinds: ‘ the definition of ‘establishment’ applies to secondary insolvency proceedings of any kind, even though secondary proceedings which follow the opening of main proceedings must be winding-up proceedings . . However, secondary proceedings which precede the opening of main proceedings need not be winding-up proceedings. It follows that secondary proceedings may involve forms of insolvency proceedings under which the debtor company may well seek to trade out of its difficulties. In such cases it simply is not true that the Regulation contemplates that a debtor company in secondary proceedings cannot be a trading company with outward facing market activity. ‘
Moore-Bick LJ, Sir Stephen Sedley, Sir Nernard Rix
[2013] EWCA Civ 643, [2013] Pens LR 281, [2013] WLR(D) 227, [2013] BCC 728, [2013] 2 BCLC 171, [2014] 1 WLR 1401, [2013] BPIR 663
Bailii, WLRD
Council Regulation (EC) 1346/2000
England and Wales
Citing:
Appeal from – Olympic Airlines Sa Pension and Life Assurance Scheme v Olympic Airlines Sa ChD 29-May-2012
Olympic Airlines, incorporated in Greece, but with headquarters in London, went into liquidation. The pensions scheme had been run with a deficit. The trustees no sought the winding up of the company under British law.
Held: To be an . .
Cited – Shierson v Vlieland-Boddy CA 27-Jul-2005
The debtor claimed that he could not be served with an insolvency petition, being resident in Spain.
Held: The court was to look to where was the centre of his main interests to determine whether to open insolvency proceedings. On that basis, . .
Security for costs – Trustees of Olympic Airlines Sa Pension and Life Assurance Scheme v Olympic Airlines Sa CA 25-Feb-2013
Application for security for costs of appeal agaiinst winding up order. . .
Cited – In re Stanford International Bank Ltd and Others ChD 3-Jul-2009
Sir Andrew Morritt explained the relationship of the Regulation, the Model Law, and the still earlier European Convention on Insolvency Proceedings: ‘To understand the arguments and explain my conclusion it is necessary to consider the evolution of . .
Cited – Trillium (Nelson) Properties Ltd v Office Metro Ltd ChD 9-May-2012
Winding-up petition in which the principal issue is whether or not Office Metro Limited can be wound up in this jurisdiction in the light of the fact that, despite its being an English registered company, its centre of main interest is in . .
Cited – Interedil Srl, in liquidation v Fallimento Interedil Srl, Intesa Gestione Crediti SpA ECJ 20-Oct-2011
interedill2ECJ2011
ECJ Reference for a preliminary ruling – Whether a lower court has the power to refer a question to the Court for a preliminary ruling – Regulation (EC) No 1346/2000 – Insolvency proceedings – International . .
Cited – Eurofood IFSC (Area Of Freedom, Security and Justice) ECJ 2-May-2006
ECJ Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Insolvency proceedings – Decision to open the proceedings – Centre of the debtor’s main interests – Recognition of insolvency proceedings . .
Cited by:
Appeal from – Olympic Airlines Sa Pension and Life Assurance Scheme, The Trustees of The v Olympic Airlines Sa SC 29-Apr-2015
The airline was incorporated in Greece but with an office in the UK. It became insolvent leaving a deficit in the UK employee pension scheme. The trustees of the fund sought a secondary insolvency within the UK, and now a reference to the European . .
Lists of cited by and citing cases may be incomplete.
Insolvency, European
Updated: 31 October 2021; Ref: scu.510183
Christopher Nugee QC
[2013] EWHC 881 (Ch)
Bailii
England and Wales
Cited by:
See Also – Bishop v Golstein CA 5-Feb-2014
. .
See Also – Golstein v Bishop and Another ChD 2-Sep-2016
Appeal against refusal of challenge to approval on an Individual Voluntary Arrangement. . .
See Also – Golstein v Bishop and Another ChD 7-Nov-2016
. .
Lists of cited by and citing cases may be incomplete.
Updated: 30 October 2021; Ref: scu.509264
ECJ Reference for a preliminary ruling- Social policy – Approximation of laws – Protection of employees in the event of the insolvency of their employer – Directive 2008/94/EC – Scope – Supplementary occupational pension schemes – Defined benefit and balance of costs scheme – Insufficiency of resources – Minimum level of protection – Economic crisis – Balanced economic and social development – Obligations of the Member States concerned in the event of insufficiency of resources – Liability of the Member State in the event of incorrect transposition
R. Silva de Lapuerta P
C-398/11, [2013] EUECJ C-398/11
Bailii
Directive 2008/94/EC
Updated: 27 October 2021; Ref: scu.503489
The company sought its restoration to the Register of Companies, and a backdating of the winding up.
Mr Registrar Jones
[2012] EWHC B33 (Comm)
Bailii
Companies Act 1986, Insolvency Act 1986
Updated: 27 October 2021; Ref: scu.503480
[1756] EngR 68, (1756) Amb 307, (1756) 27 ER 208 (A)
Commonlii
England and Wales
Updated: 27 October 2021; Ref: scu.377444
Mr George Bompas QC (sitting as a Deputy Judge of the High Court)
[2021] EWHC 2395 (Ch)
Bailii
Insolvency Act 1986 239
England and Wales
Updated: 27 October 2021; Ref: scu.667366
The court was asked as to ownership of documents coming into existence in the course of a receivership. The plaintiff companies had argued that all documents belonged to them because the receivers were their agents and the documents were created in the course of that agency.
Held: As between a principal and its agent, all documents prepared or received by agent belong to principal, and were to be delivered up on termination of agency on basis of ownership of them.
However, whilst the receivers were technically agents of the companies, the agency of a receiver is not an ordinary agency because it involves a tri-partite relationship in which the receiver owed duties to both the mortgagor company and the debenture holder. It determined the dispute over ownership by assessing the purpose for which the documents were created – whether as performance of one of the duties (in which case the companies could only claim ownership when the documents were created in the course of performing the duty to them to manage their affairs) or to enable them to carry out their professional duties as distinct from performance of a duty (in which case the documents were the property of the receivers).
Hoffmann LJ said that a receiver and manager ‘is no ordinary agent’ and continued: ‘Although nominally the agent of the company, his primary duty is to realise the assets in the interests of the debenture holder and his powers of management are really ancillary to that duty.’
Fox LJ discussed the nature of a receiver’s agency, saying: ‘The agency of a receiver is not an ordinary agency. It is primarily a device to protect the mortgagee or debenture holder. Thus, the receiver acts as agent for the mortgagor in that he has power to affect the mortgagor’s position by acts which, though done for the benefit of the debenture holder, are treated as if they were the acts of the mortgagor. The relationship set up by the debenture, and the appointment of the receiver, however, is not simply between the mortgagor and the receiver. It is tripartite and involves the mortgagor, the receiver and the debenture holder. The receiver is appointed by the debenture holder, upon the happening of specified events, and becomes the mortgagor’s agent whether the mortgagor likes it or not. And, as a matter of contract between the mortgagor and the debenture holder, the mortgagor will have to pay the receiver’s fees. Further, the mortgagor cannot dismiss the receiver since that power is reserved to the debenture holder as another of the contractual terms of the loan. It is to be noted also that the mortgagor cannot instruct the receiver how to act in the conduct of the receivership.’
Hoffmann, Fox LJJ
[1988] 1 WLR 1231, [1989] 1 All ER 261, (1988) 5 BCC 27, [1989] BCLC 115
England and Wales
Cited by:
See Also – Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) CA 1993
A clause entitling a mortgagee to recover legal costs from the mortgagor did not extend to costs that were unreasonably incurred or which were unreasonable in amount. Whether costs were unreasonably incurred or were unreasonable in amount was to be . .
Cited – Fairstar Heavy Transport Nv v Adkins and Another CA 19-Jul-2013
The court was asked whether the appellant company was entitled to an order requiring its former Chief Executive Officer, after the termination of his appointment, to give it access to the content of emails relating to its business affairs, and . .
Lists of cited by and citing cases may be incomplete.
Updated: 23 October 2021; Ref: scu.515262
His Honour Judge Halliwell (sitting as a Judge of the High Court)
[2021] EWHC 2610 (Ch)
Bailii
England and Wales
Updated: 23 October 2021; Ref: scu.668324
[1837] EngR 533, (1837) 1 Keen 474, (1837) 48 ER 389
Commonlii
England and Wales
Updated: 22 October 2021; Ref: scu.313650
A receiver’s powers of management are really ancillary to the duty to manage the security, the property of the mortgagee, for the benefit of the mortgagee. In the context of the agency of a receiver which is no ordinary agency but primarily a device to protect the mortgagee, the general agency principles are of limited assistance in identifying the duties owed by the receiver to the mortgagor.
Hoffmann J
[1986] 1 WLR 1301
England and Wales
Cited by:
Cited – Silven Properties Limited, Chart Enterprises Incorporated v Royal Bank of Scotland Plc, Vooght, Harris CA 21-Oct-2003
The claimants sought damages from mortgagees who had sold their charged properties as receivers. They said they had failed to sell at a proper value. They asked whether the express appointment in the mortgage of receivers as agents of the mortgagor . .
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.
Updated: 22 October 2021; Ref: scu.187043