Category: Insolvency

Leake v Loveday And Brooks: 21 Nov 1842

A in 1837 bought goods of B, and allowed B to remain in possession of them up to 1839, when B became bankrupt. B’s assignees made no claim, and B. retained possession of the goods until 1841, when the sheriff under a fi fa against B seized and sold the goods. After the sale B’s assignees gave notice of their claim to the sheriff, who upon receiving an indemnity handed over the proceeds to them. In trover brought by A against the sheriff, held :-that, under the plea of not possessed, the sheriff might set up the title of the assignees.

Citations:

[1842] EngR 1063, (1842) 4 Man and G 972, (1842) 134 ER 399

Links:

Commonlii

Insolvency

Updated: 05 May 2022; Ref: scu.308018

Pemberton v Topham: 15 Nov 1838

Commonlii In a creditor’s suit instituted by the Plaintiff on behalf of himself and all other creditors, the Defendant is entitled on motion, at any time before decree, to have the bill dismissed, on payment of the demand of the Plaintiff and his costs as between party and party; but if there be other defendants their costs must also be paid.

Citations:

[1838] EngR 936, (1838) 1 Beav 316, (1838) 48 ER 962

Links:

Commonlii

Insolvency

Updated: 05 May 2022; Ref: scu.312942

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 claimed to be due’ on the date of the vesting order. The plaintiff argued that only debts were provable and that a claim in damages was not therefore barred by the vesting order. Whilst accepted this, counsel for the defendant argued that an undertaking to deliver shares on a specified day created a provable debt because the shares would be treated as money’s worth in the amount of their value at the date for delivery.
Held: The analysis was rejected. The claim was one in damages in a sum to be measured by reference to the price of the shares at trial. They were therefore unliquidated.

Citations:

(1854) LJCP 105, [1854] EngR 177, (1854) 14 CB 327, (1854) 139 ER 134

Links:

Commonlii

Cited by:

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

Updated: 05 May 2022; Ref: scu.293034

Patrick v Shedden: 29 Apr 1853

S raised an action against P before the Lords of Session in Scotland, who dismissed the action, and found P entitled to his expenses. S appealed to the House of Lords. Pending the appeal, P petitioned the Lords of Session for decree arid interim execution, under stat, 48 G 3, c 151, s. 17, for the expences. The Lords of Session allowed the decree, pronouncing an interlocutor and interim decree for payment upon security to repay (‘caution to repeat’}in the event of a reversal of the original judgment in the House of Lords, with warrant, in failure of payment after a time named, to poind S’s goods. – Security having been given, and the time havirig expired, P now sued for the amount of the expences.
Held: The action was not maintainable, the decree for payment not being in the nature of a final judgment.

Citations:

[1853] EngR 496, (1853) 2 El and Bl 14, (1853) 118 ER 674

Links:

Commonlii

Scotland, Insolvency

Updated: 05 May 2022; Ref: scu.294482

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 firm’s moveable assets, including debts owed by English debtors, in the Dutch assignees. The English creditor had to surrender the fruits of the garnishee proceedings and prove in the Dutch bankruptcy. The Dutch curator was entitled to recover the English debt in priority to an English creditor of the merchants who had attached the debt after the bankruptcy.

Judges:

Bathurst J

Citations:

(1764) 1 H Bl 131n

Cited by:

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 – Rubin and Another v Eurofinance Sa and Others SC 24-Oct-2012
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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency, International

Updated: 05 May 2022; Ref: scu.266725

Smith (a Bankrupt) v Ian Simpson and Co (a Firm) and another: CA 24 Apr 2000

An offer to make payment of a debt which was in effect a conditional tender was not sufficient to halt the creditor’s petition on the debt. The statutory condition that the debt ‘has neither been paid nor secured or compounded’ did not include a payment which was to be avoided if the bankruptcy order was made.

Citations:

Times 24-Apr-2000

Jurisdiction:

England and Wales

Insolvency

Updated: 05 May 2022; Ref: scu.89311

Re Bishopsgate Investment Management Ltd: CA 8 Apr 1993

Serious Fraud Office can still require production of Insolvency Act 1986 interviews taken before charge from the liquidator even after he has been charged..

Citations:

Times 27-Apr-1993, Independent 08-Apr-1993

Statutes:

Criminal Justice Act 1987 2, Insolvency Act 1986 236

Jurisdiction:

England and Wales

Criminal Practice, Insolvency

Updated: 05 May 2022; Ref: scu.85729

Craiglaw Developments Ltd v Gordon Wilson and Co: IHCS 29 May 1997

The debtor had divested himself of funds pending the outcome of litigation by placing them on deposit in joint names.
Held: The interim liquidator’s appeal failed. Once the payment was made, the debtor was divested of the funds; he had nothing more to do to divest himself of the money. The provisions allowing a challenge to what appeared to be a preference applied to events within the period of six months prior to the winding up. The payment having been made before that period commenced it was effective.

Judges:

Lord Fraser, Lord Cameron of Lochbroom, Lord Murray

Citations:

Times 11-Sep-1997, 1998 SLT 1046

Statutes:

Insolvency Act 1984 243(2)

Jurisdiction:

Scotland

Insolvency

Updated: 05 May 2022; Ref: scu.79594

Bishopsgate Investment Management Ltd (in Liquidation) v Maxwell: CA 16 Feb 1993

The fundamental wrong in the directors’ acts lay in the signing of transfers of the company’s assets and not entirely in their failure properly to enquire as to the nature of other transaction. The breach of fiduciary duty lay in positive acts. Complaint was also made as to the judge’s five month delay in handing down his judgement.

Judges:

Stuart Smith LJ

Citations:

Times 16-Feb-1993, [1993] BCC 120

Jurisdiction:

England and Wales

Cited by:

Cited – Official Receiver v Wadge Rapps and Hunt (a firm) and another and two other actions HL 31-Jul-2003
(Orse In re Pantmaenog Timber Co Ltd)
The Receiver sought to use information obtained under section 236 (documents recovered from the directors’ solicitors) in disqualification proceedings.
Held: The appeal succeeded. The Act had . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 05 May 2022; Ref: scu.78424

Metalloy Supplies Ltd (In Liquidation) v MA (UK) Ltd: CA 7 Oct 1996

A costs order against liquidator of company in litigation is only rarely to be given. The court should ask who is the ‘real’ party to the litigation.
Millett LJ said: ‘[An order] may be made in a wide variety of circumstances where the third party is considered to be the real party interested in the outcome of the suit … It is not, however, sufficient to render a director liable for costs that he was a director of the company and caused it to bring or defend proceedings which he funded and which ultimately failed. Where such proceedings are brought bona fide and for the benefit of the company, the company is the real plaintiff. If in such a case an order for costs could be made against a director in the absence of some impropriety or bad faith on his part, the doctrine of the separate liability of the company would be eroded and the principle that such orders should be exceptional would be nullified. The position of a liquidator is a fortiori. Where a limited company is in insolvent liquidation, the liquidator is under a statutory duty to collect in its assets. This may require him to bring proceedings. … If he brings the proceedings in the name of the company, the company is the real plaintiff and he is not. He is under no obligation to the defendant to protect his interests by ensuring that he has sufficient funds in hand to pay their costs as well as his own if the proceedings fail.’

Judges:

Millet LJ

Citations:

Times 12-Dec-1996, [1997] 1 WLR 1613, [1996] EWCA Civ 670, [1996] EWCA Civ 671, [1997] BCC 165, [1998] 1 Costs LR 85, [1997] 1 All ER 418

Links:

Bailii, Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Dymocks Franchise Systems (NSW) Pty Ltd v Todd and others (No. 2) PC 21-Jul-2004
PC (New Zealand) Costs were sought against a non-party, following an earlier determination by the Board.
Held: Jurisdiction to make such an order was not complete. Where the order sought was against a . .
Cited – BE Studios Ltd v Smith and Williamson Ltd ChD 2-Dec-2005
The claimant company had failed in its action. The court was asked to make a costs order personally against the principal director of the claimant who had controlled the litigation and funded it. He responded that no impropriety had been shown on . .
Cited – Dolphin Quays Developments Ltd v Mills and others CA 17-May-2007
The owner had agreed to sell a long lease of an apartment to the defendant. Part of the price was to be by way of set off of an existing debt, but ths was not set out in the contract. The claimant bought the land and the benfit of the contract from . .
Cited – Lingfield Properties (Darlington) Ltd v Padgett Lavender Associates QBD 18-Nov-2008
Application for non-party costs order against litigation funder. The third party denied that he was a person against whom an order could be made, and denied his formal involvement in the companies funding the litigation.
Held: Such an order . .
Cited – Goknur v Aytacli CA 13-Jul-2021
Third Party Costs – Director of Insolvent Company
(Organic Village) The Court considered the circumstances Limited in which a director and shareholder of an insolvent company may be personally liable for some or all of that company’s costs liabilities incurred in unsuccessful litigation, pursuant . .
Cited – HB v PB FD 9-Jul-2013
Claim for costs against third party local authority, Croydon LBC after four day private law fact finding hearing. F said that M had fabricated illnesses both in herself and the child leading to the LA being asked to prepare a report. That report . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Costs

Updated: 05 May 2022; Ref: scu.83673

Agricultural Mortgage Corporation Plc v Woodward and Another: CA 30 May 1994

A tenancy granted by an insolvent farmer to his wife was set aside because of additional benefits which were granted. The tenancy was held to have been granted at an undervalue, even though the court was unable precisely to measure the value of the benefits granted. ‘In applying section 423(1)(c) to the facts of the present case, one must look at the transaction as a whole; the tenancy agreement cannot be considered in blinkers. Due weight must be given (inter alia) to the facts not only that the agreement was entered into by the first defendant with his wife for the purposes outlined above, but that the land in question was mortgaged and that the wife, through the grant of the tenancy, would be placed in the ‘ransom’ position described above. Accepting that she agreed to pay for her yearly tenancy which was the best rent reasonably obtainable for that tenancy viewed in isolation, and that she undertook the other tenant’s obligations imposed by the tenancy agreement, it seems to me nevertheless clear that, when the transactions are viewed as a whole, the benefits which the first defendant thereby conferred on her were significantly greater in value, far greater in value, in money or money’s worth than the value of the consideration provided by her. To hold otherwise would seem to me to fly in the face of reality and common sense. No further evidence was, in my judgment, required to establish that the transaction was one falling within s.423(1)(c); the agreed facts speak for themselves. On the facts of this case, the substantial detriment incurred by the first defendant under the transaction was largely matched by a substantial benefit conferred on the second defendant beyond the rights specifically conferred on her by the tenancy agreement.’
Neill LJ: ‘The purpose of the grant of the tenancy agreement was to ensure that the plaintiff did not get vacant possession of the property and was for the purpose of prejudicing the interests of the plaintiff. By the grant of the tenancy, Mrs Woodward acquired the benefit of the surrender value which placed her, as counsel for the plaintiff put it, in ‘a ransom position’ in any future dealings with the mortgagee. . . In the circumstances I see no answer to the argument that, quite apart from any value which may be attributed to the securing of the family home and the acquisition of a debt-free business, the surrender value constituted ‘consideration provided by’ Mr Woodward which was significantly greater than the payment made by Mrs Woodward for the grant of the lease.’

Judges:

Sir Christopher Slade, Neill LJ, Saville LJ

Citations:

Times 30-May-1994, [1995] 1 BCLC 1

Statutes:

Insolvency Act 1986 423

Jurisdiction:

England and Wales

Cited by:

Cited – Ramlort Ltd v Michael James Meston Reid CA 8-Jul-2004
The company sought to claim under a life policy. The deceased had died in Scotland insolvent. The trustee of the policy had declared that he held it on trust for the claimant, but the defendant, the judicial factor of the estate, said the . .
Cited – Feakins and Another v Department for Environment Food and Rural Affairs (Civ 1513) CA 9-Dec-2005
The department complained that the defendants had entered into a transaction with their farm at an undervalue so as to defeat its claim for recovery of sums due. The transaction used the grant of a tenancy by the first chargee.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 04 May 2022; Ref: scu.77676

Midland Bank plc v Pike: 1988

Citations:

[1988] 2 All ER 434

Jurisdiction:

England and Wales

Cited by:

Cited – Gotham v Doodes CA 25-Jul-2006
The former bankrupt resisted sale of his property by the trustee, saying that enforcement was barred by limitation. He and his wife bought the property in early 1988, and he was made bankrupt in October 1988. He was dischaged from bankruptcy in . .
Lists of cited by and citing cases may be incomplete.

Trusts, Insolvency

Updated: 04 May 2022; Ref: scu.244733

In Re A Debtor (No 303 of 1997): ChD 3 Oct 2000

A former partner in a firm was not to be heard to claim a set off of sums due to him in the accounting following the break up of the firm, against sums claimed for an indemnity claimed against him by the other partners in respect of payments made by them as trustees to satisfy partnership obligations in a lease of premises occupied by the partnership.

Citations:

Times 03-Oct-2000

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 04 May 2022; Ref: scu.81655

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 trust’ – whether trustee in bankruptcy takes subject to trust – time at which trust ari
A surety, or a person in the position of a surety, has a right of exoneration whereby he or she is entitled to be indemnified by the principal debtor against any liability incurred as a consequence of being called on to pay the debt, describing it as an incident of the relationship between surety and principal debtor.
‘Where co-owners mortgage their property so that money can be borrowed for the benefit of one mortgagor, the other co-owner will be treated as if he or she was a surety and the equity of exoneration will also arise. In those circumstances that other has an interest in the property of the co-mortgagor whose property is to be regarded as primarily liable to pay the debt: Parsons at [21], Duncan, Fox and Co v North and South Wales Bank (1880) 6 App Cas 1 at 10.
However, the right to exoneration is lost where the surety receives a benefit from the loan or the funds raised in respect of which the charge has been given. ‘So, if the borrowed funds are applied to discharge the surety’s debts, the surety could not claim exoneration, at least in respect of the benefit received.’
Here, the giving of the [Brighton Westpac mortgage] might have created a relationship whereby Mr Mogilevsky would be treated as a surety and Mrs Mogilevsky would be treated as principal debtor if:
the mortgage was for the purpose of raising money to benefit the co-owner, in this case Mrs Mogilevsky;
the money borrowed was used for that purpose; and
Mr Mogilevsky derived no benefit from the money so raised.’

Judges:

Black CJ, Kiefel, Finkelstein JJ

Citations:

[2001] FCA 376, (2001) 109 FCR 120, 192 ALR 772

Links:

Austlii

Jurisdiction:

Australia

Cited by:

Cited – Armstrong v Onyearu and Another CA 11-Apr-2017
Exoneration of partner’s equity on insolvency
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 . .
Lists of cited by and citing cases may be incomplete.

Equity, Insolvency, Trusts

Updated: 04 May 2022; Ref: scu.581747

In re Beni-Felkai Mining Co Ltd: 1933

A liquidator’s remuneration is not encompassed by the word ‘expenses’. The term ‘expenses’ is not a term of art. It may include any expenses which the liquidator may be compelled to pay in respect of his acts in the course of a proper liquidation of the company’s assets.
The liquidator is the ‘person who can see what the position is’ and has the means to ascertain the company’s financial position at any time.

Citations:

[1934] 1 Ch 406, [1933] All ER 693

Cited by:

Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 04 May 2022; Ref: scu.537945

In re International Marine Hydropathic Co: CA 1884

Where rates become due in respect of land occupied by a liquidator for the purpose of the winding up, the liquidator is liable to meet those rates.

Judges:

Baggallay LJ

Citations:

(1884) 28 Ch D 470

Cited by:

Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Rating

Updated: 04 May 2022; Ref: scu.537948

Byblos Bank SAL v Al-Khudhairy: CA 1987

The parties disputed the validity of the appointment of a receiver. The ostensible ground for appointment of the receiver was not made out, but the bank relied on a new ground, section 223(d) of the 1948 Act. Nicholls LJ observed: ‘Construing this section first without reference to authority, it seems to me plain that, in a case where none of the deeming paras (a), (b) or (c) is applicable, what is contemplated is evidence of (and, if necessary, an investigation into) the present capacity of a company to pay all its debts. If a debt presently payable is not paid because of lack of means, that will normally suffice to prove that the company is unable to pay its debts. That will be so even if, on an assessment of all the assets and liabilities of the company, there is a surplus of assets over liabilities. That is trite law.
It is equally trite to observe that the fact that a company can meet all its presently payable debts is not necessarily the end of the matter, because para (d) requires account to be taken of contingent and prospective liabilities. Take the simple, if extreme, case of a company whose liabilities consist of an obligation to repay a loan of andpound;100,000 one year hence, and whose only assets are worth andpound;10,000. It is obvious that, taking into account its future liabilities, such a company does not have the present capacity to pay its debts and as such it ‘is’ unable to pay its debts.’

Judges:

Nicholls, Slade and Neill LJJ

Citations:

[1987] BCLC 232

Statutes:

Companies Act 1948

Citing:

Cited – In Re European Life Assurance Society 1869
Sir William James V-C dismissed a petition for the winding up of a company which had issued large numbers of life policies and annuity contracts, and appeared to be in financial difficulties. He rejected the basis of the ‘just and equitable’ ground . .
Cited – In re a Company (Bond Jewellers) ChD 21-Dec-1983
A tenant company had a propensity for postponing payment of its debts until threatened with litigation. Nourse J felt unable to make an order under section 223(d), and considered, but ultimately did not make an order, on the ‘just and equitable’ . .
Cited – In Re Capital Annuities Ltd ChD 1979
Slade J said: ‘From 1907 onwards, therefore, one species of ‘inability to pay its debts’ specifically recognised by the legislature as a ground for the making of a winding up order in respect of any company incorporated under the Companies Acts was . .

Cited by:

Cited – BNY Corporate Trustee Services Ltd and Others v Neuberger SC 9-May-2013
Potential Insolvency effect under guarantee
The various parties had entered into complex and substantial financial arrangements incorporating guarantees. The guarantees were conditional upon the guaranteed party being solvent. The parties disputed whether a party which would otherwise be . .
Cited – In re Cheyne Finance Plc (No 2) ChD 17-Oct-2007
The court was asked as to the treatment of the assets of the company in case of a future insolvency.
Held: Briggs J decided section 123(1)(e) required: ‘In my judgment, the effect of the alterations to the insolvency test made in 1985 and now . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 04 May 2022; Ref: scu.535118

In Re Capital Annuities Ltd: ChD 1979

Slade J said: ‘From 1907 onwards, therefore, one species of ‘inability to pay its debts’ specifically recognised by the legislature as a ground for the making of a winding up order in respect of any company incorporated under the Companies Acts was the possession of assets insufficient to meet its existing, contingent and prospective liabilities.’

Judges:

Slade J

Citations:

[1979] 1 WLR 170

Cited by:

Cited – Byblos Bank SAL v Al-Khudhairy CA 1987
The parties disputed the validity of the appointment of a receiver. The ostensible ground for appointment of the receiver was not made out, but the bank relied on a new ground, section 223(d) of the 1948 Act. Nicholls LJ observed: ‘Construing this . .
Cited – BNY Corporate Trustee Services Ltd and Others v Neuberger SC 9-May-2013
Potential Insolvency effect under guarantee
The various parties had entered into complex and substantial financial arrangements incorporating guarantees. The guarantees were conditional upon the guaranteed party being solvent. The parties disputed whether a party which would otherwise be . .
Lists of cited by and citing cases may be incomplete.

Company, insolvency

Updated: 04 May 2022; Ref: scu.535116

Re Doran Constructions Pty Ltd (in liq): 27 Mar 2002

Austlii (Supreme Court of New South Wales) CORPORATIONS – winding up – liquidator’s examination – circumstances in which liquidator entitled to ask questions relating to legal advice given to company in liquidation – EVIDENCE – liquidator’s examinations – whether evidence given at is governed by Evidence Act 1995 (NSW) – EVIDENCE – legal professional privilege – circumstances in which joint retainer of solicitor exists – EVIDENCE – procedure to adopt when deciding whether legal professional privilege does not exist – EVIDENCE – waiver of client legal privilege – disclosure of substance of advice – disclosure made knowingly and voluntarily – disclosure by agent or employee authorised to make it – disclosure made under compulsion of law

Judges:

Campbell J

Citations:

[2002] NSWSC 215, 168 FLR 116, (2002) 194 ALR 101, 20 ACLC 909

Links:

Austlii

Cited by:

Cited – Ford, Regina (on The Application of) v The Financial Services Authority Admn 11-Oct-2011
The claimant sought, through judicial review, control over 8 emails sent by them to their lawyers. They claimed legal advice privilege, but the emails contained advice sent by their chartered accountants. The defendant had sought to use them in the . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Insolvency, Legal Professions

Updated: 04 May 2022; Ref: scu.460502

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 would be obvious unfairness to other creditors if both a principal creditor and a surety were entitled to prove for and receive a dividend in respect of what is in substance a single debt. Robert Walker J said: ‘The rule against double proof is a long-standing principle of the law of bankruptcy, and has applied in the winding up of companies since the Companies Act 1862 (see Re Oriental Commercial Bank, ex p European Bank (1871) LR 7 Ch App 99). It has often been described in terms of straightforward and obvious fairness, depending on substance, not form
. . Much the commonest situation in which the rule against double proof applies is that of suretyship. Indeed it has been said that it applies only in a situation which actually is, or is analogous to, that of suretyship (the latter category includes the old cases on negotiable instruments considered in Re Oriental Commercial Bank ex p European Bank). It is therefore convenient to set out some very elementary rules as to suretyship, shorn of complications arising from the provision of security or from the Ellis v Emmanuel distinction. In what follows, C is the principal creditor, D the principal debtor, and S the surety (and all are companies).
(1) So long as any money remains due under the guaranteed loan, C can proceed against either D or (after any requisite notice) S.
(2) If D and S are both wound up, C can prove in both liquidations and hope to receive a dividend in both, subject to not recovering in all more than 100p in the pound.
(3) S’s liquidator can prove in D’s liquidation (under an express or implied right of indemnity) only if S has paid C in full (so that C drops out of the matter and S stands in its place).
(4) As a corollary of (3) above, S’s liquidator cannot prove in D’s liquidation in any way that is in competition with C; though S has a contingent claim against D (in the event of C being paid off by S), S may not make that claim if it has not in fact paid off C.
‘The situation in (2) above is what insolvency practitioners call a ‘double-dip’, which is permissible; the situation in (4) above is the simplest case of what would be double proof, which is not permissible.
‘So far as the basis of the rule needs (or indeed allows of) further explanation it is that the surety’s contingent claim is not regarded as an independent, free-standing debt, but only as a reflection of the ‘real’ debt – that in respect of the money which the principal creditor had loaned to the principal debtor.’

Judges:

Robert Walker J

Citations:

[1996] 2 All ER 433

Jurisdiction:

England and Wales

Cited by:

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 – 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 . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 04 May 2022; Ref: scu.449872

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 interest) in the event of the son’s bankruptcy.
Held: The applicable principle was that a ‘person cannot make it a part of his contract that, in the event of bankruptcy, he is then to get some additional advantage which prevents the property being distributed under the bankruptcy laws’. The agreement was ‘a deliberate device to secure that more money should come to the mother if the son went bankrupt, than would come to her if he did not; and, that being so . . the device is bad’.

Judges:

Tomlin J

Citations:

[1928] Ch 737

Jurisdiction:

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, Contract

Updated: 04 May 2022; Ref: scu.442613

Re Jogia (A Bankrupt): 1988

Application was made for leave to serve proceedings out of the jurisdiction in a claim for money had and received in connection with payments made to the defendant after a receiving order.
Held: A plaintiff who has been given permission to serve out cannot resist an application challenging the jurisdiction by pleading a new cause of action. A claim for unjust enrichment, in the absence of a contractual relationship between the parties, and other than claims to land, are governed by the law of the place of enrichment.
Sir Nicolas Browne-Wilkinson V-C said (obiter): ‘As at present advised, I am of the view that quasi-contactual obligations of this kind arise from the receipt of the money. I find it difficult to see how such obligation can be said to be ‘made’ or ‘arise’ in any place other than that of receipt. As to the proper law, Dicey and Morris, the Conflict of Laws, 10th edn. (1980), p.921 expresses the view that, save in cases where the obligation to repay arises in connection with a contract or an immoveable, the proper law of the quasi-contact is the law of the country where the enrichment occurs. This accords with the American Restatement and seems to me to be sound in principle.’

Judges:

Nicolas Browne-Wilkinson V-C

Citations:

[1988] 1 WLR 484, [1988] 2 All ER 328

Citing:

Applied – Parker v Schuller CA 1901
The plaintiffs had obtained leave to serve a writ out of the jurisdiction under Order 11, r 1(e) of the RSC on the ground that the claim was for breach of a contract within the jurisdiction. The breach alleged was of a CIF contract, and the . .

Cited by:

Cited – NML Capital Ltd v Argentina SC 6-Jul-2011
The respondent had issued bonds but in 2001 had declared a moratorium on paying them. The appellant hedge fund later bought the bonds, heavily discounted. Judgment was obtained in New York, which the appellants now sought to enforce against assets . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Litigation Practice

Updated: 04 May 2022; Ref: scu.441564

Dolphin Quays Developments Ltd v Mills and others: CA 17 May 2007

The owner had agreed to sell a long lease of an apartment to the defendant. Part of the price was to be by way of set off of an existing debt, but ths was not set out in the contract. The claimant bought the land and the benfit of the contract from the original developer, and charged it to a bank, who in due course appointed receivers. It had been argued that the contract was unenforceable under the 1989 Act because the use of the set off was an integral part of the contract, but was not evidenced in writing. Having successfully defended his claim he now sought his costs from the bank who, although not parties, had the financial interest in the claim.
Held: The order was refused. The making of a third party costs order requires some ‘exceptional’ circumstance. What is ‘exceptional’ has to be ascertained by reference to the ordinary range of litigation which comes before the courts. The circumstances were not quite usual and were not speculative, and nor had there been any impropriety.

Citations:

[2007] EWHC 1180 (Ch)

Links:

Bailii

Statutes:

Law of Property Act 1925 109(2), Law of Property (Miscellaneous Provisions) Act 1989 2

Jurisdiction:

England and Wales

Citing:

Cited – Aiden Shipping Co Ltd v Interbulk Ltd (The ‘Vimeira’) HL 1986
Wide Application of Costs Against Third Party
A claim had been made against charterers by the ship owners, and in turn by the charterers against their sub-charterers. Notice of motion were issued after arbitration awards were not accepted. When heard, costs awards were made, which were now . .
Cited – Knight v FP Special Assets Ltd 25-Jun-1992
(High Court of Australia) Two orders for the payment of costs had been made against the receivers and managers of the claimant in the action, Forest Pty Ltd, and the defendant to a counterclaim brought by the defendants to the action, Howe . .
See Also – Dolphin Quays Developments Ltd v Mills and others ChD 17-May-2007
. .
Cited – Metalloy Supplies Ltd (In Liquidation) v MA (UK) Ltd CA 7-Oct-1996
A costs order against liquidator of company in litigation is only rarely to be given. The court should ask who is the ‘real’ party to the litigation.
Millett LJ said: ‘[An order] may be made in a wide variety of circumstances where the third . .
Cited – Dymocks Franchise Systems (NSW) Pty Ltd v Todd and others (No. 2) PC 21-Jul-2004
PC (New Zealand) Costs were sought against a non-party, following an earlier determination by the Board.
Held: Jurisdiction to make such an order was not complete. Where the order sought was against a . .
Cited – Goodwood Recoveries Ltd v Breen CA 19-Apr-2005
A claim against the defendant for money owed to someone else had been bought by the claimant of which Slater, a solicitor, was a director and shareholder. The claim was pursued in the name of the claimant by Slater as its solicitor and principal . .
Cited – Petromec Inc v Petroleo Brasileiro Sa Petrobras CA 19-Jul-2006
A Mr Efremovich, a third party to the action was ordered to pay the costs of Petrobras and Brasoil which on the failure of its claim against them had been ordered to be paid by Petromec. The judge found that Mr Efromovich controlled the proceedings . .
Cited – Bacal Contracting Ltd v Modern Engineering (Bristol) Ltd 1980
Costs were sought against the receivers as from the commencement of the winding up of the plaintiff, and were granted on the basis that if the claim had been continued by the liquidator the applicant would have been a secured creditor. . .
Cited – Anderson v Hyde and Others CANI 2-May-1996
The defendant company was wound up after the receiver had been appointed and the liquidator declined to take over the defence to the action. The judge had refused an application for a third party costs order against the receivers.
Held: Had . .
Cited – Donnelly and others v Weybridge Construction Ltd TCC 22-Mar-2006
Application for specific dicslosure order. . .
Cited – BE Studios Ltd v Smith and Williamson Ltd ChD 2-Dec-2005
The claimant company had failed in its action. The court was asked to make a costs order personally against the principal director of the claimant who had controlled the litigation and funded it. He responded that no impropriety had been shown on . .
Lists of cited by and citing cases may be incomplete.

Land, Costs, Insolvency

Updated: 04 May 2022; Ref: scu.252383

National Westminster Bank Ltd v Halesowen Presswork and Assemblies Ltd: HL 1972

The bank’s common law right of set-off was affirmed. The bank’s appeal succeeded.
The application of section 323 is mandatory in the sense that it cannot be excluded by prior agreement of the parties.

Citations:

[1972] AC 785

Statutes:

Insolvency Act 1986 323(2)

Jurisdiction:

England and Wales

Citing:

Appeal from – Halesowen Presswork and Assemblies Ltd v Westminster Bank Ltd CA 1971
The relationship of banker and customer was a single relationship the situation was not one of lien. Buckley LJ said: ‘Nor is it a set-off situation, which postulates mutual but independent obligations between the two parties. It is an accounting . .

Cited by:

Followed – Re K (Restraint Order) 1990
An order under the Act prohibited K from disposing of his assets, including a deposit account with the bank. K had an overdraft facility secured against the deposit account. The bank sought to set off the overdraft against the sums held on deposit. . .
Lists of cited by and citing cases may be incomplete.

Banking, Insolvency

Updated: 02 May 2022; Ref: scu.416228

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.

Judges:

Mervyn Davies J

Citations:

[1988] BCLC 363

Statutes:

Supreme Court Act 1981 51

Jurisdiction:

England and Wales

Cited by:

Approved – 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 . .
Cited – Irish Reel Productions Ltd v Capitol Films Ltd ChD 10-Feb-2010
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.
Lists of cited by and citing cases may be incomplete.

Insolvency, Costs

Updated: 02 May 2022; Ref: scu.408658

Harvey v Sir George Reynolds: 1669

H brought debt upon an escape, and counts that he had recovered, andc. in Lond. against A. and had him in execution in Lond. and that from thence he was by hab. carp. remov’d and also committed to the Marshalsea, where the defendant was keeper.
And that he, andc. had suffered him to go at large voluntarily, andC. The defendant confesses, andc. and said that he had broken prison, and so escap’d contrary to his will ; and that upon fresh sute he had retaken A. (viz.) 18 day of May, before the bill exhibited also. But in truth that 18 day of May was after the bill exhibited, and an imparlance had, yet it was before any plea pleaded. And hy the Court that the reprisaI is found tarde, 13 E. 4. 9. for it shall be mischievous to the party to attend for a reprisal, which if in truth had been before, andc. it had been a good excuse and plea. As reparation of waste, before the writ brought is a good plea in waste. Also there needs not any traverse to a voluntary escape, where he confesses in voluntary escape ; for that is a good cause of action. And by the Court the plaintiff had judgement.

Citations:

[1669] EngR 271, (1669) Noy 93, (1669) 74 ER 1059 (A)

Links:

Commonlii

Insolvency

Updated: 02 May 2022; Ref: scu.407111

Copeman v Gallant: 1716

Bankrupt, though in possession, yet if if empowered to dispose of goods in trust for another, they are not liable to the bankruptcy, either in law or equity.

Citations:

[1716] EngR 13, (1716) 1 P Wms 314, (1716) 24 ER 404

Links:

Commonlii

Insolvency

Updated: 02 May 2022; Ref: scu.390676

Bracy’s Case: 1738

He was committed by commissioners of bankruptcy, and the conclusion of the commitment was, until he conform himself to our authority, and be thence delivered by due course of law.

Citations:

[1738] EngR 150, (1688-1710, 1738) Holt KB 94, (1738) 90 ER 950 (B)

Links:

Commonlii

Jurisdiction:

England and Wales

Insolvency

Updated: 02 May 2022; Ref: scu.385543

Anonymus (on Petition): 1726

Creditor coming in under a commission of bankruptcy, though only to prove his debt and oppose the bankrupt’s obtaining his certificate, yet he shall not sue the bankrupt at law, unless he will waive all benefit of the commission, not only as to the dividends but as to his voting against the bankrupt’s gaining his certificate.

Judges:

Lord Chancellor King

Citations:

[1726] EngR 45, (1726) 2 P Wms 394, (1726) 24 ER 782

Links:

Commonlii

Insolvency

Updated: 02 May 2022; Ref: scu.378625

In re Seagull Manufacturing Co Ltd: ChD 1992

The court considered the power of an English court over a foreign resident under section 133.
Held: In contrast with the private examination provisions, on its true construction section 133 applies to those who are within the class of persons specified in subsection (1), namely those who have voluntarily participated in the affairs of the company, whether or not they are British subjects and whether or not they are within the jurisdiction at the relevant time, even though they cannot be served with the necessary summons within the jurisdiction of the English court.

Judges:

Mummery J

Citations:

[1992] Ch 128

Statutes:

Insolvency Act 1986 133(1)

Jurisdiction:

England and Wales

Cited by:

Appeal from – In Re Seagull Manufacturing Co Ltd (In Liquidation); Tucker CA 22-Feb-1993
The court has jurisdiction to order the public examination of a company director in in a compulsory liquidation about the affairs of the company, even though he might not be within the jurisdiction. The court found no reasons of comity which would . .
Cited – Bilta (UK) Ltd and Others v Nazir and Others ChD 30-Jul-2012
The company was said to have engaged in a fraud based on false European Trading Scheme Allowances, and had been wound up by the Revenue. The liquidators, in the company name, now sought recovery from former directors and associates.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Jurisdiction

Updated: 02 May 2022; Ref: scu.372592

Bracy’s Case EngR 334: 1792

Commissioners of bankrupts may ask a witness when and in what manner he had been aiding in carrying away the bankrupt’s goods and what he knew of the bankrupt’s goods even from a time before the bankruptcy.

Citations:

[1792] EngR 334, (1792) 1 Ld Raym 99, (1792) 91 ER 962 (B)

Links:

Commonlii

Jurisdiction:

England and Wales

Insolvency

Updated: 02 May 2022; Ref: scu.358546

Aston v Sherman: 1795

A plea by an executor that six judgmerits are recovered against him, each for 20l. and that he has only 10l. assets, is a confession of assets beyond the sums recovered by five of them.

Citations:

[1795] EngR 352, (1795) 1 Salk 298, (1795) 91 ER 265 (A)

Links:

Commonlii

Insolvency

Updated: 02 May 2022; Ref: scu.352697

Robertson And Another, Assignees of Milburn, Hallowell, And Walmlsey, Bankrupts, v Sir Thos Henry Liddell, Bart: 28 May 1808

The departure of a trader from his dwellinghouse, with intent to delay his creditors, is an act of bankruptcy, though no creditor be thereby in fact delayed. And the words in the stat. 1 Jac 1 e15 s2 following this and other acts of bankruptcy committed, viz. ‘to the intent or whereby his creditors shall or may be defeated or delayed,” ande. are to be read ‘to the intent his creditors shall, or whereby, (or that thereby) they may be defeated,’ ande. But the lying in prison six months upon an arrest is made a substantive act of bankruptcy independent of any intent of the trader. So in the case of an act of bankruptcy by the trader’s beginning to keep house, the denial of a creditor is usually given in evidence, not to shew the fact of the creditor’s being, delayed, but as evidence to explain the equivocal act of the trader’s keeping in his house, and to shew that he began to keep house with intent to delay his creditors.

Citations:

[1808] EngR 211, (1808) 9 East 487, (1808) 103 ER 659

Links:

Commonlii

Insolvency

Updated: 02 May 2022; Ref: scu.339941

De La Torre v Barclay And Salkeld: 1815

A qualified admission by a party who relies on an objection, which would at any time have been a good defence to the action, does not take a case out of the Statute of Limitations. An agreement between the holder and the acceptor of a bill (dishonoured for non-payment), that the acceptor shall pay to the holder the amount of the bill. and no more, discharges the drawer, although his assignees (he being then a bankrupt) are parties to such agreement.

Citations:

[1815] EngR 106, (1815) 1 Stark 7, (1815) 171 ER 385 (A)

Links:

Commonlii

Insolvency

Updated: 02 May 2022; Ref: scu.335916

Bedford v Deakin And Two Others: 1816

The plaintiff holding a bill of exchange as a security from three partners, after the dissolution of the copartnership, and after the bankruptcy of one of them, takes the notes of one of them as a collateral security, without the knowledge of the other partners and retains, the original security in his hands. This does not discharge the other partners.

Citations:

[1816] EngR 14, (1816-1819) 2 Stark 178, (1816) 171 ER 612 (B)

Links:

Commonlii

Company, Insolvency

Updated: 02 May 2022; Ref: scu.333707

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: and that on the bankruptcy or insolvency of a partner, the partnership should be immiediately void as to him ; by a deed, four years subsequent, the partners declared (after a recital that such was their intention in the articles), that in the event of bankruptcy or insolvency, the same arrangement should be practised as on dissolution by death, notice, or misconduct : one of the partners having become bankrupt within a few months after the execution of the latter deed, his assignees are not bound by it. Whether a provision in articles of partnership, that on the bankruptcy of a partner his share shall be taken by the solvent partners, at a sum to be fixed by valuation, and payable by installments in a course of years, is not void by the statutes concerning bankrupts.
An owner of property may, on alienation, qualify the interest of his alienee, by a condition to take effect on bankruptcy; but cannot, by contract or otherwise, qualify his own interest by a like condition, determining or controlling it in the event of his own bankruptcy, to the disappointment or delay of his creditors.

Judges:

Lord Eldon LC

Citations:

[1818] EngR 607, (1818) 1 Swans 471, (1818) 36 ER 469

Links:

Commonlii

Cited by:

See Also – Wilson v Greenwood 17-Jul-1818
. .
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: 02 May 2022; Ref: scu.332607

West v Ashdown And Palfrey, Bail of Price: 7 Feb 1823

The principal offered to surrender on the 13th of May, but the Plaintiff gave him time, and dispensed with the surrender, on an understanding that the bail should continue liable. On the 11th June the bail, ignorant that the Defetidant had offered to surrender, signed an agreement to continue liable; the principal always declared himself ready to surrender ; but in Tiinity vacation tbe Plaintiff, without notice, issued proceedings against the bail, returnable in MichaeImas term. On the 29th of October the principal obtained his certificate under a commission of bankrupycy : Held, that the bail were discharged.

Citations:

[1823] EngR 373, (1823) 1 Bing 164, (1823) 130 ER 67

Links:

Commonlii

Jurisdiction:

England and Wales

Insolvency

Updated: 02 May 2022; Ref: scu.328413

Holt v Hardcastle: 3 Nov 1838

Where a sole plaintiff becomes bankrupt, and the defendant wishes to speed the cause, although he can obtain no direct order against the assignees to continue the suit, he may move that unless they file a supplemental bill within a given time the suit shall be dismissed.

Citations:

[1838] EngR 882, (1838) 3 Y and C Ex 236, (1838) 160 ER 688

Links:

Commonlii

Insolvency

Updated: 02 May 2022; Ref: scu.312888

Cook And Others, Assignees Of Williams Hitchcock, A Bankrupt, v Pritchard: 15 Jan 1843

Citations:

[1843] EngR 182, (1843) 5 Man and G 329, (1843) 134 ER 590

Links:

Commonlii

Cited by:

See Also – Pritchard v Hitchcock 6-Jun-1843
P (the plaintiff) had drawn bills requiring WH to pay P a sum of money three months after date. WH accepted them, but to gain more time for WH, GH (the defendant) guaranteed payment of the bills. P pressed for payment. WH did ultimately pay P but . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 02 May 2022; Ref: scu.305876

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 contractual liability to pay a stated or liquidated sum but as a liability for unliquidated damages. The court an appeal against the refusal of the Commissioner to set aside the adjudication of bankruptcy.
Maule J said: ‘The question now before the Court is, whether the debt or alleged debt or demand asserted to be due is one which will be sufficient, as a petitioning creditor’s debt, to support an adjudication in bankruptcy. I am of opinion that it is not. It is clear from the recitals in the deed of partnership which contains the covenant in question, that the engagement entered into was one entered into for the benefit of Mr Walker. The covenant was with Mr Walker for the benefit of Mr Walker, and was not a covenant with Mr Walker for the benefit and on behalf of Walker, Perry and Broadhurst. They had, in fact, no interest in it, but Mr Walker was alone interested; it was a covenant to pay the difference between the debts due from the old firm stated in the schedule and any further debts; it was to pay the excess of one set of debts-over the amount of debts due to the firm. That being so, it seems to me impossible to turn the covenant into a covenant to pay a liquidated sum, or any sum, to Walker. The covenant could not be performed by doing that; the object of the parties was to put the firm in the same position in which they would be if the debts, active and passive, were to the amount stated in the covenant, and there is no specific sum engaged to be paid to Walker. It cannot be treated at law as a specific sum of money to be received, for the right to receive would be co-extensive only with the demand sustained; and this cannot be so made the subject of computation as to be a fit ground for a petitioning creditor’s debt. No action could be framed upon it. I do not mean to say that a covenant to pay to A. for the benefit of A, B. and C. may not make a good petitioning creditor’s debt. In the present case there might not be a sufficient damage to constitute the debt; or, even suppose that damage to the amount of 100l, was shewn, still it does not follow that the money could have been recovered, as anything to be recovered must be in the shape of damage, and such damage is not of a character to amount to a petitioning creditor’s debt.’

Judges:

Maule J

Citations:

(1832) 22 LJ Bank 21, [1852] EngR 1101, (1852) 2 De G M and G 953, (1852) 42 ER 1145

Links:

Commonlii

Cited by:

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

Updated: 02 May 2022; Ref: scu.296224

Robert Hull Terrell v James Button: 16 Mar 1854

The intention of the 11th and 12th Vict. c. 45 (the Winding Up Act of 1848), was to provide for debts recoverable only in equity, as well as for those recoverable at law ; and the Master has an uncontrolled discretion (subject to appeal) to allow or disallow, or to allow as a claim only, according to the proofs adduced before him, any demand against a Company.
Certain persons proposed to form a company; they employed A. as their solicitor; he was so named, on provisional registration, under the joint Stock Company’s Act; the Directors were not to be personally liable to the officers of the Company ; the solicitor was continuously employed, until after the company had been completely formed and registered, and until it was wound up. The 44th article of the deed of settlement declared, that ‘a sufficient part of the funds of the Company should, upon complete registration, be appropriated in payment of the expenses of and incidental to the formation of the Company, including those of or having reference to the preparation and execution of that deed.’ When the Company was before the Master on the Winding-up Act, the solicitor presented a demand for services from the earliest period up to that time. The Master allowed the demand as a claim only, and not as a debt, leaving the solicitor to proceed at law : Held, reversing an order of Vice Chancellor Kindersley which had permitted the order of the Master to stand, that the Master ought to have allowed this demand as a debt, but subject to proof that the items came under the description contained in the 44th article, and subject also to taxation. As the solicitor had omitted to bring the 44th article to the notice of the Vice Chancellor, his order, though reversed, was reversed without costs.

Citations:

[1854] EngR 361, (1854) 4 HLC 1091, (1854) 10 ER 790

Links:

Commonlii

Statutes:

Winding Up Act of 1848

Company, Legal Professions, Insolvency

Updated: 02 May 2022; Ref: scu.293218

William Dean And Archibald Stewart v James Byrnes, Robert Cook, Clark Irving, Thomas Walker, And Thomas Buchanan: PC 29 Jun 1864

A verbal agreement was entered into between D., a broker and commission agent at Sydney, and S., who speculated in sugars, in consequence of which two sums were advanced by D. to S. at different, periods, the first for andpound;3000, and the second for andpound;7999 15s. 3d., S. undertaking to place in the hands of D., for sale, certain sugars to be imported from Maurituis and Batavia D. taking the profits of the commission arising from the sale, and repaying his advances, with interest, out of the proceeds of the saIe. Of the moneys thus borrowed, the sum of andpound;3000, with other moneys, was remitted by S. to H and Co., his agents at Batavia, for the purchase of sugars. From the state of the market E, and Co. could not then purchase any sugars on S.’s account, who in the interim became Insolvent, and executed a deed assigning his property to Trustees for the benefit of his creditors. After S.’s insolvency H. and Co. purchased Mauritius sugars with the money sent by S., to whom the same was consigned and sold by the Trustees. The exact time when H. and Co. heard of S.’s insolvency did not appear, but they afterwards purchased Batavian sugars, and having heard of S.’s insolvency, consigned the sugars to S., as agent of the Trustees. S. had deposited with D. prornissory notes and acceptances of J. and J. and Co. by way of security for D.’s advances to him. J. and C. were interested in the adventure of S. After S.’s insolvency J. and Co, also became insolvent, and D. received from their estate the sum of andpound;6083 12s., on account of their Bills, and applied andpound;3000 to the payment of the first advance, and the balance towards the other sum of andpound;7999 15s. 3d. D claimed a lien on the sugars in respect of the sum of 4916 11s 3d, the remaining part of the sum of andpound;7999 15s. 3d. Held, affirming the decree of the Court below:-
First, that it was no part of the agreement that S. should invest the moneys lent him by D. in any particular way, and having assigned his property to Trustees for the benefit of his creditors before the purchase by H. and Co., the sugars consigned were for the benefit of the Trustees, and that D. had no lien on the sugars,
Second, that S.’s Trustees allowing H, and Co. to purchase Batavian sugars on their account did not affect the Trustees with any equity in favour of D. under his agreement with S.
A Bill was filed by D. praying a declaration that he had a lien on the sugars consigned from Batavia, but the Bill did not mention the Mauritius sugarrs.
Held, that as D. had so framed his Bill, he was precluded from afterwards
insisting on any new claim by way of lien on the Mauritius sugars.

Citations:

[1864] EngR 623, (1864) 3 Moo PC NS 92, (1864) 16 ER 35

Links:

Commonlii

Contract, Insolvency

Updated: 02 May 2022; Ref: scu.282337

Sreemanchunder Dey v Gopaulchunder Chuckerbutty, Doorgapersaud Dey, Russickloll Dey, And Prosonomoye Dossee: 14 Nov 1866

(Fort William, Bengal) A. purchased a Talook at a sale, in execution of a decree obtained by a judgment-creditor. The Assignee of another judgment-creditor, who had obtained a decree in a separate suit against the estate, brought a suit against the purchaser to set aside the sale, on the ground that the purchase was not bona fide, being made in collusion with the judgment-debtors. Held, on a review of the evidence, that there was not sufficient evidence to warrant the decree of the High Court at Calcutta that it was a benamee transaction ; or that the purchaser was acting as an Agent for the judgment-debtors; and the decree of the Court below reversed [11 Moo. Ind. App. 49]. Held further, that the onus probandi was on the Plaintiff to establish the affirmative issue that the money for the purchase of the Talook was supplied by the judgment-debtors, or a third party for them, and not by the purchaser. Evidence showing circumstances which may create suspicion is not enough to justify the Court making a decree resting on suspicion only.
On an appeal to the High Court, that Court, acting under the power conferred by section 355 of the Code of Civil Procedure, Act, No. VIII. of 1859, ex mera motu, called for and examined fresh witnesses. Held that such power should be cautiously exercised, and the reasons for exercising it recorded or minuted by the High Court on the proceedings;as, first, the witnesses may be such as the parties to the suit do not wish to call ; and, secondly, thc new evidence may not be sufiiciently extensive to satisfy the ends of justice.

Citations:

[1866] EngR 190, (1866) 11 Moo Ind App 28, (1866) 20 ER 11

Links:

Commonlii

Commonwealth, Insolvency

Updated: 02 May 2022; Ref: scu.280901

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 pleaded facts, Mr Chopra and Mr Nazir were the directing organ of Bilta under its constitution. They constituted the board. Mr Chopra was also the sole shareholder. As between Bilta and Jetivia it was common ground on the pleadings that they were the ‘directing mind and will’ of Bilta for all purposes, and certainly in relation to those of its functions which are relevant in these proceedings.
Held: The defendant company and director failed in their appeals, both in relation to the illegality defence and in relation to section 213. The plea of ex turpi causa non oritur actio was not available to the directors of a company in a defence to an action against them by the company for acts involvig breaches of their duties as directors.
Lord Mance said: ‘ it is certainly unjust and absurd to suggest that the answer to a claim for breach of a director’s (or any employee’s) duty could lie in attributing to the company the very misconduct by which the director or employee has damaged it. A company has its own separate legal personality and interests. Duties are owed to it by those officers who constitute its directing mind and will, similarly to the way in which they are owed by other more ordinary employees or agents. All the shareholders of a solvent company acting unanimously may in certain circumstances (which need not here be considered, since it is not suggested that they may apply) be able to authorise what might otherwise be misconduct towards the company. But even the shareholders of a company which is insolvent or facing insolvency cannot do this to the prejudice of its creditors, and the company’s officers owe a particular duty to safeguard the interest of such creditors. There is no basis for regarding the various statutory remedies available to a liquidator against defaulting officers as making this duty or its enforcement redundant.’

Judges:

Lord Neuberger, President, Lord Mance, Lord Clarke, Lord Sumption, Lord Carnwath, Lord Toulson, Lord Hodge

Citations:

[2015] UKSC 23, [2015] WLR(D) 182, UKSC 2013/0206, [2015] 2 Lloyd’s Rep 61, [2015] 1 BCLC 443, [2015] 2 All ER (Comm) 281, [2015] BVC 20, [2015] 2 WLR 1168, [2015] BCC 343, [2015] 2 All ER 1083, [2016] AC 1

Links:

Bailii, Bailii Summary, WLRD, SC Summary, SC

Jurisdiction:

England and Wales

Citing:

Appeal from – Jetivia Sa and Another v Bilta (UK) Ltd and Others CA 31-Jul-2013
Defendants appealed against refusal of their request for a summary striking out for lack of jurisdiction, of the claims against them arising from their management of the insolvency of the first defendant. . .
Cited – Bowman v Secular Society Limited HL 1917
The plaintiff argued that the objects of the Secular Society Ltd, which had been registered under the Companies Acts, were unlawful.
Held: The House referred to ‘the last persons to go to the stake in this country pro salute animae’ in 1612 or . .
At first Instance (1) – Bilta (UK) Ltd (In Liquidation) v Nazir and Others ChD 17-May-2010
The sixth defendant resisted a claim against it saying that matters between them were governed by a framework agreement which provided for matters to be resolved by arbitration. The claimant resisted, denying the arbitration agreement and saying . .
At first Instance (2) – Bilta (Uk) Ltd v Nazir and Others ChD 24-Nov-2010
The company had been wound up by the Revenue on the basis that it had been used for a substantial VAT fraud. The liquidators now sued those said to have participated. A defendant denied the jurisdiction because of a disputed arbitration agreement. . .
Appeal from – Bilta (UK) Ltd and Others v Nazir and Others ChD 30-Jul-2012
The company was said to have engaged in a fraud based on false European Trading Scheme Allowances, and had been wound up by the Revenue. The liquidators, in the company name, now sought recovery from former directors and associates.
Held: The . .
Cited – Abrath v North Eastern Railway Co HL 15-Mar-1886
The plaintiff had brought an action against the company of malicious prosecution. It was rejected by the jury and again on appeal.
Held: The appeal failed. In an action for damages for the tort of malicious prosecution one of the elements of . .
Cited – The Citizens Life Assurance Company Limited v Brown PC 6-May-1904
(New South Wales) A malicious libel was alleged. The life assurance company was vicariously liable in respect of a libel contained in a circular sent out by a person who was employed by the company under a written agreement as its ‘superintendent of . .
Cited – West Mercia Safetywear Ltd v Dodds CA 1988
If a company continues to trade whilst insolvent but in the expectation that it would return to profitability, it should be regarded as trading not for the benefit of the shareholders, but for the creditors also. If there is a possibility of . .
Cited – Tinsley v Milligan CA 1992
The court considered the defence of illegal user to a claim to have established an easement by prescription: ‘These authorities seem to me to establish that when applying the ‘ex turpi causa’ maxim in a case in which a defence of illegality has been . .
Cited – Lennard’s Carrying Company Limited v Asiatic Petroleum Company Limited HL 1915
The House was asked as to when the acts of an individual became those of his employer under section 502 (‘any loss or damage happening without (the ship owner’s) actual fault or privity’).
Held: Viscount Haldane LC said: ‘It must be upon the . .
Cited – El Ajou v Dollar Land Holdings Plc and Another ChD 3-Jan-1993
A non active director may still be company’s ‘directing mind’. The doctrine of attributing the actions of individuals to a company is that ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’
Tracing was no . .
Cited – Tinsley v Milligan HL 28-Jun-1993
Two women parties used funds generated by a joint business venture to buy a house in which they lived together. It was vested in the sole name of the plaintiff but on the understanding that they were joint beneficial owners. The purpose of the . .
Cited – El Ajou v Dollar Land Holdings Ltd CA 2-Dec-1993
The court was asked whether, for the purposes of establishing a company’s liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company.
Held: . .
Cited – Meridian Global Funds Management Asia Ltd v The Securities Commission Co PC 26-Jun-1995
(New Zealand) Lord Hofmann said: ‘There is in fact no such thing as the company as such, no ‘ding an sich’, only the applicable rules. To say that a company cannot do something means only that there is no one whose doing of that act would, under the . .
Not to be followed – Moore Stephens (A Firm) v Stone Rolls Ltd (in liquidation) HL 30-Jul-2009
The appellants had audited the books of the respondent company, but had failed to identify substantial frauds by an employee of the respondent. The auditors appealed a finding of professional negligence, relying on the maxim ex turpi causa non . .
Cited – Hounga v Allen and Another SC 30-Jul-2014
The appellant, of Nigerian origin had been brought here at the age of 14 with false identity papers, and was put to work caring for the respondent’s children. In 2008 she was dismissed and ejected from the house. She brought proceedings alleging . .
Cited – Les Laboratoires Servier and Another v Apotex Inc and Others SC 29-Oct-2014
Ex turpi causa explained
The parties had disputed the validity a patent and the production of infringing preparations. The english patent had failed and damages were to be awarded, but a Canadian patent remained the defendant now challenged the calculation of damages for . .
Cited – Abrath v North Eastern Railway Company CA 22-Jun-1883
A claim was brought against the company for malicious prosecution. The jury acquitted it. And the plaintiff appealed.
Held: The judge’s direction had been correct.
Bowen LJ said: ‘Wherever a person asserts affirmatively as part of his . .
Cited – JC Houghton and Co v Northard, Lowe and Wills HL 1927
The court was asked whether the knowledge of the directors of the latter company should be attributed to it, with the effect that the latter company could and should be treated as estopped from denying that it had consented to a particular . .
Cited – Regina v ICR Haulage Ltd KBD 1944
A company can be guilty of conspiracy, in this case to defraud. Both the managing director and, through him, the haulage company were convicted of conspiracy to defraud. His acts ‘were the acts of the company and the fraud of that person was the . .
Cited – Moore v I Bresler Ltd KBD 1944
The company had been required to make a return for revenue purposes (purchase tax) and the statute made it an offence to make a false return with intent to deceive. The company was charged with such, but responded that the action was of employees . . .
Cited – Director of Public Prosecutions v Kent and Sussex Contractors Ltd 1945
The court considered the liability of a company under provisions being, ‘with intent to deceive, made use . . of a document which was false in a material particular’
Held: The General Manager was capable of acting or speaking as the company; . .
Cited – Belmont Finance Corporation Ltd v Williams Furniture Ltd CA 1979
The company directors operated an elaborate scheme to extract value from Belmont by causing it to buy the shares of a company called Maximum at a considerable overvalue. This was a breach of the fiduciary duties of the directors. They sought to . .
Cited – Re Hampshire Land Company 9-Jul-1896
A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and . .
Cited – Lloyd v Grace, Smith and Co HL 1912
Mrs Lloyd delivered the title deeds of her cottages at Ellesmere Port to the solicitors’ managing clerk, who defrauded her.
Held: Vicarious liability can extend to fraudulent acts or omissions if those were carried out in the course of the . .
Cited – Tesco Supermarkets Ltd v Nattrass HL 31-Mar-1971
Identification of Company’s Directing Mind
In a prosecution under the 1968 Act, the court discussed how to identify the directing mind and will of a company, and whether employees remained liable when proper instructions had been given to those in charge of a local store.
Held: ‘In the . .
Cited – Ashmore, Benson, Pease and Co v A V Dawson Ltd CA 1973
By acquiescing in the unlawful overloading of the hauliers’ lorries, the consignors’ assistant transport manager and his assistant made the haulage contract unenforceable at the instance of the consignors, who were unable to recover when a lorry . .
Cited – Attorney-General’s Reference (No. 2 of 1982) CACD 1984
Two men were charged with theft from a company which they wholly owned and controlled. The court considered the actions of company directors in dishonestly appropriating the property of the company, and whether since the title to the goods was . .
Cited – Royal Brunei Airlines SDN BHD v Tan PC 24-May-1995
(Brunei) The defendants were a one-man company, BLT, and the one man, Mr Tan. A dishonest third party to a breach of trust was liable to make good a resulting loss even though he had received no trust property. The test of knowledge was an objective . .
Cited – Lancashire County Council v Municipal Mutual Insurance Ltd CA 3-Apr-1996
The defendant agreed to indemnify the insured ‘in respect of all sums which the insured shall become legally liable to pay as compensation arising out of’ various matters including wrongful arrest, malicious prosecution and false imprisonment. The . .
Cited – Lister and Others v Hesley Hall Ltd HL 3-May-2001
A school board employed staff to manage a residential school for vulnerable children. The staff committed sexual abuse of the children. The school denied vicarious liability for the acts of the teachers.
Held: ‘Vicarious liability is legal . .
Cited – Safeway Stores Ltd and Others v Twigger and Others CA 21-Dec-2010
The court was asked whether, when a company had been fined for anti-competitive practices, the company could then recover the penalties from the directors and senior employees involved.
Held: The undertaking was not entitled to recover the . .
Cited – Aberdeen Railway Co v Blaikie Brothers HL 1854
The plaintiff needed a large quantity of iron chairs (rail sockets) and contracted for their supply over an 18-month period with Blaikie Bros a partnership. Thomas Blaikie was the managing partner of Blaikie Bros and a director and the chairman of . .
Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .
Cited – Brink’s Mat Ltd v Noye CA 1991
The proceeds of the theft of gold bullion from a warehouse owned by the plaintiffs were laundered through the bank account of a company called Scadlynn Ltd with Barclays Bank. The directors and sole shareholders of Scadlynn were signatories of the . .
Cited – Director of Public Prosecutions v Gomez HL 3-Dec-1992
The defendant worked as a shop assistant. He had persuaded the manager to accept in payment for goods, two cheques which he knew to be stolen. The CA had decided that since the ownership of the goods was transferred on the sale, no appropriation of . .
Cited – Hall v Hebert 29-Apr-1993
(Canadian Supreme Court) After they had been drinking heavily together, Mr Hebert, who owned a muscle car, allowed Mr Hall to drive it, including initially to give it a rolling start down a road on one side of which there was a steep slope. The car . .
Cited – South Australia Asset Management Corporation v York Montague Ltd etc HL 24-Jun-1996
Limits of Damages for Negligent Valuations
Damages for negligent valuations are limited to the foreseeable consequences of advice, and do not include losses arising from a general fall in values. Valuation is seldom an exact science, and within a band of figures valuers may differ without . .
Cited – Marks and Spencer Plc v Palmer CA 9-Oct-2001
The claimant had tripped against a weather strip which protruded by less than 1 cm above the surface of doorway of the staff exit from one of the defendant’s stores. It was a permanent fixture and, as such, was part of the construction of the floor. . .
Cited – Marks and Spencer plc v Palmer CA 9-Oct-2001
A shopper carrying some heavy bags tripped and fell over a weather strip, which was proud of the floor at an exit door to the extent of some 8 to 9.5 mm high. The recorder had said that, once he was satisfied that the claimant came into contact with . .
Cited – Gray v Thames Trains and Others HL 17-Jun-2009
The claimant suffered psychiatric injury in a rail crash caused by the defendant’s negligence. Under this condition of Post-Traumatic Stress Disorder, the claimant had later gone on to kill another person, and he had been detained under section 41. . .
Cited – Ralph Schmid (Acting As Liquidator of The Assets of Aletta Zimmermann) v Lilly Hertel ECJ 16-Jan-2014
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 – . .

Cited by:

Cited – Burnden Holdings (UK) Ltd v Fielding and Another CA 17-Jun-2016
The company, now in liquidation sought to claim for the alledged misapplication by former directors of its funds in 2007. It now appealed against a summary rejection of its claim as time barred.
Held: The appeal succeeded. Section 21(1)(b) . .
Cited – Royal Mail Group Ltd v Jhuti SC 27-Nov-2019
‘if a person in the hierarchy of responsibility above the employee determines that she (or he) should be dismissed for a reason but hides it behind an invented reason which the decision-maker adopts, the reason for the dismissal is the hidden reason . .
Cited – Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd SC 30-Oct-2019
The Court was asked whether a claim against a bank for breach of the Quincecare duty is defeated if the customer is a company, and the fraudulent payment instructions are given by the company’s Chairman and sole shareholder who is the dominating . .
Cited – Patel v Mirza SC 20-Jul-2016
The claimant advanced funds to the respondent for him to invest in a bank of which the claimant had insider knowledge. In fact the defendant did not invest the funds, the knowledge was incorrect. The defendant however did not return the sums . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Torts – Other, Limitation

Leading Case

Updated: 02 May 2022; Ref: scu.545696

The Trustee of the Property of FC Jones and Sons v Jones: CA 25 Apr 1996

Statute may cause the legal ownership of the bank account to change, for example on bankruptcy of the account holder or holders

Judges:

Nourse, Beldam, Millett LJJ

Citations:

[1996] EWCA Civ 1324, [1996] 4 All ER 721, [1996] BPIR 644, [1997] 1 WLR 51, [1997] 1 Ch 159, [1997] Ch 159, [1996] 3 WLR 703, [1997] 1 Cr App R 335

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Scott v Bridge and Others ChD 25-Nov-2020
Claim to recover money and property said to have been transferred by the claimant to the defendants or one or more of them. The money concerned came from a bank account belonging to the claimant. The property concerned consisted of two . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 01 May 2022; Ref: scu.276271

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 existence of the discretion in the arbitrator had not been fatal. The costs award was provable in the bankruptcy. The court identified the contractual submission of the debtor to the arbitrator’s costs discretion as a sufficient pre-cut-off date legal obligation.

Citations:

(1886) 3 Morrell 179

Cited by:

Cited – Haine v Secretary of State for Business Enterprise and Regulatory Reform and Another; Day v Haine CA 11-Jun-2008
Former employees had obtained a protective award against the company for failing to consult on the impending redundancies and submitted proofs of debt to the liquidator who sought guidance from the court. The judge had held that since the Act . .
Cited – 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.

Insolvency

Updated: 01 May 2022; Ref: scu.268853

Re Oceanic Steam Navigation Co Ltd: 1939

In the case of an insolvent company, in which the shareholders have no interest of any value, the court may sanction a scheme which leaves them with nothing.

Citations:

[1939] Ch 41

Cited by:

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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 01 May 2022; Ref: scu.266728

In Re Pope ex parte Dicksee: 1908

In a post-nuptial settlement, the wife had given up all her rights in return for a transfer to her of property from her husband who was later made bankrupt.
Held: Sir Herbert Cozens-Hardy MR said: ‘I am unable to adopt the view that there must be either money or physical property given by the purchaser in order to bring the case within the exception. In my opinion, the release of a right or the compromise of a claim, not being a merely colourable right or claim, may suffice to constitute a person a ‘purchaser’ within the meaning of section 47′.
Buckley LJ disagreed: ‘The purchaser for valuable consideration within this section must be, I think, a person who gives such a valuable consideration as justifies his being described as a purchaser or buyer. That is only satisfied when the valuable consideration is money or property or something capable of being measured by money. It does not, I think, extend to the surrender of such a right as the right to relief for matrimonial offences.’

Judges:

Sir Herbert Cozens-Hardy MR

Citations:

[1908] 2 KB 169

Statutes:

Bankruptcy Act 1883 47

Jurisdiction:

England and Wales

Cited by:

Cited – Re Abbot (A Bankrupt), ex parte Trustee Of The Property Of The Bankrupt v Abbot QBD 1983
An ancillary relief order was made in December 1978, following a compromise agreement. It provided for the sale of the former matrimonial home and the payment to the wife from the proceeds of sale of andpound;18,000. The husband was adjudicated . .
Cited – Hill and Another v Haines ChD 3-May-2007
The husband and wife had separated and divorced. In ancillary proceedings, the family home had been transferred to the wife under a court order. The judge had noted that the husband was hopelessly insolvent, and he was made bankrupt some time later . .
Cited – Haines v Hill and Another CA 5-Dec-2007
On the divorce, the husband was ordered to transfer his share in the house to the wife. On his bankruptcy shortly after, the order was confirmed. After the wife sold the property at a profit, the trustee in bankruptcy applied to set the transfer . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Family, Land

Updated: 01 May 2022; Ref: scu.253164

Albert v Albert: 1996

The court considered the duty of a family court when deciding ancillary relief applications where the husband is bankrupt. Millett LJ said: ‘The Family Division is concerned to ascertain the amount of the bankrupt’s income and to decide how much of that income should be made available to maintain the wife and child. In making its determination it must ascertain the amount of the bankrupt’s income as best it may, on the evidence put before it. But the amount of that income will be affected by any order that the Insolvency Court has made, or may subsequently make , which has the effect of diverting the bankrupt’s income in or towards payment of his creditors. The Family Division is concerned with the division of the cake, but the size of the cake is liable to be diminished by an order made by the Insolvency Court.’

Judges:

Millett LJ

Citations:

[1996] BPIR 233

Jurisdiction:

England and Wales

Cited by:

Cited – Hill and Another v Haines ChD 3-May-2007
The husband and wife had separated and divorced. In ancillary proceedings, the family home had been transferred to the wife under a court order. The judge had noted that the husband was hopelessly insolvent, and he was made bankrupt some time later . .
Lists of cited by and citing cases may be incomplete.

Family, Insolvency

Updated: 01 May 2022; Ref: scu.253165

Re Kumar (A Bankrupt), ex parte Lewis v Kumar: 1993

H had transferred his interest in the jointly owned matrimonial home to W for her promise to have sole liability for the mortgage debt. Nearly a year later her divorce claim for capital provision was dismissed by consent on the basis that H had already transferred his interests to W. H was bankrupted, and his trustee applied under Section 339. The trustee relied on both paragraphs (a) and (c) of Section 339(3). He said that the consideration supporting the transfer of the bankrupt’s interest was a release of such claims as she might have had under the 1973 Act, sections 23-25.
Held: The assertion failed. The transfer of the property happened before the divorce and there was no evidence to support the contention that the transfer was in return for the Respondent agreeing not to apply for further capital provision under Sections 23-25. Ferns J said: ‘Re Abbott, although it is a decision on Section 42 of the Act of 1914, is applicable to section 339 to the extent that it decides that a compromise of a claim to a provision in matrimonial proceedings is capable of being consideration in money or money’s worth’.
W’s counsel submitted that W had provided consideration. Ferns J said: ‘I would add that even if I had accepted the argument that there was such a compromise of Dr. Gupta’s prospective claim for capital provision as was contended for on her behalf, it appears to me that I would have been driven to substantially the same conclusion. The transfer of Mr. Kumar’s interest in 43, Broadwalk was a disposal of his only remaining capital asset of any significance. I cannot believe that any divorce court would have so exercised its jurisdiction under section 24 of the Matrimonial Causes Act 1973 as to require Mr. Kumar to transfer to Dr. Gupta, who had a superior earning capacity, substantially the whole of his capital, leaving him without the means to contribute from capital to the cost of acquiring a separate home for himself. In my view, in all the circumstances of this case as I find them, the transfer of his interest in 43, Broadwalk, contained a substantial element of bounty on the part of Mr. Kumar even if, as I find not to be the case, Dr. Gupta had agreed in return not to seek further provision out of capital.’

Judges:

Ferns J

Citations:

[1993] 1 WLR 224

Statutes:

Insolvency Act 1986 339, Matrimonial Causes Act 1973 23 24 25

Citing:

Applied – Re Abbot (A Bankrupt), ex parte Trustee Of The Property Of The Bankrupt v Abbot QBD 1983
An ancillary relief order was made in December 1978, following a compromise agreement. It provided for the sale of the former matrimonial home and the payment to the wife from the proceeds of sale of andpound;18,000. The husband was adjudicated . .
Cited – In re Abbott ChD 1983
W divorced H, and under a property adjustment order made by consent, the jointly owned matrimonial home was transferred to her outright. H was made bankrupt less than two years later, and the trustee sought a declaration that the consent order or . .

Cited by:

Cited – Hill and Another v Haines ChD 3-May-2007
The husband and wife had separated and divorced. In ancillary proceedings, the family home had been transferred to the wife under a court order. The judge had noted that the husband was hopelessly insolvent, and he was made bankrupt some time later . .
Cited – Haines v Hill and Another CA 5-Dec-2007
On the divorce, the husband was ordered to transfer his share in the house to the wife. On his bankruptcy shortly after, the order was confirmed. After the wife sold the property at a profit, the trustee in bankruptcy applied to set the transfer . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Family, Land, Insolvency

Updated: 01 May 2022; Ref: scu.252317

Pritchard v Hitchcock: 6 Jun 1843

P (the plaintiff) had drawn bills requiring WH to pay P a sum of money three months after date. WH accepted them, but to gain more time for WH, GH (the defendant) guaranteed payment of the bills. P pressed for payment. WH did ultimately pay P but was declared bankrupt. WH’s assignees in bankruptcy brought an action against P and obtained recovery of the sum paid as a fraudulent preference. P then sued GH on the guarantee. One defence of GH was that P had been paid and the debt discharged. GH contended that the judgment in favour of the assignees was not admissible to prove non-discharge of the debt.
Held: P was entitled to prove in the circumstances payment by WH had not discharged the debt, but GH was not a party to the assignee action. The matter was ordered to be retried as to whether there had been ‘a real and genuine payment of the bills by the bankrupt.’

Citations:

(1843) 6 Man and G 151, [1843] EngR 760 (B)

Links:

Commonlii

Citing:

See Also – Cook And Others, Assignees Of Williams Hitchcock, A Bankrupt, v Pritchard 15-Jan-1843
. .

Cited by:

Cited – Lloyds Bank Plc v Independent Insurance Co Ltd CA 26-Nov-1998
The bank had made an electronic transfer of funds for a customer in satisfaction of that customer’s proper debt, but it was done under a mistake of fact as to the cleared status of funds received.
Held: The appeal was turned down. The bank was . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Contract

Updated: 01 May 2022; Ref: scu.246226

In re Lowrie: 1981

When a judgment creditor applies for an order for sale of a property subject to a Charging Order, the competing equities of the parties will be carefully weighed.

Citations:

[1981] 3 All ER 353

Cited by:

Cited – Nicholls v Lan and Another ChD 26-May-2006
The bankrupt had been discharged from his bankruptcy, but his share in the family home remained vested in the trustee who applied for the sale of the home. His wife applied to set aside an order for sale on the basis that it interfered with her . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 01 May 2022; Ref: scu.244712

Re Yates (A Bankrupt): 2004

The court considered the application of the limitation to a claim by a trustee in bankruptcy to set aside a transaction at an undervalue.
Held: Charles J: ‘If there is a limitation period, the passages in Muir Hunter suggest that in the case of a claim by a trustee in bankruptcy begins to run from the date of the bankruptcy order. Counsel for the trustee made the same submission on the basis that that is the date when the cause of action accrued to the trustee. I agree.’

Judges:

Charles J

Citations:

[2004] All ER (D) 373, [2005] BIPR 476

Cited by:

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 – 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.

Limitation, Insolvency

Updated: 01 May 2022; Ref: scu.244185

Re: BCCI (No.10): ChD 1997

The liquidators of BCCI in different jurisdictions had created a pooling agreement in the liquidation of the place of the company’s incorporation, namely Luxembourg to which all assets were to be remitted and in which all creditors were to share pari passu. Two problems arose. English law allowed set-off so that to the extent of the set-off a creditor was in effect secured but the law of Luxembourg did not. Also some creditors were entitled to prove in England but not in Luxembourg. The English liquidators applied to the court in England for directions.
Held: The court in England had no inherent power to disapply at its discretion substantive parts of the statutory scheme: ‘The accumulation of judicial endorsements of the concept of ancillary liquidations have, in my judgment, produced a situation in which it has become established that in an ‘ancillary’ liquidation the courts do have power to direct liquidators to transmit funds to the principal liquidators in order to enable a pari passu distribution to worldwide creditors to be achieved. The House of Lords could declare such a direction to be ultra vires. But a first instance judge could not do so and I doubt whether the Court of Appeal could do so.
But the judicial authority which has established the power of the court to give, in general terms, the direction to which I have referred has certainly not established the power of the court to disapply rule 4.90 or any other substantive rule forming part of the statutory scheme under the Act and Rules of 1986. Nor, in my opinion, has this line of judicial authority established the power of the court to relieve English liquidators in an ancillary winding up of the obligation to determine whether proofs of debt submitted to them should be admitted or to see to it, so far as they are able to do so, that creditors whose claims they do admit receive the pari passu dividend to which, under the statutory insolvency scheme, they are entitled.’

Judges:

Sir Richard Scott V-C

Citations:

[1997] Ch 213

Jurisdiction:

England and Wales

Cited by:

Cited – 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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 01 May 2022; Ref: scu.244193

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 not a fraud on the bankruptcy laws as giving the owner company an undue advantage in the event of the hirer company going into liquidation. The provision was not a deliberate device to secure that more money went to the creditor: ‘it would be extravagant . . to suggest that this clause is aimed at defeating the bankruptcy laws or at providing for a distribution differing from that which the bankruptcy laws permit’ and ‘the penalty area is limited to the narrow field which I have described’.

Judges:

Justice Gorman

Citations:

[1942] Ch 108

Cited by:

Approved – Philip Bernstein (Successors) Ltd v Lydiate Textiles Ltd; orse Sterling Industrial Facilities v Lydiate Textiles Ltd CA 26-Jun-1962
Lord Justice Diplock: ‘. . the ordinary rule which the courts apply is that contracts should be enforced, pacta sunt servanda, unless they can be brought within that limited category of cases in which, for reasons of public policy, the court refuses . .
Approved – Export Credits Guarantee Department v Universal Oil Products HL 1983
A contract provided for the payment of a stated sum by one party to the contract (A) to the other party (B) in the event of the non-performance by A of one of more contractual obligations owed by A not to B himself but to C, who was not a party to . .
Cited – Euro London Appointments Ltd v Claessens International Ltd CA 6-Apr-2006
The court considered whether a clause in an employment agency’s terms and conditions amounted to a penalty and was unenforceable. The contract provided that if the offer was withdrawn by the eventual employer after acceptance but before 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 . .
Lists of cited by and citing cases may be incomplete.

Contract, Insolvency

Updated: 01 May 2022; Ref: scu.240154

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.’
After referring to the extent to which the principle should be carried, he continued: ‘But the principle itself – that an insolvent estate, whether wound up in Chancery or in Bankruptcy, ought not to pay two dividends in respect of the same debt – appears to me to be a perfectly sound principle. If it were not so, a creditor could always manage, by getting his debtor to enter into several distinct contracts with different people for the same debt, to obtain higher dividends than the other creditors, and perhaps get his debt paid in full. I apprehend that is what the law does not allow; the true principle is, that there is only to be one dividend in respect of what is in substance the same debt, although there may be two separate contracts.’

Judges:

Mellish LJ

Citations:

(1871) LR 7 Ch App 99

Jurisdiction:

England and Wales

Cited by:

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 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 . .
Lists of cited by and citing cases may be incomplete.

Equity, Insolvency

Updated: 01 May 2022; Ref: scu.238735

Anglo-Manx Group Ltd v Aitken: 2002

The court discussed the case of Cottrell v Price: ‘There was considerable argument before me as to what is meant by the words ‘in the bankruptcy’ as distinct from the words ‘outside the bankruptcy’. Mr Adair submitted that the question can be formulated in this way. Is the claim being directed at property within the statutory trust, or does it relate to property outside of the trust: for example, after-acquired property, or property which cannot form part of the estate. It seems to me that this is the correct formulation and is consistent with the analysis of Buckley J in Cottrell -v- Price.’

Judges:

John Jarvis QC

Citations:

[2002] BPIR 215

Citing:

Cited – Cottrell v Price 1960
The rights of a secured creditor against his security were held to be rights ‘outside the bankruptcy’. As to the case of Benzon: ‘The importance of that case and of the way in which the doctrine is stated in the judgment of the Court is that it . .

Cited by:

Cited – Doodes v Gotham, Perry ChD 17-Nov-2005
The trustee in bankruptcy had taken a charge on the property in 1992 to support the bankruptcy in 1988. He sought to enforce it in 2005. The chargor appealed an order which denied he was protected by limitation.
Held: The appeal succeeded. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Limitation

Updated: 30 April 2022; Ref: scu.235333

Moss Steamship Co v Whinney: 1912

The appointment of a receiver: ‘entirely supersedes the company in the conduct of its business, deprives it of all power to enter into contracts in relation to that business, or to sell, pledge or otherwise dispose of the property put into the possession or under the control of the receiver and manager. Its powers in these respects are entirely in abeyance.’

Judges:

Lord Atkinson

Citations:

[1912] AC 254

Jurisdiction:

England and Wales

Cited by:

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

Insolvency

Updated: 30 April 2022; Ref: scu.230282

Capita Financial Group Ltd v Rothwells Ltd: 20 Apr 1989

(New South Wales) The parties had guaranteed borrowings of a third party. The plaintiff had paid on call, and now sought a contribution from the defendant. After issue, the defedant began a winding up petition. The plaintiff sought leave to continue the action.
Held: It was a given that a plaintiff in this position must demonstrate a prima facie case. It had not done so here, but an arguable case had been shown, and this could be supplemented later by affidavit evidence. The claim could proceed.

Judges:

Rogers CJ

Citations:

(1989) 15 ACLR 348

Links:

NSW

Cited by:

Cited – Enron Metals and Commodity Ltd (in Administration) v HIH Casualty and General Insurance Limited ChD 10-Mar-2005
The claimant company sought leave whilst in administration to bring arbitration proceedings against the defendant insurers.
Held: In exercising the discretion given by the section, the court had only to decide whether the claim was so bad that . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Litigation Practice, Commonwealth

Updated: 30 April 2022; Ref: scu.225880

In Re Hartlebury Printers Ltd: 1992

Insolvency, at least per se, does not amount to a special circumstance exempting an employer from consulting employees on redundancy. Morritt J noted the distinction in the Directive between contemplated and projected redundancies and section 99 to an employer ‘proposing to dismiss’ and said: ‘The Union contends that both those sections should be construed to give effect to the Directive so that the duty under section 99 arises when an employer has redundancies in contemplation. That it is the duty of the Court, if possible, to construe United Kingdom legislation so as to comply with the United Kingdom’s obligations under an EEC Directive is not in doubt. But that must be achieved, if at all, by proper processes of construction, not so far as the Court is concerned by the equivalent of legislation.
Dealing first with the Directive, it seems to me that the word ‘projected’ in Article 3 is used in the sense of ‘then intended’ after the processes of consultation with the Union had been completed.’ . . Thus the contemplation referred to in Article 2(1) is something less than intention. Nevertheless, the range of mental states included within the word is wide. It would extend from merely ‘thinking about’ to ‘having in view or expecting’. In the latter sense, but not the former, the word would equate with the verb to propose . . Approaching that problem from the wording of section 99 I think it is clear, not least from subsection (5) that the phrase ‘an employer proposing to dismiss as redundant’ cannot include one who is merely thinking about the possibilities of redundancies. Thus I cannot construe the word ‘proposing’ to embrace the full range of the possible meaning of the word ‘contemplating’ but I can construe ‘contemplating’ in a sense equivalent to ‘proposing’. Article 2 (1) of the Directive has not, so far as I know, been construed by the European Court of Justice. Thus I assume, because it is for the Court of Justice and not for me to decide, that section 99 does comply with the United Kingdom’s obligations.’

Judges:

Morritt J

Citations:

[1992] ICR 559, [1993] BCLC 902

Statutes:

Employment Protection Act 1975 99

Cited by:

Cited – Enron Metals and Commodity Ltd (in Administration) v HIH Casualty and General Insurance Limited ChD 10-Mar-2005
The claimant company sought leave whilst in administration to bring arbitration proceedings against the defendant insurers.
Held: In exercising the discretion given by the section, the court had only to decide whether the claim was so bad that . .
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 – MSF v Refuge Assurance Plc, United Friendly Insurance EAT 15-Feb-2002
EAT The EAT considered the employer’s duties to consult on making redundancies. The ET had found that company had satisfied the requirements. The Union argued that the duty to consult arose as soon as . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Employment, European

Updated: 30 April 2022; Ref: scu.225879

Guy v Churchill: 1888

There could be no objection to an assignment by the trustee in bankruptyc of a cause of action in return for a share of the proceeds, which ‘apart from the bankruptcy law . . is plainly void for champerty.’

Judges:

Chitty J

Citations:

(1888) 40 ChD 481

Cited by:

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

Insolvency

Updated: 30 April 2022; Ref: scu.223197

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 for consequential damage to a company’s business or to particular contractual commitments may, on ordinary principles of causation and mitigation, be attributable factually to acts of trespass and conversion committed by invalidly appointed receivers: but not in this case.

Judges:

Lord Hanworth MR, Lawrence and Romer LJJ

Citations:

[1934] 1 Ch 1

Jurisdiction:

England and Wales

Cited by:

Cited – OBG Ltd OBG (Plant and Transport Hire) Ltd v Raymond International Ltd; OBG Ltd v Allen CA 9-Feb-2005
The defendants had wrongfully appointed receivers of the claimant, who then came into the business and terminated contracts undertaken by the business. The claimant asserted that their actions amounted to a wrongful interference in their contracts . .
Lists of cited by and citing cases may be incomplete.

Torts – Other, Insolvency

Updated: 30 April 2022; Ref: scu.222998

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 on an occasion where the plaintiff was absent was such as could reasonably be expected to reach the plaintiff. A reasonable time was implied, and the seizure was not justified.

Citations:

(1868) LR 4 EXD 13

Cited by:

Cited – OBG Ltd OBG (Plant and Transport Hire) Ltd v Raymond International Ltd; OBG Ltd v Allen CA 9-Feb-2005
The defendants had wrongfully appointed receivers of the claimant, who then came into the business and terminated contracts undertaken by the business. The claimant asserted that their actions amounted to a wrongful interference in their contracts . .
Lists of cited by and citing cases may be incomplete.

Contract, Insolvency

Updated: 30 April 2022; Ref: scu.223011

Garland v Ralph Pay and Ransom: 1984

Receivers taking possession of a property are not under an obligation to make the property more attractive before marketing it.

Judges:

Nicholls J

Citations:

[1984] 2 EGLR 147

Cited by:

Cited – Lloyds Bank Plc and others v Cassidy CA 1-Dec-2004
The defendant sought leave to appeal against orders for possession. The trial had been transcribed by the claimant. At the start of the application, a copy of the transcript was given to the judge but not the defendant despite his application.
Lists of cited by and citing cases may be incomplete.

Land, Insolvency

Updated: 30 April 2022; Ref: scu.221431

In re Ballast plc (in Administration) and Others: ChD 21 Oct 2004

The administrator sought to move direct from an administration to insolvency proceedings without first closing the administration by a court order.
Held: The 2002 was intended to allow such a procedure.

Judges:

Blackburne J

Citations:

Times 28-Oct-2004, [2005] 1 WLR 1928

Statutes:

Enterprise Act 2002

Jurisdiction:

England and Wales

Cited by:

Comments disapproved – In re GHE Realisations Ltd (In Administration) ChD 4-Nov-2005
The administrators having made a distribution, concluded that no further assets would be recovered and sought directions from the court to allow them to withdraw and close the administration.
Held: The court had power to make the order . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 30 April 2022; Ref: scu.219440

In re Primlaks (UK) Ltd: 1989

A prerequisite to making an administration order under section 8(1) is that the court considers making such an order ‘would be likely to achieve’ one of the statutory purposes.
Held: This required the court to be satisfied there is a ‘prospect sufficiently likely in the light of all the other circumstances of the case to justify making the order’.

Judges:

Vinelott J

Citations:

[1989] BCLC 734

Statutes:

Insolvency Act 1986 8(1)

Jurisdiction:

England and Wales

Cited by:

Cited – Cream Holdings Limited and others v Banerjee and others HL 14-Oct-2004
On her dismissal from the claimant company, Ms Banerjee took confidential papers revealing misconduct to the local newspaper, which published some. The claimant sought an injunction to prevent any further publication. The defendants argued that the . .
Cited – Regina v Guildhall Magistrates’ Court, ex parte Primlaks Holdings Co. (Panama) Inc 1990
The exercise of a power of search is a draconian power. . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Insolvency

Updated: 30 April 2022; Ref: scu.216440

Re Continental Assurance Co of London plc (No.2): 1988

Directors of a company in creditors’ voluntary liquidation sought to strike out an application by the liquidators seeking relief against them for wrongful trading and breach of fiduciary duty. They asserted that the liquidators’ application was procedurally irregular since it had been made by way of ordinary application, rather than by an originating application.
Held: The proceedings should have been started by originating application: ‘The practice of the court, as I understand it, is this. Where there has been a compulsory winding up, insolvency proceedings have started pursuant to which applications can be made by way of ordinary application. It is the practice to use ordinary applications where the relief being sought is relief particular to the liquidator or to the general body of creditors as represented by him. Thus, applications to set aside transactions for preference are normally brought where there is a compulsory liquidation by ordinary application. The position is different where, as here, the winding up is a creditors’ voluntary winding up. That, notwithstanding the submissions of Mr Atherton, is not, in my judgment, a proceeding so as to constitute an insolvency proceeding within r7. It does not seem to me that it is possible to say that where, in a creditors’ voluntary liquidation, an application in another matter has been made by way of originating application, all subsequent court proceedings can be commenced by ordinary application using the number which the first originating application has taken. It seems to me that in a creditors’ winding up, where it is intended to bring proceedings in a particular matter against particular respondents or defendants, an originating application should be issued. It is not without significance that the fee payable on a originating application is considerably greater than that on an ordinary application. These proceedings should have been commenced by originating application.’

Judges:

Evans-Lombe J

Citations:

[1988] 1 BCLC 583

Jurisdiction:

England and Wales

Cited by:

Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Insolvency

Updated: 30 April 2022; Ref: scu.216395

Bradley v Eagle Star Insurance Co Ltd: HL 1989

Mrs Bradley was employed by Dart Mill several times from 1933 and 1970 and acquired byssinosis from inhaling cotton dust. The company was wound up in 1975 and dissolved in 1976. In 1984 she applied to the court for pre-action disclosure under section 33(2) of the Supreme Court Act 1981 and RSC Ord. 24 rule 7A. She wanted to see the terms of Dart Mill’s insurance contracts so that she could, if appropriate, bring a claim under the 1930 Act.
Held: (by a majority) The dissolution of the company meant that it was impossible ever to ascertain the existence and amount of the company’s liability. Lord Templeman (dissenting): on the passing of a resolution for the voluntary winding-up of the insured company, the company’s rights against Eagle Star were transferred to Mrs Bradley, even though the amount of the company’s liability to Eagle Star had not then been established.
Lord Brandon of Oakbrook explained what lay behind the 1930 Act: ‘The historical reason for the passing of the Act of 1930 was to remedy a particular form of injustice which had become apparent from two then recent decisions of the Court of Appeal. (Harrington and Hood’s Trustees) . . These two decisions showed that, even where an injured person obtained a judgment for damages against a wrongdoer, if the wrongdoer being a company went into liquidation, or being an individual became bankrupt, and the judgment had not by then been enforced by execution the monies payable by way of indemnity under any policy of insurance by which the wrongdoer was insured against liability to third parties, did not go solely to benefit the injured person but were payable to the liquidator or trustee in bankruptcy of the wrongdoer for distribution pari passu among all the unsecured creditors. This was recognised to be plainly unjust, and the Act of 1930 was passed to remedy that injustice. . . .’ but it ‘was not passed to remedy any injustice which might arise from other matters; in particular it was not passed to remedy any injustice which might arise as a result of the dissolution of a company making it impossible to establish the existence and amount of the liability of such company to a third party. That kind of situation was not in my view, contemplated by the legislature at all.’

Judges:

Lord Templeman, Lord Brandon of Oakbrook

Citations:

[1989] AC 957, [1989] 1 All ER 961, [1989] 1 Lloyds Rep 465, [1989] 2 WLR 568

Statutes:

Third Parties (Rights Against Insurers) Act 1930

Jurisdiction:

England and Wales

Citing:

Cited – Hood’s Trustees v Southern Union General Insurance Company of Australasia Ltd 1928
H, being insured by the defendant company against liability to third parties, negligently injured C in a road accident. C subsequently brought an action against H for damages, but before he could obtain judgment, H was made bankrupt and the official . .
Cited – Re Harrington Motor Co Ltd, Ex parte Chaplin 1928
A person injured in a road accident had obtained judgment for damages against the company, but had been unable to enforce the judgment before the company went into liquidation. The company’s motor insurers paid the amount of the judgment to the . .
Attacked – Post Office v Norwich Union Fire Insurance Society Ltd CA 1967
A contract of insurance provided an indemnity for ‘all sums which the insured shall become legally liable to pay as compensation in respect of loss of property’. The claim was by the Post Office against a contractor, Potters, for damaging one of . .

Cited by:

Cited – First National Tricity Finance Ltd v OT Computers Ltd; In re OT Computers Ltd (in administration) CA 25-May-2004
The company had gone into liquidation. They had sold consumer policies as extended warranties on behalf of the claimant. The company had insured its own joint liability under the contracts, and the claimant sought information from the company’s . .
Cited – Freakley and Curzon Insurance Ltd v Centre Reinsurance International Company and Another; similar CA 11-Feb-2005
Claims were made for personal injury caused by asbestos. The re-insurers sought declaratory relief against the head insurers, and the administrators of the insolvent company. The administrators sought declarations in turn. Curzon insured the company . .
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 . .
Mentioned – Aer Lingus v Gildacroft Ltd and Another CA 17-Jan-2006
The claimant had been found liable to pay damages for personal injury, and now sought contribution from the defendants. The defendants said that they were out of time since the contribution action had been commenced more than 2 years after the . .
Cited – Law Society of England and Wales and others v Shah and others ChD 30-Nov-2007
Solicitor firms had been made bankrupt leaving a shortfall after thefts from client accounts of over 12 million pounds. The thief had diappeared, and the other partners were now discharged form bankruptcy. The Law Society accepted that it could not . .
Cited – Teal Assurance Company Ltd v WR Berkley Insurance (Europe) Ltd SC 31-Jul-2013
An international engineering company had several layers of professional indemnity insurance. The top later did not cover claims originating in the US or Canada. The several insurers now disputed apportionment of liability between them. The . .
Lists of cited by and citing cases may be incomplete.

Insurance, Insolvency

Updated: 30 April 2022; Ref: scu.198402

Re Harrington Motor Co Ltd, Ex parte Chaplin: 1928

A person injured in a road accident had obtained judgment for damages against the company, but had been unable to enforce the judgment before the company went into liquidation. The company’s motor insurers paid the amount of the judgment to the liquidator, who then treated the injured person as an unsecured creditor with no special interest in the insurance monies.
Held: The liquidator had been right to deal with the matter in that way.

Judges:

Eve J

Citations:

[1928] Ch 105

Cited by:

Cited – First National Tricity Finance Ltd v OT Computers Ltd; In re OT Computers Ltd (in administration) CA 25-May-2004
The company had gone into liquidation. They had sold consumer policies as extended warranties on behalf of the claimant. The company had insured its own joint liability under the contracts, and the claimant sought information from the company’s . .
Cited – Bradley v Eagle Star Insurance Co Ltd HL 1989
Mrs Bradley was employed by Dart Mill several times from 1933 and 1970 and acquired byssinosis from inhaling cotton dust. The company was wound up in 1975 and dissolved in 1976. In 1984 she applied to the court for pre-action disclosure under . .
Cited – Socony Mobil Oil Co Inc v West of England Ship Owners Mutual Insurance Association Ltd (Padri Island) (No 2); Firma CF-Trade SA v Similar (Fanti) CA 30-Nov-1989
The court considered appeals from conflicting interpretations of the effect of s1(3) of the 1930 Act on pay to be paid clauses in the event of the insolvency of the insured.
Held: The condition did not purport to avoid the contract or to alter . .
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 – Freakley and Curzon Insurance Ltd v Centre Reinsurance International Company and Another; similar CA 11-Feb-2005
Claims were made for personal injury caused by asbestos. The re-insurers sought declaratory relief against the head insurers, and the administrators of the insolvent company. The administrators sought declarations in turn. Curzon insured the company . .
Mentioned – Law Society of England and Wales and others v Shah and others ChD 30-Nov-2007
Solicitor firms had been made bankrupt leaving a shortfall after thefts from client accounts of over 12 million pounds. The thief had diappeared, and the other partners were now discharged form bankruptcy. The Law Society accepted that it could not . .
Lists of cited by and citing cases may be incomplete.

Insurance, Insolvency

Updated: 30 April 2022; Ref: scu.198395

In re Dynamics Corpn of America: ChD 1976

No allowance is made in an insolvency for exchange rate fluctuations which affect the sterling value of a debt in foreign currency after the date of the winding up order. The purpose of the rule that debts are valued at the date of winding up is to give effect to the principle of pari passu distribution. It is a principle of fairness between creditors: ‘It is only in this way that a rateable, or pari passu, distribution of the available property can be achieved, and it is, as I see it, axiomatic that the claims of creditors amongst whom the division is to be effected must all be crystallised at the same date . . for otherwise one is not comparing like with like . .’

Judges:

Oliver J

Citations:

[1976] 1 WLR 757

Cited by:

Cited – In re Telewest Communications Plc ChD 26-Apr-2004
A scheme of arrangement had been proposed. The creditor complained that in providing for payment in a currency other than that agreed, it had been prejudiced.
Held: The provision in the scheme did purport to alter the claimant’s rights. . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 30 April 2022; Ref: scu.197912

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 netting-off provisions of the IATA clearing house rules then applied.
Held: (bare majority) It was not open to parties to contract out of mandatory provisions and that any attempt to do so was void. The appeal succeeded. A clearing house arrangement between a large number of airline companies relating to debts arising as between them was ineffective as against the liquidator of one of the companies. Insofar as the arrangement purported to apply to debts which existed when the members of the company passed the resolution to go into creditors’ voluntary liquidation, it would have amounted to contracting out of the statutory requirement that the assets owned by the company at the date of its liquidation should be available to its liquidator, who should use them to meet the company’s unsecured liabilities pari passu, under section 302 of the 1948 Act. Any purported ‘contracting out’ of the insolvency legislation is contrary to public policy, and such contractual provisions will be disapplied.
Lord Cross discussed ex parte Mackay, saying: ‘In Ex p Mackay 8 Ch App 643, the charge on [the] second half of the royalties was . . an animal known to the law which on its face put the charge[e] in the position of a secured creditor. The court could only go behind it if it was satisfied – as was indeed obvious in that case – that it had been created deliberately in order to provide for a different distribution of the insolvent’s property on his bankruptcy from that prescribed by the law.’
Lord Morris of Borth-y-Gest, though dissenting, agreed that Ex p Mackay was a case where the relevant provisions were ‘a clear attempt to evade the operation of the bankruptcy laws’, or ‘a device for defeating the bankruptcy laws’.

Judges:

Lord Cross of Chelsea, Lord Morris of Borth-y-Gest, Lord Diplock and Lord Edmund-Davies

Citations:

[1975] 1 WLR 758, [1975] 2 All ER 390

Statutes:

Companies Act 1948 302

Jurisdiction:

England and Wales

Citing:

Appeal from – British Eagle International Airlines Ltd v Compagnie National Air France CA 1974
. .
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 by:

Cited – Commissioners of Inland Revenue v The Wimbledon Football Club Limited, Ellis, Earp CA 28-May-2004
The Commissioners appealed against a refusal of their application for a revocation of the defendant’s voluntary arrangement in that it had failed to comply with section 4. They complained that the arrangement was unfair to them. It had been agreed . .
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 – 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 . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 30 April 2022; Ref: scu.197873

Re Rica Gold Washing Co: 1879

A contributory, when petitioning for the winding up of a company, must plead in his petition and prove by evidence that, if a winding up order is made, there is a contingent surplus of assets in the winding up which will be available for distribution to him.

Citations:

[1879] 11 ChD 36

Jurisdiction:

England and Wales

Cited by:

Cited – Rodencroft Limited, W. G. Birch Developments Limited, H-M Birch Limited; Simon Allso v The Secretary for State for Trade and Industry ChD 23-Apr-2004
The Secretary of state sought the winding up of the companies saying it was expedient in the public interest to do so. A shareholder opposed this saying that the companies were solvent.
Held: The shareholder had, in the absence of any position . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 29 April 2022; Ref: scu.197024

Oppenheimer v British and Foreign Exchange and Investment Bank: 1877

A court can give a liquidator leave to distribute, thus protecting him from any risk of personal liability, but only if he retained a sum sufficient when invested at compound interest to fund future liabilities.

Citations:

(1877) 6 Ch D 744

Jurisdiction:

England and Wales

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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 29 April 2022; Ref: scu.197015

In re Metropolis Estates Co Ltd: CA 1940

Citations:

[1940] 3 All ER 522

Jurisdiction:

England and Wales

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 . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Insolvency

Updated: 29 April 2022; Ref: scu.197014

Bows v Hope Life Insurance and Guarantee Co: HL 1865

In the case of a creditor’s petition not opposed by other creditors: ‘I agree with what has been said, that it is not a discretionary matter with the court when a debt is established, and not satisfied, to say whether the company should be wound up or not; that is to say if there be a valid debt established, valid both at law and in equity. One does not like to say positively that no case could occur in which it would be right to refuse it; but, ordinarily speaking, it is the duty of the court to direct the winding up.’

Judges:

Lord Cranworth

Citations:

[1865] 11 HL Cas 389

Jurisdiction:

England and Wales

Cited by:

Cited – Re Camburn Petroleum Products Ltd ChD 1979
The court heard a contributors’ petition. The directors were in deadlock with equal shareholdings. The petition was not making good progress, and a creditor’s petition was then issued. The shareholder sought a stay.
Held: There was a . .
Cited – Rodencroft Limited, W. G. Birch Developments Limited, H-M Birch Limited; Simon Allso v The Secretary for State for Trade and Industry ChD 23-Apr-2004
The Secretary of state sought the winding up of the companies saying it was expedient in the public interest to do so. A shareholder opposed this saying that the companies were solvent.
Held: The shareholder had, in the absence of any position . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 29 April 2022; Ref: scu.197020

Dublin City Distillery (Great Brunswick Street, Dublin) Limited and Another v Doherty: HL 1914

D had advanced monies to a distillery company on the security of manufactured whisky stored in a warehouse. On the occasion of each advance, the company delivered to D an invoice and a warrant which described the particulars of the whisky and stated that it was deliverable to D or his assigns.
Held: A person against whom the unauthorised liquidator is litigating may not object to such lack of authorisation, for it is a matter between the liquidator and the creditors. Lord Parker stated: ‘in my opinion s.151 of the Companies (Consolidation) Act, 1908, which enables a liquidator in the case of a winding-up in Ireland to bring or defend legal proceedings with the sanction of the Court, was not intended to confer, and does not confer, on third parties any right to object to proceedings brought by a liquidator in the name of the company, on the ground that no such sanction has been obtained.’
Delivery of the subject property is absolutely necessary to complete a pledge, although the transfer of possession may be actual or constructive: ‘There are, however, cases in which possession may pass to the pledgee without actual delivery, for example, whenever there is some agreement between the parties the effect of which is to change the possession of the pledger from a possession on his own account as owner into a possession as bailee for the pledgee: see Meyerstein v. Barber.(1) Such an agreement operates as a delivery of the goods to the pledgee and a redelivery of the goods by the pledgee to the pledger as bailee for the purposes mentioned in the agreement. A mere book entry cannot, however, have this effect . .’
The terms of the warrant were ambiguous. Lor Parker said that if the true meaning of the warrant was that it was intended to be an acknowledgement by the distillery company that it held the goods referred to as bailee for D or his assigns by indorsement: ‘it is sufficient to change the nature of the company’s possession, operating as an actual delivery of the goods to [D], and a redelivery of the same goods by him to the company to hold as bailee for him. Under these circumstances, on the hypothesis that the company was in actual possession, [D] obtained a good pledge at common law.’

Judges:

Lord Parker of Waddington

Citations:

[1914] AC 823, 111 LT 8

Statutes:

Companies (Consolidation) Act 1908

Jurisdiction:

England and Wales

Cited by:

Cited – Borealis Ab v Stargas Limited and Others and Bergesen Dy A/S Berge Sisar Dorealis Ab v Stargas Limited and Others HL 27-Mar-2001
The ship came to port, and samples of the cargo proved contaminated. The carrier asserted that the consignee was to be deemed to have demanded delivery, and had so assumed the risk. The court found that the mere taking of samples was not such a . .
Lists of cited by and citing cases may be incomplete.

Equity, Company, Insolvency

Updated: 29 April 2022; Ref: scu.194545

In re London Metallurgical Co: 1985

A costs order made against liquidators arising from proceedings they had taken, will usually have priority over the general expenses of the action. The list of expenses said nothing about the costs of litigation incurred by the liquidator or awarded against him. Costs awarded to a successful litigant had been recoverable in priority to the general costs of the liquidation. Rule 31 of the 1890 Insolvency rules did not change this practice.

Judges:

Vaughan-Williams J

Citations:

[1895] 1 Ch 758

Jurisdiction:

England and Wales

Cited by:

Cited – Digital Equipment Co Ltd and Others v Bower and Others ChD 4-Dec-2003
The liquidators had lost their legal action, and had been ordered to pay the present claimants their costs. They sought payment out of an insolvency services account in competition with the solicitors for the liquidators.
Held: An award of . .
Cited – Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Costs

Updated: 29 April 2022; Ref: scu.190088

Regina v Theivendran: CACD 1992

For eight offences of being concerned with the management of a company whilst an undischarged bankrupt, a sentence of nine months’ imprisonment was reduced to six months. There had been a breach of the order but there had been no dishonesty, and indeed any deficiency had been paid off after winding up, and there had been no previous offences of a similar kind, a possible aggravating feature. A submission that a sentence of imprisonment would be wrong in principle, where there was a plain flouting of the order but no dishonesty, was rejected. If the contravention had been flagrant, that is to say deliberate or reckless, a custodial sentence would in principle be appropriate.

Citations:

(1992) 13 Cr App R (S) 601

Jurisdiction:

England and Wales

Cited by:

Distinguished – Regina v Vandervell CACD 30-Oct-1997
The defendant had been convicted of being involved in the management of a company and of obtaining credit, whilst being an undischarged bankrupt.
Held: These were serious and repeated offences. The sentence of four years and three months . .
Applied – Regina v Smethurst CACD 1-Feb-1999
The defendant appealed a sentence of four months for being involved as an undischarged bankrupt in the management of a company.
Held: The sentence was appropriate. The behaviour was exaclty that sought to be prevented by the rules against . .
Lists of cited by and citing cases may be incomplete.

Criminal Sentencing, Insolvency

Updated: 29 April 2022; Ref: scu.187452

Re Badham ex parte Palmer: 1893

The debtor made payments to creditors after the bankruptcy petition had been presented, and after the act of bankruptcy. After the debtor had been adjudicated bankrupt the trustee in bankruptcy sought to recover the payments as fraudulent preferences. The application could not succeed on this ground, since the payments were made after presentation of the petition; but it succeeded on the ground that, because of the doctrine of relation back, the debtor had paid the creditors out of money belonging to the trustee. The question then arose whether the transactions were covered by the section which protected persons who dealt bona fide and for value with the bankrupt during the period of relation back. In relation to the effect of the relation back, it was.
Held: ‘What state of things does that leave? The title of the trustee relates back to the petition (sic). The payments were made after the petition. Prima facie, therefore, the payments were made by the bankrupt out of moneys which belonged to the trustee . . What has happened is that there has been a disposal of moneys which prima facie did not belong to the bankrupt at all, but belonged to his trustee . . I hold that the money was the property of the trustee at the time when the bankrupt paid it away and the case does not come within the protecting section.’

Judges:

Vaughan Williams J

Citations:

[1893] 10 Mor 252

Statutes:

Bankruptcy Act 1883 49

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

Updated: 29 April 2022; Ref: scu.186756

Montefiore v Guedalla: 1901

The bankrupt had a protected life interest in a trust fund under the will of his late father which was defeasible inter alia if he should do or omit to do or should suffer to be done any act whereby the income of the trust fund if payable to himself should become vested in some other person or persons. He committed an act of bankruptcy by failing to comply with a bankruptcy notice and was adjudicated bankrupt. Was an apportioned part of a dividend which had been received by the trustees of the will after the adjudication (but part of which had accrued in respect of the period before and part in respect of the period after the act of bankruptcy) payable to the trustee in bankruptcy or was it applicable under the gift over in the will.
Held: For the trustees of the Will. The right to receive the dividend, though payable after adjudication, had vested in the official receiver by virtue of the doctrine of relation back at the date of the act of bankruptcy; and was therefore forfeited as from that date. The court rejected the argument of the official receiver that under the section 54 the property did not vest in the official receiver until adjudication, and that it was not until then that the bankrupt had suffered something to be done which caused the property to be vested in someone else. ‘Let us, then, consider for a moment what would have been the result if the act of bankruptcy had occurred on July 8, the dividend had been payable on October 5, and the adjudication had taken place on October 10. There would then have vested in the official receiver all the property of the bankrupt from July 8 onwards, including the dividend of October 5. By virtue of what act or omission by the debtor would the dividend of October 5 have vested in the official receiver? It appears to me that it would have been by virtue of this act or omission, namely that he failed on July 8 to comply with the bankruptcy notice. Did he then do anything whereby the dividend of October 5 became vested in some other person or persons? I answer Yes. The act which produced this result would be not the act of the Court in adjudicating him a bankrupt, but his act to which it related back. it would be because the act was before October 5 that the dividend would vest in the official receiver.’ Intermediate income of property disposed of by the debtor during the period of relation back belonged to the trustee in bankruptcy.

Judges:

Buckley J

Citations:

[1901] 1 Ch 435

Statutes:

Bankruptcy Act 1883 54

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

Updated: 29 April 2022; Ref: scu.186758

Titterton v Cooper: CA 1882

The bankrupt was a lessee. His trustee did not disclaim the lease, and the question was whether he was personally liable for the rent which had fallen due between the date of his appointment and the date on which he elected not to disclaim.
Held: He was. Was he personally liable for a quarter’s rent which had fallen due after the date of the act of bankruptcy and before the date of adjudication. He was not.

Citations:

(1882) 9 QBD 476

Jurisdiction:

England and Wales

Cited by:

Approved – Stein v Pope CA 1902
A lessee assigned the lease by an assignment which constituted an act of bankruptcy. He was subsequently adjudicated bankrupt and his trustee disclaimed the lease. During the interval between the assignment of the lease and the date of the . .
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

Updated: 29 April 2022; Ref: scu.186759

Re Bonham ex parte the Postmaster-General: 1879

A bankrupt presented his own petition. It was contended that the relation back of the title of the assignees in bankruptcy to the anterior act of bankruptcy did not affect the rights of the Crown was altered by the 1869 Act
Held: The Act made no change. There was no divesting of the debtor’s property until the trustee was appointed, when the trustee’s title would relate back, but that ‘…the potentiality of something happening afterwards to devest the property is not a parting with his property by the debtor so as to prevent the extent of the Crown affecting that property’. The section did not bind the Crown. In the absence of any statutory provision for relation back, the Crown could only take the property of the debtor at the time of the issue of the writ; if he had previously assigned or transferred his property the Crown could not take it. Accordingly, the question was whether the act of bankruptcy was in fact, and not merely in contemplation of law in consequence of the section, an assignment of the debtor’s property.

Judges:

Sir George Jessel MR

Citations:

(1879) 10 ChD 595

Statutes:

Bankrup[tcy Act 1869 11

Jurisdiction:

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

Updated: 29 April 2022; Ref: scu.186752

Doe d Lloyd v Powell: 1826

A lessee executed a deed by which he conveyed all his real and personal property to trustees for the benefit of his creditors. This was an act of bankruptcy. A commission was issued against him and he was declared bankrupt. He then sought to forfeit the lease for breach of a covenant against assigning the lease without the consent of the lessor.
Held: the assignment, being an act of bankruptcy, was void and did not operate as a valid assignment of the lessee’s interest, with the result that there was no forfeiture. ‘Consequently the bankrupt’s assignment to the trustees not only became void and a nullity ab initio, but was actually avoided by the bankruptcy and the proceedings under the same before any advantage was attempted to be taken of the supposed forfeiture. Under these circumstances, for want of the deed’s operating in law as an assignment, it was not in consideration of law an assignment by the bankrupt; but in that respect the same as if no such deed had ever been executed by him; and we think that the answers given to this by the lessor, viz. that it would then depend on a subsequent contingency (viz. the issuing of a commission andc, whether the bankrupt’s deed would operate a forfeiture or not, and that it would be good in the interim) is no sufficient answer to this objection against the forfeiture, the bankrupt’s deed being void and avoided ab initio, and the title of the assignees of the bankrupt’s estate and effects commencing by relation from the time of execution of that deed…In consequence of that contingency (viz. the proceedings under the bankruptcy having taken place), no assignment (the event on which the forfeiture was to arise) has in effect happened…’

Judges:

Holt J

Citations:

(1826) 5 B and C 11

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

Updated: 29 April 2022; Ref: scu.186749

Re North Australian Territory Co: 1890

The powers given under the sections should not be used oppressively.

Citations:

(1890) 45 Ch D 87

Statutes:

Companies Act 1862 115 117

Cited by:

Cited – Official Receiver v Wadge Rapps and Hunt (a firm) and another and two other actions HL 31-Jul-2003
(Orse In re Pantmaenog Timber Co Ltd)
The Receiver sought to use information obtained under section 236 (documents recovered from the directors’ solicitors) in disqualification proceedings.
Held: The appeal succeeded. The Act had . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 29 April 2022; Ref: scu.186361