Category: Insolvency

Trustee of the Property of F C Jones and Sons (A Firm) v Jones: CA 13 May 1996

A bankruptcy order was made in 1984. Under the 1914 Act the trustee in bankruptcy got title to all the assets of the bankrupt as of the date of the act of bankruptcy. So, the trustee owned the partnership assets. The wife drew andpound;11,700 out of those assets and invested in potato futures. By November 1984, she had made andpound;50,000 using that money. The trustee sought to recover that sum.
Held: It was the fruit of his money. A trustee in bankruptcy was entitled to an account of profits of investments withheld from him.

Judges:

Miller LJ

Citations:

Gazette 22-May-1996, Times 13-May-1996, [1997] Ch 159

Statutes:

Bankruptcy Act 1914

Jurisdiction:

England and Wales

Cited by:

Cited – Foskett v McKeown and Others HL 18-May-2000
A property developer using monies which he held on trust to carry out a development instead had mixed those monies with his own in his bank account, and subsequently used those mixed monies to pay premiums on a life assurance policy on his own life, . .
Cited – Smithkline Beecham Plc Glaxosmithkline UK Ltd and Another v Apotex Europe Ltd and others (No 2) CA 23-May-2006
The parties to the action had given cross undertakings to support the grant of an interim injunction. A third party subsequently applied to be joined, and now sought to take advantage of the cross undertakings to claim the losses incurred through . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Equity

Updated: 10 April 2022; Ref: scu.90004

Rooney v Cardona and Others: CA 4 Mar 1999

A joint life first death policy had been paid out to a bankrupt surviving husband. Since the policy was taken out for the benefit of the spouse under the Act, the husband received it in his capacity as a beneficiary and not as a trustee and he could not give good receipt for the proceeds.

Citations:

Times 04-Mar-1999

Statutes:

Married Women’s Property Act 1882 11

Jurisdiction:

England and Wales

Wills and Probate, Insolvency

Updated: 10 April 2022; Ref: scu.88858

in Re Pavlou (A Bankrupt): ChD 17 Mar 1993

Mr and Mrs Pavlou bought a house for andpound;12,500 with a mortgage of andpound;9,500. After the husband left, the wife remained in sole occupation, and paid the mortgage instalments as they fell due. Thirteen years after the marriage Mrs Pavlou obtained a decree nisi of divorce, and less than a year later the husband was made bankrupt. The joint tenancy was thereby severed, and they then owned the property as tenants in common in equal shares. It was agreed that there would have to be an order for sale and an equitable accounting.
Held: There would have to be an inquiry whether an occupation rent should be set-off against the mortgage interest payments. A court of equity will order an inquiry and payment of occupation rent, not only in the case where the co-owner in occupation has ousted the other, but in any other case in which it is necessary in order to do equity between the parties that an occupation rent should be paid. If a tenant in common leaves the property voluntarily, but would be welcome back and would be in a position to enjoy his or her right to occupy, it would normally not be fair or equitable to the remaining tenant in common to charge him or her with an occupation rent which he or she never expected to pay.
Millett J said: ‘The trustee in bankruptcy submits that there is no equitable accounting between beneficial joint tenants but only between tenants in common, on the ground that beneficial joint tenants own the entire property per mie et per tout, so that expenditure by one is expenditure on his or her own property, and cannot be described as laid out in part in the improvement of the share of the other co-owner. Accordingly, he submits, the wife is not entitled to be reimbursed for any expenditure by her before the date of the bankruptcy order.
In my judgment there is no distinction between a beneficial tenancy in common and a beneficial joint tenancy. In neither case could a co-owner obtain contribution from his or her co-owner; any reimbursement had to wait a suit for partition or an order by the court for sale of property. On a partition suit or an order for sale, adjustments could be made between the co-owners, the guiding principle being that neither party could take the benefit of an increase in the value of the property without making an allowance for what had been expended by the other in order to obtain it: see Leigh v Dickeson (1884) 15 QBD 60, [1881-5] All ER Rep 1099. That was a case of tenants in common, but in my judgment the same principle must apply as between joint tenants; the question only arose on a partition or on the division of the proceeds of sale, the very point of time at which severance occurred if there was a joint tenancy. The guiding principle for the court of equity is that the proportions in which the entirety should be divided between former co-owners must have regard to any increase in its value which has been brought about by means of expenditure by one of them.’
As to occupation rents, Millet J said: ‘I take the law to be to the following effect. First, a court of equity will order an inquiry and payment of occupation rent, not only in the case where the co-owner in occupation has ousted the other, but in any other case in which it is necessary in order to do equity between the parties that an occupation rent should be paid. The fact that there has not been an ouster or forceful exclusion therefore is far from conclusive. Secondly, where it is a matrimonial home and the marriage has broken down, the party who leaves the property will, in most cases, be regarded as excluded from the family home, so that an occupation rent should be paid by the co-owner who remains. But that is not a rule of law; that is merely a statement of the prima facie conclusion to be drawn from the facts. The true position is that if a tenant in common leaves the property voluntarily, but would be welcome back and would be in a position to enjoy his or her right to occupy, it would normally not be fair or equitable to the remaining tenant in common to charge him or her with an occupation rent which he or she never expected to pay.’

Judges:

Millett J

Citations:

Gazette 17-Mar-1993, [1993] 1 WLR 1046, [1993] 3 All ER 955

Jurisdiction:

England and Wales

Citing:

Cited – Leigh v Dickeson 1884
The principles of equitable accounting apply equally to beneficial tenancies in common and beneficial joint tenancies. The guiding principle is that neither party can take the benefit of an increase in the value of the property without making an . .

Cited by:

Cited – Byford v Butler; In re Byford deceased ChD 10-Jun-2003
The house was owned in joint names. The husband became bankrupt, and the wife continued to pay the mortgage as to interest and capital. The trustee sought a declaration as to the ownership of the interests in the house. After the husband died, the . .
Cited – Grimm v Newman and Another ChD 1-Nov-2001
Mr Grimm was given advice about the tax consequences of bring foreign investments into the country as a gift to his wife so that she could purchase property. He was advised that it would not have adverse tax consequences, but after the event he was . .
Cited – Clarke v Harlowe ChD 12-Aug-2005
The parties lived together. They acquired between them several properties of which the last was declared to be held as joint tenants. The relationship broke down. The parties now sought a declaration as to the destination of the proceeds of sale, . .
Cited – Murphy v Gooch CA 27-Jun-2007
The unmarried parties had sought an order from the court as to their respective interests in their former family home.
Held:The judge had been incorrect to make his decsion based on the principles of equitable accounting. He should have used . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Land, Equity

Updated: 09 April 2022; Ref: scu.85852

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 prevent those who voluntarily were officers or otherwise participated in the formation or running of an English company to be capable of being summoned by the English court for public examination. Further, Parliament had provided for the winding up of foreign companies, where there was a sufficient connection with the jurisdiction, knowing that section 133 should apply in such a case, thus indicating an intention that officers who may well not be within the jurisdiction should be examined publicly.
Peter Gibson J said: ‘Where a company has come to a calamitous end and has been wound up by the court, the obvious intention of this section was that those responsible for the company’s state of affairs should be liable to be subjected to a process of investigation and that investigation should be in public. Parliament could not have intended that a person who had that responsibility could escape liability to investigation simply by not being within the jurisdiction. Indeed, if the section were to be construed as leaving out of its grasp anyone not within the jurisdiction, deliberate evasion by removing oneself out of the jurisdiction would suffice. That seems to me to be a wholly improbable intention to attribute to Parliament. Further, section 133 must be construed in the light of circumstances existing in the mid-1980s when the legislation was enacted. By use of the telephone, telex and fax machines English companies can be managed perfectly well by persons who need not set foot within the jurisdiction. There is no requirement that an officer of an English company must live in England, nor of course need an officer of an overseas company which may be wound up by the court. Such a company is very likely to have officers not within the jurisdiction.’

Judges:

Dillon LJ, Peter Gibson J

Citations:

Ind Summary 22-Feb-1993, [1993] Ch 345

Statutes:

Insolvency Act 1986 133

Jurisdiction:

England and Wales

Citing:

Appeal from – 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 . .

Cited by:

See Also – Re Seagull Manufacturing Co Ltd ChD 3-May-1993
A company director who was resident overseas may be subject to disqualification proceedings. . .
Cited – Masri v Consolidated Contractors International Co Sal and Others HL 30-Jul-2009
The claimant sought to enforce a judgment debt against a foreign resident company, and for this purpose to examine or have examined a director who lived abroad. The defendant said that the rules gave no such power and they did, the power was outside . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 09 April 2022; Ref: scu.85879

Razzaq v Pala: QBD 6 Jun 1997

The forfeiture of a bankrupt’s lease is not an exercise of a security disallowing landlord from proving in the bankruptcy. the right of physical re-entry is neither a ‘security’ nor a ‘remedy’ within the meaning of those provisions, nor does it constitute ‘other proceedings’ or the execution of ‘other legal process’. The present law is therefore anomalous.

Judges:

Lightman J

Citations:

Times 06-Jun-1997, Gazette 18-Jun-1997, [1997] 1 WLR 1336

Statutes:

Insolvency Act 1986 10 11(3) 130(4) 252(2) 285(3)

Insolvency, Landlord and Tenant

Updated: 09 April 2022; Ref: scu.85681

Regina v P: CACD 29 Mar 2000

A court could properly look at the degree of a bankrupt’s behaviour in gambling so as to materially either contribute to or materially increase the extent of his insolvency by gambling or reckless speculation, and if such behaviour was found the defendant could commit the offence. The word materially was intended to apply to either limb of the statutory offence.

Citations:

Times 29-Mar-2000

Statutes:

Insolvency Act 1986 362 (1)(a)

Insolvency

Updated: 09 April 2022; Ref: scu.85441

Morris v John Grose Group Limited: EAT 16 Sep 1998

Where an employee was dismissed by a receiver before the receiver entered into negotiations for the sale of a business, he was dismissed as part of a transfer. The word ‘transfer’ did not have to relate to a particular deal.

Citations:

Gazette 16-Sep-1998, (1998) IRLR 499

Statutes:

Transfer of Undertakings (Protection of Employment) Regulations 1981 (1981 No 1794)

Employment, Insolvency

Updated: 09 April 2022; Ref: scu.83855

Levett and Others v Barclays Bank Plc: QBD 27 Jan 1995

A contract was set aside where the plaintiff who had put up treasury stock as security, was not told of arrangements between the debtor and the bank whereby the security would be used to repay the loan. A creditor must reveal the disadvantageous nature of a loan to a proposed surety: ‘The creditor is under a duty to the surety to disclose to the surety contractual arrangements made between the principal debtor and the creditor which both, (a) make the terms of the principal contract something different from those which the surety might naturally expect and, (b) materially affect the degree of the surety’s responsibility.’

Judges:

Michael Burton QC

Citations:

Times 27-Jan-1995, [1995] 1 WLR 1260, [1995] 2 All ER 615

Cited by:

Helpful – Lloyds TSB Bank Plc v Shorney and Another CA 20-Jul-2001
The defendant had signed a guarantee and supporting charge to support her husband’s business debts. It has been expressly limited to andpound;150,000. Without prior notification, or seeking her consent, the bank extended the loan. When it later . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 09 April 2022; Ref: scu.83032

Kemble and Another v Kicks and Others; In Re the Trusts of the Scientific Investment Pension Plan: ChD 5 Mar 1998

Provision in pension scheme withdrawing benefits to bankrupt beneficiary defeated trustees claim only if determinable or defeasible interest.

Judges:

Rattee J

Citations:

Times 05-Mar-1998, [1998] PLR 141, [1999] Ch 53

Cited by:

Cited – Malcolm v Mackenzie, Allied Dunbar Plc CA 21-Dec-2004
The bankrupt complained that having been made bankrupt, his self-employed pension was subject to attachment by his trustee, but had he been a member of a company scheme the asset would not, and that this was discriminatory.
Held: 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.

Financial Services, Insolvency

Updated: 09 April 2022; Ref: scu.82722

Kempe and Another v Ambassador Insurance Company (In Liquidation) (Bermuda): PC 3 Jan 1997

A scheme of arrangement though approved by the court was not itself a court order and could not be extended by the court.

Citations:

Times 03-Jan-1997

Cited by:

See Also – Kempe Jr and others v Ambassador Insurance Company PC 19-Nov-1997
(Bermuda) . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Commonwealth

Updated: 09 April 2022; Ref: scu.82723

In Re Wilmott Trading Ltd: ChD 6 May 1999

The continued ownership of a waste disposal licence was not a bar to the completion of the liquidation of the company provided the liquidator could show ability to comply with the statutory requirements for the licence.

Citations:

Gazette 06-May-1999

Statutes:

Insolvency Act 1986 106(1) 201(2)

Jurisdiction:

England and Wales

Insolvency

Updated: 08 April 2022; Ref: scu.82295

In Re Wilmott Trading Ltd (No 2): ChD 17 Jun 1999

A waste management licence is not property. On the dissolution of a company, the licence simply ceased to exist. Nothing remained which was capable of vesting in the Crown in bona vacantia. Such a licence could not be managed or regulated properly by the Environmental Agency.

Citations:

Times 17-Jun-1999, Gazette 27-Jun-1999, Gazette 30-Jun-1999

Statutes:

Companies Act 1985 654

Jurisdiction:

England and Wales

Insolvency

Updated: 08 April 2022; Ref: scu.82296

In Re T and D Industries Plc and Another: ChD 23 Nov 1999

An administrator appointed under the Act was free to dispose of a company’s assets without first making an application to court for permission, and without first obtaining approval of his proposal from the creditors. The administrator’s role would require difficult and sometimes urgent decisions.

Judges:

Neuberger J

Citations:

Times 23-Nov-1999, Gazette 01-Dec-1999

Statutes:

Insolvency Act 1986 8(3)

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 08 April 2022; Ref: scu.82217

In Re Pantmaenog Timber Company Ltd: ChD 15 Dec 2000

The duties of the Official Receiver in company director disqualification proceedings were related to the gathering of information regarding the trading of a company. The powers given to the receiver did not include the power to commence proceedings, nor to seek out documents with the intention of defending an application for strike out of director disqualification proceedings. Orders made on an application for discovery of such documents were set aside.

Citations:

Gazette 15-Dec-2000, Times 23-Nov-2000

Jurisdiction:

England and Wales

Cited by:

Appeal from – In re Pantmaenog Timber Co Ltd CA 25-Jul-2001
The Official Receiver could not use the powers given to him for the purposes of his insolvency duties to require production of documents form solicitors and accountants, to satisfy duties placed on him by the Secretary of State for the purpose of . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 08 April 2022; Ref: scu.82109

In Re Paramount Airways Ltd (In Administration): ChD 14 Sep 1993

Administrators may adopt employment contracts without attracting personal liability.

Citations:

Times 14-Sep-1993

Statutes:

Insolvency Act 1986 19-5

Jurisdiction:

England and Wales

Citing:

See Also – Re Paramount Airways Ltd (In Administration) CA 8-Apr-1992
It was said that there had been a transction at an undervalue within section 238. It was given effect by a transfer to a bank in Jersey, from which recovery was no sought. The bank claimed that the section did not have extra-territorial effect.
Lists of cited by and citing cases may be incomplete.

Insolvency, Employment

Updated: 08 April 2022; Ref: scu.82111

In Re Port (A Bankrupt) (No 516 of 1987) Port v Auger: ChD 16 Dec 1993

‘Ordinary application’ in Insolvency Rules not a pleading to be struck out. Court may strike out ‘ordinary application’ only if no basis at all for claim.

Citations:

Times 16-Dec-1993, Ind Summary 27-Dec-1993

Statutes:

Rules of the Supreme Court Order 18 rule 19

Jurisdiction:

England and Wales

Litigation Practice, Insolvency

Updated: 08 April 2022; Ref: scu.82125

In Re Powershore (Trading) Ltd; In Re Homepower Stores Ltd: ChD 19 May 1997

The Court has no authority to make an order to control how any future liquidator of a company should distribute the assets on insolvency. It is wrong to seek to fetter his acts and discretions in this way.

Citations:

Times 19-May-1997

Statutes:

Insolvency Act 1986 18(3), 14(3)

Jurisdiction:

England and Wales

Insolvency

Updated: 08 April 2022; Ref: scu.82126

In Re Powerstore (Trading) Ltd; In Re Homepower Stores Ltd: ChD 18 Jun 1997

A court has no jurisdiction to make an order which seeks to bind future decisions of future liquidator in favour of group of creditors.

Judges:

Mr Justice Lightman

Citations:

Gazette 18-Jun-1997, [1997] 1 WLR 1280

Statutes:

Insolvency Act 1986 18(3) 14(3)

Jurisdiction:

England and Wales

Cited by:

Cited – In re Luna Metal Products Ltd (in Administration) CA 14-Dec-2006
The administrators held cash. They proposed a distribution giving creditors who would on a winding up be preferential, full preference. They appealed refusal by the court to sanction the proposal.
Held: The court had no power to make such an . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 08 April 2022; Ref: scu.82127

In Re Palmer, Deceased (A Debtor): ChD 25 Mar 1994

The court considered the effect of the doctrine of relation back on a property of which the bankrupt was formerly a joint tenant where the bankrupt had died after the act of bankruptcy but before adjudication.
Held: A deceased’s share in property held under a joint tenancy was not caught by an insolvency after the death.

Judges:

Vinelott J

Citations:

Times 30-Mar-1994, [1994] Ch 316, [1993] 3 WLR 877

Statutes:

Insolvency Act 1986 283

Jurisdiction:

England and Wales

Citing:

Not followed – Re Dennis ChD 15-Jul-1992
Property was held in joint names. The husband failed to comply with a statutory demand, and so committed an act of bankruptcy. The wife later died, and the husband was then made bankrupt a month later.
Held: An act of bankruptcy did not . .

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; . .
Appeal from – Re Palmer (A Deceased Debtor), Palmer v Palmer CA 6-Apr-1994
Property had been conveyed to the deceased and the appellant, his widow, to be held as joint tenants. The deceased dies whilst under investigation for defalcations as a solicitor, and an insolvency administration order was obtained in the estate. . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 08 April 2022; Ref: scu.82107

In Re Melinek (A Bankrupt); Bristol & West Building Society v Alexander (The Trustee Of The Property of Back) (A Bankrupt); Melinek (A Bankrupt): ChD 10 Apr 1997

The applicants sought leave to proceed in actions against the defendants against whom bankruptcy proceedings were pending. Consent should have been obtained before proceedings were issued, but application was now made nunc pro tunc.
Held: The court has a free hand in these situations to do what was right and fair. Leave was granted.

Judges:

David Young QC

Citations:

Times 10-Apr-1997, (1998) 1 BCLC 485

Statutes:

Insolvency Act 1986 285(3)

Jurisdiction:

England and Wales

Citing:

See also – Scotlife Home Loans (No 2) Limited v Melinek and Melinek CA 9-Sep-1997
The second defendant sought leave to appeal against a possession order obtained by the claimant. The loan obtained had been misapplied by the first defendant, her husband. She had been advised in the transaction by his partner in their solicitors’ . .

Cited by:

See also – Scotlife Home Loans (No 2) Limited v Melinek and Melinek CA 9-Sep-1997
The second defendant sought leave to appeal against a possession order obtained by the claimant. The loan obtained had been misapplied by the first defendant, her husband. She had been advised in the transaction by his partner in their solicitors’ . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 08 April 2022; Ref: scu.82057

In Re Landau (A Bankrupt): ChD 1 Dec 1996

At the date of the bankruptcy the bankrupt was entitled to a pension, payable in the future on his attaining the age of 65 years. He was aged 61 when the bankruptcy order was made, and 64 when it was discharged. The trustee claimed to be entitled to elect under the policy to commute part of the annuity for a tax free lump sum; and to take that lump sum and the reduced annuity as part of the bankrupt’s estate.
Held: Pension benefits payable after a bankrupt’s discharge were not ‘after acquired’. Both the cash lump sum and the continuing annuity payable under a retirement annuity contract were property of the bankrupt which vested automatically in the trustee in bankruptcy under the Insolvency Act 1986. he `bundle of contractual rights’ under the pension policy to which the bankrupt had been entitled at the commencement of the bankruptcy fell within the description `things in action . . whether present or future or vested or contingent’; and so had to be regarded as within the definition of `property’ in section 436 IA 1986. It was immaterial that the policy was not in payment at the commencement of the bankruptcy. At the commencement of the bankruptcy the bankrupt had a present right to require the pension provider to make payments under the policy in the future. It was that right – and the associated rights to elect when payments should commence – which formed part of the bankrupt’s estate.

Judges:

Ferris J

Citations:

Times 01-Jan-1997, Gazette 29-Jan-1997, [1998] Ch 223

Statutes:

Insolvency Act 1986 306

Jurisdiction:

England and Wales

Cited by:

Cited – National Grid Co Plc v Mayes and Others; International Power Plc (Formerly National Power Plc) v Healy and Others HL 7-Jun-2001
The release by the trustees of a sum due to the pension scheme from the employers, did not make funds payable to the employer, so as to trigger the clause within the scheme trust deed which would restrain such a payment. Where an actuarial surplus . .
Cited – Malcolm v Mackenzie, Allied Dunbar Plc CA 21-Dec-2004
The bankrupt complained that having been made bankrupt, his self-employed pension was subject to attachment by his trustee, but had he been a member of a company scheme the asset would not, and that this was discriminatory.
Held: The . .
Cited – Horton v Henry CA 7-Oct-2016
No obligation on bankrupt to draw on pension fund
The trustee in bankruptcy appealed against a decision dismissing his application for an income payments order pursuant to section 310 of the 1986 Act in respect of income which might become payable to the respondent from his personal pension . .
Approved – Dennison v Krasner, Lesser, Lawrence CA 6-Apr-2000
A retirement annuity or personal pension was part of a bankrupt’s estate before the recent Act, and vested immediately in the trustee on the bankruptcy. As such there was no need to make application to the court under s310 for an income payment . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 08 April 2022; Ref: scu.81997

In Re A Debtor (No 510 of 1997): ChD 18 Jun 1998

The normal rule that costs are to follow payment of the debt after the issue of an insolvency petition was exceptionally displaced when mistakes in the petition meant that the defendant had had to incur unnecessary costs.

Citations:

Times 18-Jun-1998

Statutes:

Insolvency Rules 1986 (1986 No 1925) 6.8

Jurisdiction:

England and Wales

Insolvency

Updated: 08 April 2022; Ref: scu.81664

Griffiths and Another v Yorkshire Bank Plc and Others: ChD 7 Oct 1994

The court considered the application of a company’s assets as between debenture holders and other chargees upon the insolvency of the company. It was the essence of a floating charge that the company could create a prior fixed charge over the asset. Where a second floating charge had been created and was crystallised, becoming a fixed charge, that fixed charge then took priority over the floating charge retained by the first debenture, and that priority was not lost if the first charge was itself subsequently crystallised. Commenting on Portbase: ‘Chadwick J. envisaged two possibilities. One is a restriction in the floating charge of which the holder of the fixed charge had notice, i.e. the 1977 debenture. In none of the cases to which he had earlier referred was this possibility considered or in issue. In my judgment it is not the law that such a restriction affects priorities as a matter of property law whatever may be the contractual result. It is of the essence of a floating charge that proprietary interests having priority over any interest of the holder of the floating charge may be created.’

Judges:

Morritt J

Citations:

Gazette 07-Oct-1994, [1994] 1 WLR 1427

Jurisdiction:

England and Wales

Citing:

Distinguished – In Re Portbase Clothing Ltd; Mould v Taylor 1993
The company had given two debentures, one fixed and one floating. Their priority was fixed by a deed of priority. On insolvency the liquidator sought direction as to the application of the assets.
Held: The deed made the bank’s floating charge . .

Cited by:

Cited – National Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 08 April 2022; Ref: scu.81043

Re B Johnson and Co (Builders) Ltd: CA 1953

A receiver of property is not managing the mortgagor’s property for the benefit of the mortgagor, but the security, the property of the mortgagee, for the benefit of the mortgagee. Section 333 was a procedural section which created no new cause of action. A case of common law negligence was not within the section.

Judges:

Jenkins LJ

Citations:

[1953] Ch 634

Statutes:

Companies Act 1948 333

Jurisdiction:

England and Wales

Cited by:

Cited – Downsview Nominees Ltd and Another v First City Corporation Ltd and Another PC 19-Nov-1992
(New Zealand) The holder of a second debenture appointed receivers to the assets. The first debenture holder then also appointed receivers not to obtain repayment of its debt, but to disrupt the work of the first appointed receivers and in order to . .
Cited – Oldham and others v Georgina Kyrris and Another CA 4-Nov-2003
The claimant sought to bring a claim against the administrators of a partnership alleging a duty of care to creditors.
Held: Such an administrator owed no greater duty to creditors than would a director. That duty was no different whether the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 08 April 2022; Ref: scu.187042

Re Pollitt: CA 1893

The debtor had put his solicitor in funds to meet future costs. The solicitor then prepared a deed of assignment for the benefit of the creditors which the debtor executed. The debtor was afterwards adjudicated bankrupt, the act of bankruptcy being the execution of the deed. The solicitor claimed to retain part of the money in his hands as payment for services rendered by him to the debtor after the execution of the deed but before the adjudication.
Held: He was not entitled to the funds. As soon as the deed was executed title passed to the trustee: ‘Then the deed of assignment which had been prepared by the solicitor was executed by the debtor; its execution was an act of bankruptcy, and the solicitor knew that it was. The title of the trustee in the subsequent bankruptcy related back to that act of bankruptcy. What does that mean? The result of the relation back is, that all subsequent dealings with the debtor’s property must be treated as if the bankruptcy had taken place at the moment when the act of bankruptcy was committed. The debtor must be treated as if the bankruptcy had taken place the moment the deed was executed. Then, he being a bankrupt, all the money which he then had, and all the money which was owing to him, passed to the trustee in the bankruptcy for the purpose of being distributed by him amongst the bankrupt’s creditors’ A contrary decision would have the effect of preferring the solicitor to the other creditors.

Judges:

Lord Esher MR, Lindley LJ

Citations:

[1893] 1 QB 455

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; . .
Applied – Re Gunsbourg CA 1920
The debtor transferred his assets to a company formed by him. He later committed an act of bankruptcy on which he was adjudicated bankrupt. The company had sold some of the assets to a bona fide purchaser without notice of the act of bankruptcy. The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 08 April 2022; Ref: scu.186755

Aviabaltika v BAB Ukio bankas: ECJ 12 Apr 2018

Opinion – Reference for a preliminary ruling – Economic and monetary policy – Free movement of capital – Implementation of financial guarantee contracts – Commencement of winding-up proceedings with regard to the financial collateral taker – Occurrence of the fact entailing the execution of the guarantee – Included of the financial guarantee in the insolvency estate – Obligation to satisfy the claims, in the first place, of the financial guarantee

Citations:

ECLI:EU:C:2018:239, [2018] EUECJ C-107/17 – O

Links:

Bailii

Jurisdiction:

European

Insolvency

Updated: 07 April 2022; Ref: scu.608628

In Re a Debtor No 32 of 1991 (No 2): ChD 1994

It was an abuse of process for a firm of accountants to serve a statutory demand for the amount of their bill. Vinelott J said of the situation where a demand is made for payment of reasonable remuneration for services rendered: ‘I do not say that a statutory demand can never properly be presented in such a case – that the creditor must always quantify his claim by obtaining a judgment before serving a statutory demand. There may be cases where the minimum sum due can be ascertained by reference to some objective standard. There may be cases where the rate of charging is agreed and the minimum time that had to be spent on the task for which remuneration is sought can be similarly established; or advance or periodic payments may have been agreed. But these cases must be regarded as exceptional.’

Judges:

Vinelott J

Citations:

[1994] BCC 524

Jurisdiction:

England and Wales

Cited by:

Cited – Truex v Toll ChD 6-Mar-2009
The bankrupt appealed against an order in bankruptcy made against her on application by her former solicitors in respect of their unpaid costs. The bankrupt said that since the bill was yet untaxed, it might be altered and could not base a statutory . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 07 April 2022; Ref: scu.317857

MK Airlines Ltd v Katz and Another (Acting As Joint Liquidator of MK Airlines): ChD 16 Mar 2018

Appeal against orders made following successful misfeasance claims brought by the joint liquidators of an insolvent company against one of its former administrators.

Judges:

Sarah Worthington QC DHCJ

Citations:

[2018] EWHC 540 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Torts – Other

Updated: 06 April 2022; Ref: scu.606431

Citibank Na, London Branch v Oceanwood Opportunities Master Fund and Others: ChD 19 Feb 2018

Application by the claimant, Citibank, for directions as to whether it should, as security trustee and security agent under complex loan arrangements, seek and/or act in accordance with the directions of a body of creditors of which the first defendant, Oceanwood was a majority holder of debt, and whose wishes or vote would therefore govern; or whether provisions of the documentation which exclude from voting those who ‘control’ the debtor mean that Oceanwood’s voice cannot be heard. The matter with which this judgment deals is one of jurisdiction – whether this court or the courts of New York, should be dealing with this matter in the light of the jurisdictional clauses contained in the loan documentation.

Judges:

Mann J

Citations:

[2018] EWHC 305 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Jurisdiction, Insolvency

Updated: 05 April 2022; Ref: scu.605341

The Secretary of State for Business, Energy and Industrial Strategy v Rigil Kent Acquisitions Ltd and Others: ChD 19 Dec 2017

Applications for the appointment of a provisional liquidator pending the hearing of various petitions for the winding up of a group of companies, on the public interest ground

Judges:

Marcus Smith J

Citations:

[2017] EWHC 3636 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986 135

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 05 April 2022; Ref: scu.605339

JSC Mezhdunarodniy Promyshlenniy Bank and Another v Pugachev and Others (No 4): ChD 13 Jul 2017

The claimant bank alleged and had judgment in Russia against the defendants and sought to enforce that judgment. The bank now challenged trusts established to protect assets.

Judges:

Birss J

Citations:

[2017] EWHC 1847 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Litigation Practice

Updated: 05 April 2022; Ref: scu.591429

Menzies v -: SCS 1 Dec 1589

The execution must specify the Names and Designations of the Parties, Dwelling-houses, and co – An execution of horning was reduced, because it mentioned not the six knocks.

Citations:

[1589] Mor 3773

Links:

Bailii

Jurisdiction:

Scotland

Insolvency

Updated: 05 April 2022; Ref: scu.563172

Mistral Asset Finance Ltd v Registrar of Companies and Another: ChD 12 Nov 2020

The Claimant sought a declaration that it remains entitled to a legal mortgage of leasehold property following the dissolution of the mortgagor, Buzzlines Coaches Limited.

Judges:

His Honour Judge Halliwell sitting as a Judge of the High Court

Citations:

[2020] EWHC 3027 (Ch)

Links:

Bailii

Statutes:

Companies Act 2006 1017

Jurisdiction:

England and Wales

Company, Land, Insolvency

Updated: 03 April 2022; Ref: scu.655674

In re Cromptons Leisure Machines Ltd: ChD 13 Dec 2006

The section gave the court a jurisdiction to authorise payments to people would be preferred creditors in a winding up.

Judges:

Lewison J

Citations:

Times 27-Dec-2006

Statutes:

Insolvency Act 1986 18(3)

Jurisdiction:

England and Wales

Citing:

Cited – Colchester Estates (Cardiff) v Carlton Industries plc ChD 30-Mar-1984
If a decision of a court has been reached after full consideration of an earlier decision which went the other way, it should not be open to review on a third occasion when the same point arose for decision.
Nourse J said: ‘There must come a . .
Cited – In re Spiralglobe Ltd 2006
. .
Cited – In re Bovell Group 2006
. .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 03 April 2022; Ref: scu.247761

Valach and Others v Waldviertler Sparkasse Bank AG and Others: ECJ 20 Dec 2017

ECJ (area of freedom, security and justice – Judicial cooperation in civil matters area of freedom, security and justice – Judicial cooperation in civil matters) Reference for a preliminary ruling – Judicial cooperation in civil matters – Regulation (EU) No 1215/2012 – Scope – Action for liability in tort against the members of a committee of creditors which rejected a restructuring plan in insolvency proceedings

Citations:

ECLI:EU:C:2017:986, [2017] EUECJ C-649/16

Links:

Bailii

Jurisdiction:

European

Insolvency

Updated: 02 April 2022; Ref: scu.602119

Graysons Restaurants Ltd v Jones and Others: EAT 7 Nov 2017

EAT TRANSFER OF UNDERTAKINGS – Insolvency
RIGHTS ON INSOLVENCY
Two short questions of construction arise in an employer insolvency context concerning rights of employees to arrears of pay under Part XII ERA 1996. The first is whether a claim for equal pay arrears is a claim for ‘arrears of pay’, and in circumstances where the claim has not yet been determined, whether it gives rise to a debt to which the employee is entitled on the ‘appropriate date’. The second is whether liability for only that debt does not transfer from the insolvent employer (or transferor) to the transferee under Regulation 8 TUPE Regulations 2006, or whether the whole liability for past equal pay arrears is extinguished so far as the transferee is concerned.
The Employment Judge concluded that:
(i) equal pay arrears are not a debt payable at the time of transfer (or on the appropriate date) where the equal pay claims have not been determined and quantified. The debt will only be due if the equal pay claims succeed and not before.
(ii) If wrong about that, any liability in excess of the eight week sum guaranteed by the statutory scheme in Part XII, transfers to the transferee and is not extinguished.
The appeal succeeded in part:
(i) equal pay arrears can be ‘arrears of pay’ within s.184(1) ERA, and therefore a debt within s.182 ERA.
(ii) The Employment Judge was in error in concluding that arrears of pay arising from an equal pay claim that is as yet undetermined cannot be a claim for ‘arrears of pay’ within s.184(1) ERA.
(iii) There is a presumption that equality clauses operated in the Claimants’ contracts since their work has been rated as equivalent to their comparators. If that presumption is not rebutted by genuine material factor defences the Claimants had a legal entitlement to be paid in accordance with the equality clauses for work they performed before the appropriate date. To the extent that they were not so paid, they were entitled to arrears of pay on the appropriate date. They are in no different position to suppliers of goods who were unpaid on the appropriate date, or employees who did not receive pay due under implied or disputed oral agreements for work done before the appropriate date.
(iv) The wider point relied on by the Respondent failed. Only liabilities for up to eight weeks of arrears of equal pay do not transfer to the transferee if they constitute sums payable under Part XII ERA by the Secretary of State because the necessary conditions in ss.182 and 184 ERA are established. To the extent that the liabilities exceed the statutory limits in Part XII ERA, liability transfers to the transferee.

Citations:

[2017] UKEAT 0277 – 16 – 2811

Links:

Bailii

Jurisdiction:

England and Wales

Employment, Insolvency

Updated: 02 April 2022; Ref: scu.601917

Deutsche Bank Ag v Sebastian Holdings Inc: ComC 13 Dec 2017

Judges:

Andrew Baker J

Citations:

[2017] EWHC 3265 (Comm)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Deutsche Bank Ag v Sebastian Holdings Inc ComC 14-Aug-2009
. .
See Also – Deutsche Bank Ag v Sebastian Holdings Inc ComC 1-Dec-2009
. .
See Also – Deutsche Bank Ag v Sebastian Holdings Inc ComC 28-Apr-2016
. .
Cited – Deutsche Bank Ag v Sebastian Holdings Inc ComC 16-Dec-2016
. .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 02 April 2022; Ref: scu.601473

Simmonds v Pearce: QBD 1 Dec 2017

Application to commit the Respondent to prison for breaches of various provisions of the Insolvency Act which are said to constitute deliberate, repeated, and serious contempt of court.

Judges:

Gloster LJ, Andrews J

Citations:

[2017] EWHC 35 (QB), [2017] WLR(D) 803

Links:

Bailii, WLRD

Jurisdiction:

England and Wales

Contempt of Court, Insolvency

Updated: 02 April 2022; Ref: scu.601122

Premier Motorauctions Ltd and Another v Pricewaterhousecoopers Llp and Another: CA 23 Nov 2017

Extent to which the existence of After-the-Event (‘ATE’) insurance is relevant when the court is considering an application for security for costs sought by the defendants in a claim brought by an insolvent company in liquidation.

Citations:

[2017] EWCA Civ 1872

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Costs

Updated: 01 April 2022; Ref: scu.599609

Ingram (Liquidator of MSD Cash and Carry Plc) v Singh and Others: ChD 16 Jul 2018

Extemporary judgment on the issues of interest, costs and consequential matters following the trial of the applicant liquidator’s application for various heads of relief in the course of the insolvent liquidation of MSD Cash and Carry plc.

Citations:

[2018] EWHC 4033 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency

Updated: 01 April 2022; Ref: scu.655446