Category: Insolvency

The Attorney General of Quebec and The Royal Bank of Canada v Larue and Others: PC 19 Jan 1928

(Canada) The non-bankrupt spouse is a stranger to the realisation of the bankrupt’s property for the benefit of creditors to which laws as to bankruptcy are directed.
Any system of bankruptcy law ‘may frequently require various ancillary provisions for the purpose of preventing the scheme of the Act from being defeated’
[1928] UKPC 1, [1928] AC 187
Bailii
Canada

Updated: 20 October 2021; Ref: scu.469664

Case LX, 12 Jac 1 Keb 796, 880, 891, 928 Hob 196, Blunt’s Case: 1220

The Earl of Devon left his estate to his son, the Earl of Devonport, being 18 years of age. Among the possessions of the said Earl of Devon, he had the manor of Wansted, which he left to the said son in tail, with diverse remainders over; the Earl of Devon was greatly in debt; and had appointed certain honourable persons to be tutors and guardians to his said son ; they found it necessary to sell the said manor of Wansted for payment of the earl’s debts ; and they petitioned the King that he would vouchsafe to write to the judges of the Common Pleas, that a common recovery should be suffered of this manor; which the King did : upon examination of the infant and of his tutors in court, and of the circumstances of the case, a common recovery, was suffered of this manor to the use of the Duke of Buckingham in fee. Affirmed in error.
[1220] EngR 108, (1220-1623) Jenk 299, (1220) 145 ER 218 (C)
Commonlii
England and Wales

Updated: 20 October 2021; Ref: scu.461020

Re Virgin Atlantic Airways Ltd: ChD 4 Aug 2020

Application by Virgin Atlantic Airways Limited under s.901C(1) of the Companies Act 2006, for an order summoning meetings of certain of its creditors for the purpose of considering and, if thought fit, approving a compromise or arrangement within s.901A of the Act.
[2020] EWHC 2191 (Ch)
Bailii
Companies Act 2006 901C(1)
England and Wales

Updated: 17 October 2021; Ref: scu.653111

Devaynes v Noble; Baring v Noble, Clayton’s Case: CA 1816

A partner in a banking firm died. The surviving partners continued to trade without making any changes. They later fell into bankruptcy. Creditors of the bank at the date of the death still traded with the bank with varying changes in their banking accounts.
Held: The fact that they continued to trade with the continuing partners did not discharge the estate of the deceased partner. Grant MR said: ‘I apprehend by the general mercantile law, a partnership contract is several as well as joint. That may probably be the reason why courts of equity have considered joint contracts of this sort, that is joint in form, as standing on a different footing from others.’
Grant MR
[1816] 1 Mer 572, [1814-23] All ER Rep 1, [1816] 35 ER 781
Worldlii
England and Wales
Cited by:
Cited – City Discount v McLean CCP 16-Jun-1874
The plaintiffs, a discount company, were in the habit of discounting bills for S. In consideration that the plaintiffs would advance money to a certain amount to S on the deposit of a lease of S’s premises, the defendant guaranteed any part of the . .
See Also – Baring v Noble 9-Mar-1831
The creditor of a partnership, in which one of the partners dies, and the surviving partners afterwards become bankrupt, has a right to resort to the assets of the deceased partner for payment, without regard to the state of the account as between . .

Lists of cited by and citing cases may be incomplete.
Updated: 16 October 2021; Ref: scu.229249

In re Home and Colonial Insurance Co Ltd: 1930

[1930] 1 Ch. 102
Cited by:
Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .

Lists of cited by and citing cases may be incomplete.
Updated: 16 October 2021; Ref: scu.252500

In re Windsor Steam Coal Co. (1901) Ltd: 1929

The courts look more favourably on applications by gratuitous trustees than on those by paid trustees. In a company winding up the liquidator may be liable to the company for negligence on his part in making a compromise.
[1929] 1 Ch 151
Cited by:
Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .

Lists of cited by and citing cases may be incomplete.
Updated: 16 October 2021; Ref: scu.252499

Telnic Ltd v Knipp Medien Und Kommunikation Gmbh: ChD 29 Jul 2020

Appeal from an order restraining the Petitioner from proceeding with its winding-up petition against Telnic and stayed the petition on the basis that the debt was not admitted and subject to an arbitration clause, and ordered Knipp to pay Telnic’s costs assessed at pounds 25,000 into an escrow account held by the solicitors.
Sir Geoffrey Vos, Chancellor of the High Court
[2020] EWHC 2075 (Ch)
Bailii
England and Wales

Updated: 14 October 2021; Ref: scu.653021

In re Paget: CA 1927

The purpose of the public examination of a debtor is not merely to obtain a full and complete disclosure of his assets and the facts relating to the bankruptcy in the interests of the creditors, but also to protect the public: ‘To concentrate attention upon the mere debt collecting and distribution of assets is to fail to appreciate one very important side of bankruptcy proceedings and law.’ The judge had disallowed a question on the ground that the answers would not assist in the collection of the debtor’s assets. The court rejected this as a sufficient ground for disallowing the question on the ground that it would exclude: ‘a side of the bankruptcy law which we are constantly affirming in this court, where it has been necessary over and over again to point out that in matters of bankruptcy it is not merely the creditors who have their rights, but it is also the public themselves whose interests have to be safeguarded.’
Lord Hanworth MR
[1927] 2 Ch 85
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.
Updated: 14 October 2021; Ref: scu.186356

Bestrustees Plc v Kaupthing Singer and Friedlander Ltd: ChD 31 Jul 2013

Challenge to administrators’ decision to reduce by pounds 2 million the Trustee’s proof of debt in the administration of KSF of pounds 74,652,000 on the ground that the same amount had been paid to the scheme by KSF out of a trust account in which the scheme had a beneficial interest.
[2013] EWHC 2407 (Ch)
Bailii
England and Wales

Updated: 12 October 2021; Ref: scu.514962

Christopher Moran Holdings Limited v Bairstow and Ruddock: ChD 1996

(Orse: Park Air Services) The tenant company went into a members’ solvent liquidation, and disclaimed the lease. At the time, the rental value had fallen very much below the contractual rent. The landlord sought to prove the balance of the rent with no allowance for being accelerated. The liquidator said the claim should be discounted for having been accelerated.
Held: The claim was correct as submitted.
Ferris J
[1996] 1 WLR 649
Insolvency Act 1986 178(2)
England and Wales
Cited by:
Appeal from – Park Air Services Plc; Christopher Moran Holdings Limited v Bairstow and Ruddock CA 1-May-1997
If a lease is determined or treated as determined in a winding up or in a bankruptcy, the landlord is entitled to prove in principle for all the rent and other payments which he would have been entitled to recover from the tenant for the residue of . .

Lists of cited by and citing cases may be incomplete.
Updated: 10 October 2021; Ref: scu.197012

Buvelot v Mills: QBD 10 Nov 1865

A deed of composition under section 192 of the Bankruptcy Act, 1861, between the debtor of the first part, and the several persons whose names and seals were thereunto subscribed and set, being creditors of the debtor, and all other persons being creditors of the debtor, of the other part, after reciting that the debtor was indebted to the parties of the second part, contained a covenant by the debtor with the said persons of the second part, that he would pay ‘ unto the said persons respectively the several sums of money placed opposite to the respective names of the said persons in the third column of the schedule to the deed, being the amount of the composition agreed upon, by two instalments on certain days,’ and it was declared that until the debtor should make default the parties of the same part should not bring any action in respect of their several debts specified in the several columns of the schedule.
Held: that the covenant as to payment and the covenant not to sue must override the generality of the earlier part of the deed, and were confined to the persons and their debts specified in the schedule; and therefore that the deed did not afford an equitable defence to an action by a creditor not named in the schedule.
[1865] EngR 722, (1865) 6 B and S 986, (1865) 122 ER 1457
Commonlii, Commonlii
England and Wales

Updated: 08 October 2021; Ref: scu.281634

Ex parte Llynvi Coal and Iron Co; In re Hide: 1871

The trustee in bankruptcy disclaimed an agreement for a lease under Section 23. The landlord claimed to prove as creditor under the section.
Held: Where one party has repudiated a contract and the other party has accepted that repudiation as terminating the contract and he then exercises his secondary right to claim damages ‘Surely he is to prove for the damage which could be recovered for the breach of the contract.’ ‘I am satisfied that the injury referred to in the sub-section means the legal wrong that is done him. He is deprived of a certain contract, under which he was to recover a certain sum of money, and he is to prove against the estate for that which he would have had a right to recover or to sue for if he had not been deprived of that right by the bankruptcy.’ and ‘A landlord who has made a contract for andpound;500 a year, to be paid to him for the use of the land, is entitled to claim andpound;500 a year, minus what he can get for the land from another tenant.’
Mellish LJ said: ‘It is quite plain that the object of these sections is that the bankrupt should be absolutely relieved from any liability under any contract he has ever entered into. And the bankrupt being so relieved, it is plainly also the intention of the Legislature that the person deprived of the right of action against the bankrupt, and of the benefit of the contract which he made with the bankrupt, should be turned into a creditor in respect of what the Act describes the injury he has received. That, I think, must mean in respect of what he would have been entitled to recover against the bankrupt if the bankrupt had remained solvent. It would be contrary to every principle that in assessing the damages which could have been recovered against the bankrupt if he had not been made bankrupt, and for which proof is made, you are to take into consideration the fact of the bankrupt being insolvent, so that the amount of the proof is to depend upon the extent of his insolvency.’ and ‘In estimating the amount of damages, you are to take into consideration that the landlord regains possession of the property, and if he can get as much rent for the property afterwards as before, then the damages would be nil:if he gets less, it will be the difference.’
Sir G Mellish LJ, James LJ
(1871) LR 7 Ch App 28, [1871] UKLawRpCh 133
Commonlii
Bankruptcy Act 1869 23
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 . .
Cited – Park Air Services Plc; Christopher Moran Holdings Limited v Bairstow and Ruddock CA 1-May-1997
If a lease is determined or treated as determined in a winding up or in a bankruptcy, the landlord is entitled to prove in principle for all the rent and other payments which he would have been entitled to recover from the tenant for the residue of . .
Cited – 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.
Updated: 08 October 2021; Ref: scu.197009

Park Air Services Plc; Christopher Moran Holdings Limited v Bairstow and Ruddock: CA 1 May 1997

If a lease is determined or treated as determined in a winding up or in a bankruptcy, the landlord is entitled to prove in principle for all the rent and other payments which he would have been entitled to recover from the tenant for the residue of the term, had the lease not been determined.
Lord Justice Nourse Lord Justice Potter And Lord Justice Mummery
[1997] EWCA Civ 1590
Insolvency Act 1986
England and Wales
Citing:
Appeal from – Christopher Moran Holdings Limited v Bairstow and Ruddock ChD 1996
(Orse: Park Air Services) The tenant company went into a members’ solvent liquidation, and disclaimed the lease. At the time, the rental value had fallen very much below the contractual rent. The landlord sought to prove the balance of the rent with . .
Cited – In re New Oriental Bank Corporation (No.2) 1895
Where a tenancy continues after the insolvency of the tenant, the landlord is entitled (i) to prove for all the arrears of rent; (ii) to enter a claim for all future rent; and (iii) as rent accrues due, to submit proofs in the liquidation from time . .
Cited – Re A E Realisations Ltd 1988
Vinelott J said: ‘decisions on the Act of 1883 and on the Act of 1914 are . . of direct authority on the construction’ of the equivalent provisions for disclaimer by the liquidators of companies. . .
Cited – Hindcastle Ltd v Barbara Attenborough Associates Ltd and Others HL 22-Feb-1996
The guarantor of an original tenant under the lease remains liable after the disclaimer the lease on insolvency. The disclaimer operates to determine the lease altogether with the result that the landlord’s reversion is accelerated. ‘In order to . .
Cited – In re London and Colonial Co.; Horsey’s claim 1868
. .
Cited – Gooch v London Banking Association ChD 1886
On the application of a landlord, the court had jurisdiction to restrain the liquidators of a solvent company in voluntary liquidation from distributing assets of the company amongst its shareholders, without setting aside sufficient assets to . .
Cited – Re Panther Lead Company 1896
There was no surrender of a lease to the landlord and the tenant’s liquidator did not have the power to disclaim the lease. In the voluntary winding up of an insolvent company the landlord sought to prove for the liabilities of the company under the . .
Cited – Ex parte Llynvi Coal and Iron Co; In re Hide 1871
The trustee in bankruptcy disclaimed an agreement for a lease under Section 23. The landlord claimed to prove as creditor under the section.
Held: Where one party has repudiated a contract and the other party has accepted that repudiation as . .

Cited by:
Appeal from – 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.
Updated: 08 October 2021; Ref: scu.141986

Sowman v David Samuel Trust: ChD 1978

When considering a mortgage created by a corporate debtor, the rights under the debenture are not the property of the mortgagor but that of the mortgagee. It was a case where a company which had created the debenture equivalent to the mortgage had gone into liquidation: ‘Winding up deprives the receiver, under such a debenture as that now in suit, of power to bind the company personally by acting as its agent. It does not in the least affect his powers to hold and dispose of the company’s property comprised in the debenture, including his power to use the company’s name for that purpose, for such powers are given by the disposition of the company’s property which it made (in equity) by the debenture itself. That disposition is binding on the company and those claiming through it, as well in liquidation as before liquidation, except of course where the debenture is vulnerable under [various sections of the Companies Act] or is otherwise invalidated by some provision more applicable to the winding up.
. . The view of the authorities which I have just stated is also fatal, I think, to Mr Monckton’s alternative submission that the sale by the receiver is a disposition of the company’s property avoided by section 227 of the Companies Act 1948 . . In truth, the rights and powers given by the debenture are themselves property, but not property of the company, and if they are not extinguished by the fact of winding up, their enforcement or exercise is not within the scope of section 227 at all.’
Goulding J
Sowman v David Samuel Trust [[1978] 1 WLR 22
Companies Act 1948 227
England and Wales
Cited by:
Cited – Calvert v Clydesdale Bank Plc and Others CA 27-Jun-2012
The widow and personal representative of the chargor challenged the enforcement proceedings taken by the bank under a guarantee. The chargor had begun to suffer Alzheimers disease. She now sought leave toappeal saying that to enforce the guarantee, . .

Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.471195

Re Mineral Resources Limited; Environment Agency v Stout (Chd; Apr 1998): ChD 24 Jun 1998

A waste management licence was property, but public policy required that such licences should not be disclaimable by liquidators. There is a need to preserve responsibilities of those taking such licences.
Gazette 24-Jun-1998
Environmental Protection Act 1990, Insolvency Act 1986 178
England and Wales

Updated: 01 October 2021; Ref: scu.85837

Re: New Bullas Trading Ltd: ChD 5 Apr 1993

A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge.
Knox J
Ind Summary 05-Apr-1993, [1993] BCC 251
Insolvency Act 1986 40
England and Wales
Citing:
Appealed to – In Re New Bullas Trading Ltd CA 12-Jan-1994
A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be . .
Applied – In re Brightlife Ltd ChD 1987
Parties contractual freedom to be respected
A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not . .

Cited by:
Appeal from – In Re New Bullas Trading Ltd CA 12-Jan-1994
A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be . .
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.
Updated: 01 October 2021; Ref: scu.85909

Re Farmizer (Products) Ltd: ChD 19 Jun 1995

The limitation period for an action for wrongful trading under insolvency legislation is six years. Where the statute relied upon enables the court to give relief in monetary or non-monetary form the court should look to see what is actually claimed
Ind Summary 19-Jun-1995, [1997] 1 BCLC 589
Insolvency Act 1986 214, Limitation Act 1980 9(1)
England and Wales
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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.85776

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 operate as an involuntary act to sever the joint tenancy and the bankrupt inherited the jointly held property. On his bankruptcy the entire property was then vested in the trustee and was available to the creditors. ‘the effect of section 38(a) is not to vest title in the trustee retrospectively in the sense that under the Act he is deemed to have had title at the commencement of the bankruptcy: the effect of Section 38(a) is to vest in the trustee, when adjudication occurs, title to property which is identified by reference to the property which belonged to the bankrupt at the commencement of the bankruptcy. The consequence of this may be, and in some cases will be, to divest a third party of title to property which since the commencement of the bankruptcy he has acquired from the bankrupt. That divesting occurs when the adjudication order is made, not before.’
Browne-Wilkinson J
Gazette 15-Jul-1992, [1993] Ch 72
Bankruptcy Act 1914 18 37 38A
England and Wales
Citing:
Appealed to – 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; . .

Cited by:
Appeal from – 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; . .
Not followed – 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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.85751

European Central Railway Company v Westall: QBD 14 Nov 1865

A composition deed, in the form of Schedule D to the Bankruptcy Act, 1861, made between the defendant and his two partners of the one part, and certain trustees on behalf of the undersigned creditors of the defendant and his two partners of the other part, by which all the estate and effects of the defendant and his two partners was assigned by the defendant and his two partners for the benefit of the creditors of the defendant and his two partners, affords no answer on equitable grounds to an action against the defendant by a creditor of the defendant for his separate debt.
[1865] EngR 731, (1865) 6 B and S 970, (1865) 122 ER 1451, (1865-1866) LR 1 QB 167, [1865] UKLawRpKQB 18
Commonlii
England and Wales

Updated: 27 September 2021; Ref: scu.653035

BPE Solicitors and Another v Gabriel: SC 17 Jun 2015

Application for directions in a pending appeal. The claimant alleged negligence against his former solicitors. After his successful claim was substantially overturned on appeal, he was made bankrupt.
Held: If the trustee adopted and pursued the action, but lost, he would not become personally liable for the costs in the lower courts.
Lord Mance, Lord Sumption, Lord Carnwath, Lord Toulson, Lord Hodge
[2015] UKSC 39, [2015] 4 Costs LO 467, [2015] WLR(D) 259, [2015] AC 1663, [2015] 4 All ER 672, [2015] BPIR 779, [2015] 3 WLR 1, UKSC 2014/0026
Bailii, Bailii Summary, WLRD, SC, SC Summary, SC Video
Constitutional Reform Act 2005 40(5), upreme Court Rules 2009 46
England and Wales
Citing:
Appeal from – Gabriel v Little and Others CA 22-Nov-2013
The claimant sought repayment of sums loaned to the defendant by them under a facility letter supported by a legal charge. The charge had been enforced but the sums realised had been insufficient. . .
Cited – Borneman v Wilson CA 1884
The Wilsons, father and son, had acted as commercial agents of one Borneman. He began an action against them in the Chancery Division for an account of their dealings with his goods and obtained interlocutory relief on motion including an injunction . .
Cited – School Board for London v Wall Brothers CA 1891
. .
Cited – Heath v Tang, Stevens v Peacock CA 11-Aug-1993
The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to . .
Cited – Trustee of Property of Vickery (a Bankrupt) v Modern Security Systems Limited CA 15-Oct-1997
A trustee in bankruptcy will be treated as the party if he has in fact adopted the proceedings by conducting the litigation, even if there has been no formal substitution . .
Cited – In re Bluck, Ex parte Bluck 1887
The discretionary character of a costs order meant that it was not even a contingent liability until the order had actually been made . .
Cited – In re A Debtor (No 68 of 1911) 1911
. .
Cited – In re Pitchford 11-Jan-1924
. .
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 – Glenister v Rowe CA 21-Apr-1999
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which . .
Cited – 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 . .

Cited by:
Cited – Plevin v Paragon Personal Finance Ltd SC 29-Mar-2017
The court had ordered the respondent to pay the claimant’s costs. These were high because the solicitors had acted under a conditional fee agreement, and disproportionate to the funds at issue. The respondents challenged assignments of the original . .

Lists of cited by and citing cases may be incomplete.
Updated: 27 September 2021; Ref: scu.549064

Bell and Another v Ide and Others: Misc 4 Feb 2020

Application made by the trustees in bankruptcy in the context of an application which was made by Insolvency Act notice dated 29 January 2019, for relief in relation to two payments to the fourth and fifth respondents respectively under Sections 339, 340 or 423 of the Insolvency Act 1986.
[2020] EW Misc 3 (CC)
Bailii
Insolvency Act 1986
England and Wales

Updated: 25 September 2021; Ref: scu.655638

Haselgrove v John House: QBD 10 Nov 1865

A deed of composition under section 192 of the Bankruptcy Act, 1861, (24 and 25 Viet. c. 134), between a debtor, sureties, and his creditors, contained a clause that the parties of the third part did release all actions, . . . contracts, . . . whatsoever, which the parties of the third part now have, or which they at any time hereafter may have against, J. H., by reason, or on account of any debt or debts, . . . contracts . . . from the beginning of the world to the day of the date of the deed. Held, that the release was not unreasonable, inasmuch as it must be taken to be restrained by the whole scope and object of the deed, and confined to causes of action which could be proved by a creditor in bankruptcy.
[1865] EngR 723, (1865) 6 B and S 975, (1865) 122 ER 1453, (1865-1866) LR 1 QB 101, [1865] UKLawRpKQB 10
Commonlii, Commonlii
Bankruptcy Act 1861 192
England and Wales

Updated: 20 September 2021; Ref: scu.281635

Wood and Others v Dunn: QBD 17 Nov 1865

An order under s. 63 of the Common Law Procedure Act, 1854, does not protect the garnishee and justify him in paying the amount to the judgment creditor in all events.
Therefore it is no answer to an action by trustees of a deed under s. 192 of the Bankruptcy Act, 1861, for a debt due to the debtor, that the defendant, to avoid execution under a garnishee order, has paid the debt to the judgment creditor, in obedience to the order, after registration of the deed and with notice of it.
Semble, that the payment would have afforded no defence if made without notice.
[1865] UKLawRpKQB 23, (1865-1866) LR 1 QB 77
Commonlii
England and Wales

Updated: 20 September 2021; Ref: scu.653038

Ratford v Northavon District Council: CA 1986

The reality of the agency of a receiver is reflected in the continuity, after the appointment of receivers, of the rateable occupation of the mortgagor through the agency of the receivers. The possession of an agent is to be attributed to that of his principal for rating purposes. The facts that the receivers had had representatives on the company’s premises from time to time during the receivership and that the receivers had managed the company’s business and controlled its assets were ‘quite consistent with the company remaining in legal possession and rateable occupation of the premises’. As to the authorities: ‘they all clearly show that the mere fact that a receiver has entered upon the company’s premises for the purpose of managing and carrying on its business does not necessarily mean that the company has been dispossessed or has ceased to occupy the premises for rating purposes. If it is to be shown that a change of rateable occupation has occurred, this conclusion must be derived from the terms of the receiver’s appointment or from what he has actually done, or from both together.’ The receivers having demonstrated that their appointment did not oblige them to take possession, and that in carrying out their duties they were deemed to be the agents of the company: ‘the onus . . shifted to the council to show that the receivers had dispossessed the company, or, to put it another way, to show that the quality of any possession of the premises which the receivers might have enjoyed was not that of mere agents. For possession held by a person in his capacity as agent is in law the possession of his principal.’ ‘It is a general principle of rating law that where an agent is required to occupy a hereditament in order to secure the better performance of his duties as agent, his occupation is for rating purposes ordinarily treated as that of his principal. If, on the other hand, an agent occupies his principal’s property otherwise than in his capacity as agent, the occupation will be treated as his own for rating purposes.’
Slade LJ, Ralph Gibson LJ and Sir John Megaw
[1987] QB 357
England and Wales
Citing:
Cited – Re Marriage Neave and Co CA 1896
The court considered the liability for rates of a company’s receiver: ‘The argument that, because a receiver and manager is appointed, then ipso facto the company or persons carrying on business are turned out, is neither reasonable nor plausible. . .
Cited – National Provincial Bank of England v United Electric Theatres 1916
. .
Cited – Gyton v Palmour 1944
. .

Cited by:
Cited – In re Beck Foods Ltd: Boston Borough Council v Rees and Bennett CA 20-Dec-2001
The council appealed a decision that the administrative receivers of a company were not liable personally for the non-domestic rates otherwise incurred by a company during the receivership.
Held: The activities of the receiver or manager were . .
Cited – Silven Properties Limited, Chart Enterprises Incorporated v Royal Bank of Scotland Plc, Vooght, Harris CA 21-Oct-2003
The claimants sought damages from mortgagees who had sold their charged properties as receivers. They said they had failed to sell at a proper value. They asked whether the express appointment in the mortgage of receivers as agents of the mortgagor . .
Mentioned – Rhodes v Allied Dunbar Pension Services Ltd CA 1989
The intermediate tenant had charged the lease to the bank, which appointed receivers. Both the sub rent and the head rent fell into arrears. The head landlord then served a notice direct on the subtenant requiring him to pay the rent direct to the . .

Lists of cited by and citing cases may be incomplete.
Updated: 17 September 2021; Ref: scu.183442

Lingard And Another, Assignees Of Fry, A Bankrupt, v Messiter: 1823

In an action by the assignees of a bankrupt brought to recover property in the bankrupt’s possession as reputed owner, the plaintiffs proved that the bankrupt had once been the real owner of the goods in question, and that he continued in possession of them until he committed an act of bankruptcy
[1823] EngR 132, (1823) 1 B and C 308, (1823) 107 ER 115
Commonlii
England and Wales

Updated: 06 September 2021; Ref: scu.328172

Harvey v Dunbar Assets Plc: ChD 26 Nov 2015

Renewed application by Mr Harvey for permission to appeal the dismissal of his application to set aside a statutory demand served on him by the respondent, Dunbar Assets plc
[2015] EWHC 3355 (Ch), [2015] WLR(D) 492
Bailii, WLRD
England and Wales
Cited by:
Appeal from – Harvey v Dunbar Assets Plc CA 13-Feb-2017
This appeal raises an issue of principle in the law of bankruptcy on which there is no previous authority directly in point. If:
(a) a debtor’s application to set aside a statutory demand (‘SD1’) is dismissed on the merits, by application of . .

Lists of cited by and citing cases may be incomplete.
Updated: 28 August 2021; Ref: scu.556250

Harvey v Dunbar Assets Plc: CA 13 Feb 2017

This appeal raises an issue of principle in the law of bankruptcy on which there is no previous authority directly in point. If:
(a) a debtor’s application to set aside a statutory demand (‘SD1’) is dismissed on the merits, by application of the familiar test that the debtor has no reasonable prospect of establishing a defence or cross claim which would either extinguish the debt or reduce it below the minimum bankruptcy level of andpound;750; but
(b) SD1 is subsequently set aside on appeal, on an unrelated ground;
(c) the unrelated ground is then disposed of in the creditor’s favour, in other proceedings to which the debtor is not a party; and
(d) the creditor then serves a second statutory demand (‘SD2’) on the debtor, relying on precisely the same debt as he did when he served SD1:
Is it open to the debtor to apply to set aside SD2 on the same grounds which he unsuccessfully raised in opposition to SD1, and which he never sought to uphold on the appeal from SD1?
Held: The debtor’s appeal failed. He could show no proper prospect of defending the claim under the guarantee he had signed.
The court set out the principles of promissory estoppel: ‘Where, by his words or conduct one party to a transaction, (A) freely makes to the other (B) a clear and unequivocal promise or assurance that he or she will not enforce his or her strict legal rights, and that promise or assurance is intended to affect the legal relations between them (whether contractual or otherwise) or was reasonably understood by B to have that effect, and, before it is withdrawn, B acts upon it, altering his or her position so that it would be inequitable to permit the first party to withdraw the promise, the party making the promise or assurance will not be permitted to act inconsistently with it. B must also show that the promise was intended to be binding in the sense that (judged on an objective basis) it was intended to affect the legal relationships between the parties and A either knew or could have reasonably foreseen that B would act on it. Yet B’s conduct need not derive its origins solely from A’s encouragement or representation. The principal issue is whether A’s representation had a sufficiently material influence on B’s conduct to make it inequitable for A to depart from it.’
Gross, Henderson LJJ, Sir Stephen Tomlinson
[2017] EWCA Civ 60
Bailii
England and Wales
Citing:
Cited – Barnes v Whitehead ChD 2004
Where a party seeks to run an argument which might have been made earlier, it will inquire why those arguments were not run at the time when they could and should have been run. However, a failure to apply to set aside the statutory demand does not . .
Appeal from – Harvey v Dunbar Assets Plc ChD 26-Nov-2015
Renewed application by Mr Harvey for permission to appeal the dismissal of his application to set aside a statutory demand served on him by the respondent, Dunbar Assets plc . .

Cited by:
Cited – Jones and Another v Lydon and Others ChD 23-Aug-2021
No Estoppels Established to Override Majority
The parties were former members of a band, the Sex Pistols. They disputed the continued duty to accept the decision of the majority of its members as set out in a Band Membership Agreement. Mr Lydon asserted that over the years the obligation had . .

Lists of cited by and citing cases may be incomplete.
Updated: 28 August 2021; Ref: scu.574296

In re Clark (a bankrupt); ex parte the Trustee v Texaco Ltd: ChD 1975

Walton J restated the rule in In re James: ‘the rule provides that where it would be unfair for a trustee to take full advantage of his legal rights as such, the court will order him not to do so, and, indeed, will order him to return money which he may have collected.’ To attract the defense it must be shown that: (1) There must be some form of enrichment of the assets of the bankrupt by the person seeking to have the rule applied (citing Government of India v Taylor [1955] AC 491 per Lord Keith). (2) Except in the most unusual cases, the claimant must not be in a position to submit an ordinary proof of debt. The rule is not to be used merely to confer a preference on an otherwise unsecured creditor, but to provide relief for a person who would otherwise be without any. (3) In all the circumstances, it was not fair for an honest person to keep the money. (4) When the rule applies, it applies only to the extent necessary to nullify the enrichment of the estate.’
Walton J
[1975] 1 WLR 559, [1975] 1 All ER 453
England and Wales
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 . .
Cited – Getliffe and Another, Re Lune Metal Products Ltd CA 14-Dec-2006
. .

Lists of cited by and citing cases may be incomplete.
Updated: 23 August 2021; Ref: scu.537956

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.
Lord Dyson MR, Rimer, Patten LJJ
[2013] EWCA Civ 968, [2013] WLR(D) 333, [2014] 1 All ER (Comm) 176, [2013] 3 WLR 1167, [2014] 1 All ER 168, [2014] Ch 52, [2013] STI 2677, [2013] BCC 655, [2014] 1 BCLC 302, [2014] 1 Lloyd’s Rep 113, [2013] Lloyd’s Rep FC 620, [2013] STC 2298
Bailii
England and Wales
Citing:
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. . .
Cited – 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 – HMRC v Greener Solutions UTTC 18-Jan-2012
UTCC INPUT TAX – MTIC fraud – whether agent’s knowledge attributed to company – yes-appeal allowed
Greener Solutions sought repayment of the input tax incurred in respect of mobile telephones it had bought . .
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 – Holman v Johnson 5-Jul-1775
ex turpi causa non oritur actio
Mansfield LCJ set out the principle of ex turpi causa non oritur actio: ‘The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, . .
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 – 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 – 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 – Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013
In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The . .

Cited by:
Appeal from – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.
Updated: 23 August 2021; Ref: scu.514238

Evans v Clayhope Properties Ltd: CA 1988

Nourse LJ doubted whether a receiver’s remuneration could be recovered as litigation costs.
Nourse LJ
[1988] 1 WLR 358
England and Wales
Citing:
Cited – Boehm v Goodall ChD 24-Nov-1910
Receiver – Partnership Action – Consent Order appointing Receiver and Manager
– Payments by Receiver – Insufficiency of Assets – Indemnity – Claim
against Partners personally.
In an action for dissolution of partnership a receiver . .
Appeal from – Evans v Clayhope Properties Ltd ChD 1987
Vinelott J doubted whether a receiver’s remuneration could be recovered as litigation costs . .

Cited by:
Cited – Capewell v Revenue and Customs and Another HL 31-Jan-2007
The defendant appealed against an order regarding the remuneration of a receiver appointed to administer a restraint order placed on the assets of the defendant under the 1988 Act on the basis of an allegation that the defendant had been involved in . .

Lists of cited by and citing cases may be incomplete.
Updated: 20 August 2021; Ref: scu.248337

Boehm v Goodall: ChD 24 Nov 1910

Receiver – Partnership Action – Consent Order appointing Receiver and Manager
– Payments by Receiver – Insufficiency of Assets – Indemnity – Claim
against Partners personally.
In an action for dissolution of partnership a receiver and manager was, by a consent order, appointed to carry on the partnership business with a view to its sale as a going concern. In carrying on the business the receiver and manager made payments which the assets were insufficient to satisfy in full and claimed to be indemnified by the partners personally in respect of the balance due to him.
Held: that the receiver was an officer of the Court and could only look to the assets under the control of the Court for his indemnity.
Held: therefore, that he was not entitled to be indemnified by the partners personally, and that the fact that the order appointing him was made by consent of the partners did not put him in any better position as against them
Warrington J said: ‘Such a receiver and manager [that is one appointed by the court] is not the agent of the parties, he is not a trustee for them, and they cannot control him. He may, as far as they are concerned, incur expenses or liabilities without their having a say in the matter. I think it is of the utmost importance that receivers and managers in this position should know that they must look for their indemnity to the assets which are under the control of the court. The court itself cannot indemnify receivers, but it can, and will, do so out of the assets, so far as they extend, for expenses properly incurred; but it cannot go further. It would be an extreme hardship in most cases to parties to an action if they were to be held personally liable for expenses incurred by receivers and managers over which they have no control. But the receiver here says that this is not the ordinary case, because the judgment appointing him was by consent and, by consenting, all the parties have impliedly requested him to incur these liabilities. In my opinion that fact makes no difference at all. If I were to accede to that argument, I should have to hold in every case that the person who puts the court in motion and gets a receiver appointed would have to indemnify the receiver. The fact that the order was made by consent does not, in my opinion, distinguish this case from the numerous cases in which orders have been made without consent.’
Warrington J
[1911] 1 Ch 155, [1910] UKLawRpCh 134
Commonlii
England and Wales
Cited by:
Cited – In Re Andrews CA 25-Feb-1999
The defendant and his son had been charged with offences relating to their joint business, and restraint orders were made. The son was convicted, but the defendant was acquitted and awarded his costs out of central funds. The taxing officer held . .
Cited – Evans v Clayhope Properties Ltd ChD 1987
Vinelott J doubted whether a receiver’s remuneration could be recovered as litigation costs . .
Cited – Evans v Clayhope Properties Ltd CA 1988
Nourse LJ doubted whether a receiver’s remuneration could be recovered as litigation costs. . .
Cited – Capewell v Revenue and Customs and Another HL 31-Jan-2007
The defendant appealed against an order regarding the remuneration of a receiver appointed to administer a restraint order placed on the assets of the defendant under the 1988 Act on the basis of an allegation that the defendant had been involved in . .

Lists of cited by and citing cases may be incomplete.
Updated: 20 August 2021; Ref: scu.231652

Evans v Clayhope Properties Ltd: ChD 1987

Vinelott J doubted whether a receiver’s remuneration could be recovered as litigation costs
Vinelott J
[1987] 1 WLR 225, [1987] 2 All ER 40
England and Wales
Citing:
Cited – Boehm v Goodall ChD 24-Nov-1910
Receiver – Partnership Action – Consent Order appointing Receiver and Manager
– Payments by Receiver – Insufficiency of Assets – Indemnity – Claim
against Partners personally.
In an action for dissolution of partnership a receiver . .

Cited by:
Appeal from – Evans v Clayhope Properties Ltd CA 1988
Nourse LJ doubted whether a receiver’s remuneration could be recovered as litigation costs. . .
Cited – Capewell v Revenue and Customs and Another HL 31-Jan-2007
The defendant appealed against an order regarding the remuneration of a receiver appointed to administer a restraint order placed on the assets of the defendant under the 1988 Act on the basis of an allegation that the defendant had been involved in . .

Lists of cited by and citing cases may be incomplete.
Updated: 20 August 2021; Ref: scu.248336

Everson and Barrass v Secretary of State for Trade and Industry and Bell Lines Ltd: ECJ 16 Dec 1999

Europa Where the employees adversely affected by the insolvency of their employer were employed in a Member State by the branch established in that State of a company incorporated under the laws of another Member State, where that company has its registered office and in which it was placed in liquidation, the competent institution, under Article 3 of Directive 80/987 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, for payment to those employees of outstanding claims is that of the State within whose territory they were employed.
C-198/98, [1999] EUECJ C-198/98
Bailii
European

Updated: 20 August 2021; Ref: scu.162404

In re SBA Properties Ltd: ChD 1967

A court action had been raised in the name of a company without authority, giving rise to a possible liability in expenses to the defendants. One of the defendants claimed that, in the event that the company’s liquidator ratified the action, that liability would become a debt of the company, which would be related back to the beginning of the action.
Held: At the date when the question arose, prior to winding up, the possibility that the company would be liable to pay the expenses did not amount to a contingent debt, as it depended on ratification by the liquidator, if he chose to do so.
Pennycuick J
[1967] 1 WLR 799, [1967] 2 All ER 615
England and Wales
Citing:
Helpful – In re Sutherland, dec’d; Winter v Inland Revenue Commissioners HL 1963
The concept of a contingent liability was considered.
Held: In Scots law, a contingent liability is a liability which, by reason of something done by the person bound, may or may not arise depending on the happening of a future event.
Cited by:
Cited – 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.
Updated: 20 August 2021; Ref: scu.537711

Chohan v Saggar: ChD 1992

Section 423(3) of the 1986 Act requires a plaintiff to show a dominant purpose to remove assets from the reach of actual or potential claimants or creditors, but not excluding the possibility that there might be other purposes behind the relevant transfer.
Mr Evans-Lombe QC
[1992] BCC 306
Insolvency Act 1986 423(3)
England and Wales
Cited by:
Appeal from – Chohan v Saggar and Another CA 27-Dec-1993
The word ‘and’ in sections 423(2)(a) and 423(2)(b) is to be read conjunctively not disjunctively. Section 238(3) is to be interpreted as requiring restoration of the former position ‘as far as possible’ or ‘as far as practicable’, and that . .
Cited – Sugar v British Broadcasting Corporation and Another (2) SC 15-Feb-2012
The claimant sought release of a report prepared by the respondent as to its coverage of the Arab/Israel conflict partly for journalistic purposes, and partly for compliance.
Held: The appeal failed. Where the report was prepared even if only . .

Lists of cited by and citing cases may be incomplete.
Updated: 20 August 2021; Ref: scu.451297

Brac Rent-A-Car International Inc: ChD 7 Feb 2003

The company was incorporated in Delaware. Its main centre of business was within the UK. The company resisted an attempt to wind the company up here.
Held: The English courts had jurisdiction. The company’s contracts were subject to English law, their employees were here, and their contracts also were under UK law. Whilst article 3 did not expressly extend its ambit to companies incorporated outside the EU, it should be read to do so, because its scope was defined primarily by reference to the area of operations of the company, and such an application was not excluded.
The Hon Mr Justice Lloyd
Times 24-Feb-2003, [2003] EWHC 114 (Ch), Gazette 01-Apr-2003, [2003] 2 All ER 201
Bailii
Council Regulation (EC) 1346/2000 3, Insolvency Act 1986 8(7)
England and Wales
Cited by:
Cited – In re The Salvage Association ChD 9-May-2003
The company wished to enter into a voluntary arrangement to protect itself from insolvency, but was an association incorporated by Royal Charter.
Held: For the purposes of the Act, the association was to be treated as having a legal persona . .

Lists of cited by and citing cases may be incomplete.
Updated: 20 August 2021; Ref: scu.179589

Inland Revenue v Hashmi and Another: CA 3 May 2002

The question for the court was whether when there was more than one purpose of a transaction the proscribed purpose under the section had to be dominant or not.
Held: It was not necessary for the proscribed purpose to be the dominant purpose; it was sufficient if it was a real substantial purpose.
Arden LJ said: ‘Section 423 plays an important role in insolvency law. It can moreover apply even though the debtor is not in a formal insolvency . . Section [423] is a carefully calibrated section forming part of a carefully calibrated group of sections.’ The court should construe the provision as permitting the court to set aside a transaction entered into for a number of purposes provided that a real substantial purpose was to put assets beyond the reach of the Revenue. It would have confounded the purpose of the provision to permit the defendant to avoid an order merely because other purposes could be demonstrated.
Arden LJ
[2002] EWCA Civ 981, [2002] 2 BCLC 489, [2002] BPIR 974
Bailii
Insolvency Act 1986 423
England and Wales
Citing:
Appeal from – Inland Revenue Commissioners v Hashmi and Another ChD 4-Oct-2001
In 1989, the taxpayer transferred property by means of a trust deed in favour of his son in consideration of his ‘natural love and affection’ for him. Four years later the commissioners investigated his tax affairs, and concluded that there were . .
Cited – Edgington v Fitzmaurice CA 7-Mar-1885
False Prospectus – Issuers liable in Deceit
The directors of a company issued a prospectus, falsely stating that the proceeds were to be used to complete alterations to the buildings of the company, to purchase horses and vans and to develop the trade of the company. In fact it was to pay off . .

Cited by:
Cited – Hill (As Trustee In Bankruptcy of Nurkowski) v Spread Trustee Company Ltd and Another CA 12-May-2006
hill_spreadCA2006
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 – Hayes v Willoughby CA 13-Dec-2011
Harassment Occurs on the Result, not the Intention
The claimant said that over several years, the respondent had pursued him in many ways challenging his management of a company’s affairs. Complaints had been investigated by the insolvency service and by the police who had discovered nothing to . .

Lists of cited by and citing cases may be incomplete.
Updated: 16 August 2021; Ref: scu.217183

Al Jaber and Others v Mitchell and Others: CA 30 Jul 2021

Whether the immunity from suit afforded to participants in court proceedings, including to parties and witnesses of fact, applies to statements made under oath and by witness statement by an examinee in the course of a private examination conducted under section 236 of the Insolvency Act 1986
[2021] EWCA Civ 1190
Bailii
England and Wales

Updated: 12 August 2021; Ref: scu.666316

Palmer v Carey: PC 1926

A lender financed a trader in goods, on the basis the proceeds of sale of the goods be paid into an account in the name of the lender, and that the lender recoup himself on a monthly basis in respect of sums advanced, with the balance being released to the trader subject to a right for the lender to retain a sum representing an agreed share of the trader’s profit. The trader subsequently became bankrupt. At the date of the bankruptcy, a substantial sum was owing to the lender in respect of sums advanced. The lender claimed security over goods and proceeds of sale in the hands of the trader.
Held: The lender had no such security: ‘The law as to equitable assignment, as stated by Lord Truro in Rodick v. Gandell, is this: ‘The extent of the principle to be deduced is that an agreement between a debtor and a creditor that the debt owing shall be paid out of a specific fund coming to the debtor, or an order given by a debtor to his creditor upon a person owing money or holding funds belonging to the giver of the order, directing such person to pay such funds to the creditor, will create a valid equitable charge upon such fund, in other words, will operate as an equitable assignment of the debts or fund to which the order refers. An agreement for valuable consideration that a fund shall be applied in a particular way may found an injunction to restrain its application in another way. But if there be nothing more, such a stipulation will not amount to an equitable assignment. It is necessary to find, further, that an obligation has been imposed in favour of the creditor to pay the debt out of the fund. This is but an instance of the familiar doctrine of equity that a contract for valuable consideration to transfer or charge a subject matter passes a beneficial interest by way of property in that subject matter if the contract is one of which a Court of equity will decree specific performance.’
Lord Wrenbury
[1926] AC 703
Commonwealth
Cited by:
Cited – Edwards, Drummond Smith v Flightline Limited CA 5-Feb-2003
The applicant company obtained an injunction against another company. That freezing injunction was discharged upon the payment of a sum into the names of the respective parties’ solicitors. The company went into liquidation, and the claimant . .
Adopted – Swiss Bank Corporation v Lloyds Bank Ltd CA 1981
An equitable charge is created when property is expressly or constructively made liable to the discharge of a debt or some other obligation, and the charge confers on the chargee a right of realisation by judicial process such as a sale order. . .
Cited – Ernst Kastner v Marc Jason, Davis Sherman, Brigitte Sherman CA 2-Dec-2004
The parties had agreed that their dispute should be resolved before the Jewish Beth Din according to Jewish substantive and procedural law. K was granted an interim freezing order. The defendant sold the asset, and K sought to assert a charge.
Updated: 11 August 2021; Ref: scu.179796

Union Bank v M’Murray: HL 18 Feb 1873

M and Co being involved in the affairs of a bankrupt firm, purchased for pounds 45,000 certain subjects from the trustee of the firm. To enable them to do so, they borrowed this sum from the Union Bank, and, by an agreement with the Bank, pounds 7500 of the price was to be paid into the trustee’s account for behoof of the personal creditors, and the balance of pounds 37,500, less pounds 2500, into a separate account for behoof of the heritable creditors. Thereafter, D. and Co. agreed to purchase the property from M. and Co. for pounds 47,000, the Bank agreeing to advance this sum to D. and Co., and to credit the sum to M. and Co. in part payment of a large debt due by them to the Bank. Held (affirming the judgment of the First Division), that the second agreement had not superseded the first, and that M. and Co. were still indebted to the Bank in the sum of pounds 45,000.
[1873] UKHL 319, 10 SLR 319
Bailii
England and Wales

Updated: 11 August 2021; Ref: scu.652906

In Re William Hockley Ltd: ChD 1962

Pennycuick J said: ‘The expression ‘contingent creditor’ is not defined in the Companies Act 1948, but it must, I think, denote a person towards whom under an existing obligation, the company may or will become subject to a present liability upon the happening of a future event or at some future date or at some future date’. The importance of these words for present purposes lies in their insistence that there must be an existing obligation, and that out of that obligation a liability on the part of the company to pay a sum of money will arise in a future event, whether it be an event that must happen or only an event that may happen.’
Pennycuick J
[1962] 1 WLR 555, [1962] 2 All ER 111
Companies Act 1948 224(1)
England and Wales

Updated: 07 August 2021; Ref: scu.416336

O’Donnell, Ex parte: QBD 16 Nov 1865

An officer of a friendly society, ‘being indebted to the society for moneys received on their behalf, resigned his office and made an assignment for the benefit of his creditors, The assignee received from the estate more than the balance due to the society, but refused to pay it over. No specific money belonging to the society was proved to have come to the hands of the assignee.
Held: that the assignee was not liable to be proceeded against before justices under s. 24 of the 18 and 19 Vict. c. 63.
(1865-1866) LR 1 QB 274, [1865] UKLawRpKQB 22
Commonlii
England and Wales

Updated: 07 August 2021; Ref: scu.653037

The New Hampshire Insurance Company v Rush and Tompkins Group Plc, Rush and Tompkins International Limited: CA 3 Oct 1996

The applicant appealed against dismissal of two petitions to wind up the respondent companies. Group members in England were already subject to winding up orders, and the companies faced similar proceedings in Holland. The only asset was a bank account which would not be released to the applicant, and a contentious debt.
Held: The petitioner’s remedy, as a contingent creditor of BV, was to prove in the Dutch proceedings, and to apply to the Dutch Court for whatever remedy it is entitled to. Appeal dismissed.
[1996] EWCA Civ 634
England and Wales

Updated: 06 August 2021; Ref: scu.140501

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 insolvent could call in aid possible longer term claims.
Held: The appeal failed, but the result was upheld on a different reasoning. Section 123 should not be read to have substantially change the law, and therefore when considering projected cashflows, it was correct to include debts falling due from time to time in the forseeabe reasonable future as well as those already due. It was necessary however to avoid including sums which would be properly described as merely speculative. Each case must be looked at in its own particular context, having particular regard to the nature of the business. The relevant test was properly the ‘balance sheet test’. A party wishing to say that a sum should not be so properly included had the responsibility of establishing that.
Lord Hope, Deputy President, Lord Walker, Lord Mance, Lord Sumption, Lord Carnwath
[2013] UKSC 28, [2013] BCC 397, [2013] 1 WLR 1408, [2013] 3 All ER 271, [2013] 1 BCLC 613, [2013] Bus LR 715, [2013] 2 All ER (Comm) 531, UKSC 2011/0086
Bailii, Bailii Summary, SC Summary, SC
Insolvency Act 1986 123
England and Wales
Citing:
At First Instance – BNY Corporate Trustee Services Ltd v Eurosail-UK 2007-3BL Plc and Others ChD 30-Jul-2010
The parties disputed whether the respondent was in law insolvent at the time it entered into financial transactions with it.
Held: The Court rejected the Noteholders’ submission that Eurosail was plainly insolvent for the purposes of section . .
Appeal from – BNY Corporate Trustee Services Ltd v Eurosail-UK 2007-3BL Plc and Others CA 7-Mar-2011
The court was asked questions to interpret the terms of interest-bearing notes, which were issued by Eurosail-UK 2007-3BL PLC, a special purpose vehicle formed to hold income-producing assets, consisting of mortgage loans, to be used to meet the . .
Cited – Cornhill Insurance plc v Improvement Services Ltd 1986
Held: Where a company was under an undisputed obligation to pay a specific sum and failed to do so, it could be inferred that it was unable to do so; that accordingly, the defendants could properly swear to their belief in the plaintiff company’s . .
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 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 – 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 – 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 – In re a Company (No 0012209 of 1991) ChD 1992
It is an abuse of the process of the court to make a statutory demand or present a winding-up petition based on a claim to which there is a triable defence. Where a statutory demand is made but disputed on reasonable grounds, the creditor may find . .
Approved – 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 . .
Cited – Rainy Sky Sa and Others v Kookmin Bank SC 2-Nov-2011
Commercial Sense Used to Interpret Contract
The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the . .

Lists of cited by and citing cases may be incomplete.
Updated: 28 July 2021; Ref: scu.503498

Watts v Revenue and Customs: CA 27 Jul 2021

Whether the judge should have granted an extension of time to enable the appellant, Mr W to comply with an unless order, which refusal to extend time resulted in the striking out of his intended appeal to the High Court from a bankruptcy order which had been made against him.
Sir Christopher Floyd
[2021] EWCA Civ 1124
Bailii
England and Wales

Updated: 28 July 2021; Ref: scu.666177