Category: Insolvency

Nelson v Nelson: CA 6 Dec 1996

A solicitor appealed against an order requiring him to contribute to the costs of Mareva injunction applied for on behalf of his bankrupt client.
Held: Solicitors were not liable in costs personally for starting proceedings on behalf of a bankrupt. A bankrupt has power to instruct solicitor to commence proceedings. Waller LJ
Gibson LJ said: ‘s.306 of the Insolvency Act 1986 . . vested in the trustee in bankruptcy property such as the bankrupt’s claimed interest in [the subject matter of that claim] on the bankruptcy . . the question to be answered is whether the bankrupt had capacity to retain a solicitor to commence the proceedings which he did commence. These proceedings are not a nullity such as would have been the case if the plaintiff did not exist. But they were liable to be stayed or struck out because the bankrupt did not have any interest in the property, such interest as he did have prior to the bankruptcy order having vested in the trustee in bankruptcy. They might be stayed pending the decision of the trustee in bankruptcy to take over the proceedings. Alternatively, if the trustee did not wish to do so, a defendant could apply to strike out the action’.
Waller LJ said: ‘if the solicitor commences an action for a bankrupt in relation to a cause of action which is vested in the bankrupt’s trustee, there will on most occasions be negligence bringing into play the jurisdiction which does not depend on an analogy with breach of warranty of authority’.

Judges:

Gibson LJ, Waller LJ

Citations:

Gazette 15-Jan-1997, Times 08-Jan-1997, [1996] EWCA Civ 1140, [1997] 1 WLR 233, [1997] 1 All ER 979

Links:

Bailii

Statutes:

Insolvency Act 1986 306

Jurisdiction:

England and Wales

Citing:

Cited – Myers v Elman HL 1939
The solicitor had successfully appealed against an order for a contribution to the other party’s legal costs, after his clerk had filed statements in court which he knew to be misleading. The solicitor’s appeal had been successful.
Held: The . .

Cited by:

Cited – Thames Chambers Solicitors v Miah QBD 16-May-2013
The solicitors appealed against a wasted costs order. They had accepted instructions to act for a bankrupt in pursuing a debt before his discharge and without the debt having been assigned to him by the trustee in bankruptcy.
Held: The order . .
Cited – Pickthall and Another v Hill Dickinson Llp CA 11-Jun-2009
The court was asked as to the extent to which it is an abuse of the process for a claimant to commence proceedings without having the relevant cause of action vested in him, and whether it would be right to allow him to amend his pleadings to plead . .
Lists of cited by and citing cases may be incomplete.

Legal Professions, Insolvency, Litigation Practice

Updated: 04 November 2022; Ref: scu.141008

Re Fundingsecure Ltd: ChD 31 Mar 2021

Application seeking the Court’s directions on the true construction of terms and conditions regulating the relationship between the Company and third parties, some of whom claim to be its creditors.

Judges:

His Honour Judge Pearce

Citations:

[2021] EWHC 798 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency

Updated: 04 November 2022; Ref: scu.660788

Alipour v Ary and Schweininger: CA 17 Dec 1996

The petitioner appealed against rejection of his contributor’s winding up petition.
Held: The Companies court was the appropriate place to determine a dispute on winding up petition. A dispute on locus standi can be dealt with in the winding-up proceedings without necessitating a stay of the petition, provided that the petition is not likely to cause substantial damage or inconvenience to the company.

Judges:

McGowan LJ, Sir Peter Gibson, Hutchison LJ

Citations:

Times 18-Dec-1996, [1996] EWCA Civ 1229, [1997] 2 BCLC 770, [1997] 1 WLR 534

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Re JN 2 Ltd ChD 1978
The court will require any dispute as to the status or locus standi of a party to be resolved in separate proceedings before a winding-up petition is heard. The Court highlighted the extent and applicability of Section 224(1) of the 1948 Act, . .

Cited by:

Mentioned – Cadbury Schweppes Plc and Another v Halifax Share Dealing Ltd and Another ChD 23-May-2006
Fraudsters had successfully contrived to sell shares of others, by re-registering the shares to new addresses and requesting new certificates. The question was which of the company, the company registrars and the stockbrokers should bear the loss. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 04 November 2022; Ref: scu.77736

The Royal Bank of Scotland Plc v Hill: SCS 3 Jul 2012

(Opinion) The bank sought production of a statutory demand issued against it by the defendant. It was said to have been served by misplaced by them, but denied that it had any valid basis. The defender alleged fraud but had not given any justification for his assertions or claim.
Held: ‘the defender’s position in this action is seriously misconceived. He appears to think that unless the pursuers choose to respond to his various assertions that substantial sums are due to be paid by them to him he is entitled to serve a statutory demand leading to winding-up of the pursuers.’

Judges:

Lord Pentland

Citations:

[2012] ScotCS CSOH – 110

Links:

Bailii

Statutes:

Insolvency Act 1986 123(1)

Citing:

Cited – Shedden v Patrick 1852
Pleaded allegations of fraud must be based on clear and specific averments of fact from which an inference of fraud may legitimately be drawn . .
Lists of cited by and citing cases may be incomplete.

Scotland, Insolvency

Updated: 03 November 2022; Ref: scu.461935

Hurley v The Darjan Estate Company Plc: ChD 10 Feb 2012

H appealed against an order made for his bankruptcy on an application by DJ.

Judges:

Geraldine Andrews QC

Citations:

[2012] Ewhc 189 (Ch)

Links:

Bailii

Jurisdiction:

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

Insolvency, Litigation Practice

Updated: 03 November 2022; Ref: scu.461755

Re NP Engineering and Security Products Ltd; Official Receiver and Another v Pafundo and Another: CA 22 Oct 1996

The official receiver began director disqualification proceedings, but before the proceedings commenced, the company was wound up. Where, on an application for the disqualification of a director, the official receiver and the Secretary of State became aware that the company had in fact already been dissolved, the normal course would be to transfer the proceedings from the County Court to the High Court and to substitute the Secretary of State as applicant in the place of the official receiver.
The court gave guidance on the application of section 42(1)(b) of the 1984 Act, saying: ‘provided proceedings are started within the time permitted by the statute of limitations, are not frivolous, vexatious or an abuse of the process of the court and disclose a cause of action, they will not as a rule be struck out because of some mistake in procedure on the part of the plaintiff or his advisers . . No injustice is involved to the defendant in transferring an action which has been started in the wrong court to the correct court.’

Judges:

Simon Brown, Waite, Morritt LJ

Citations:

[1996] EWCA Civ 782, [1998] 1 BCLC 208

Statutes:

County Courts Act 1984 40 42(1)(b), Company Directors Disqualification Act 1986 6, Insolvency Act 1986 205(2)

Jurisdiction:

England and Wales

Citing:

Cited – In Re the Working Project Ltd; In Re Fosterdown Ltd and Others ChD 27-Oct-1994
Company disqualification proceedings may conclude in the county court after a winding up of the company in that court. The power to disqualify directors survives the finishing of the winding up of the company, even though the Official Receiver had . .

Cited by:

Cited – Schmidt v Wong CA 7-Dec-2005
The claimant began a personal injury claim against her landlord. She wanted a freezing order, but began her claim in the County court. When she became aware that the county court had no jurisdiction to grant such an order, he sought to have the . .
Cited – Howarth v Gwent Constabulary and Another QBD 1-Nov-2011
The claimant alleged malicious prosecution and misfeasance in public office against the defendant. He had been charged with perverting the course of justice. He had worked for a firm of solicitors specialising in defending road traffic prosecutions. . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company, Insolvency

Updated: 01 November 2022; Ref: scu.237553

Re MK Airlines Ltd: ChD 26 Apr 2012

The company had appointed administrators. They were later discharged in the belief that the company was solvent. This proved incorrect, and on a creditor’s winding up petition, new interim receivers were appointed. On the winding up, liquidators were appointed, who now sought clarification of the status of charges over the company’s assets in favour of the earlier administrator and receivers in respect of their costs.
Held: The charges were valid and enforceable despite a lacuna in the legislation.

Judges:

Sir Andrew Morritt Ch

Citations:

[2012] EWHC 1018 (Ch), [2013] Bus LR 169, [2014] BCC 87, [2012] 3 All ER 781, [2013] 1 BCLC 9

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Insolvency

Updated: 31 October 2022; Ref: scu.459621

Whitehouse v Wilson (Liquidator of Vol-Mec Ltd) and Another: CA 7 Dec 2006

Citations:

[2006] EWCA Civ 1688

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – In re Edennote Ltd (No 2) ChD 1997
Sanction was sought against a liquidator. Lightman J said: ‘The question is the commercial best interests of the company, reflected prima facie, by the commercial judgment of the liquidator, a judgment in my view which, in the circumstances and in . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 31 October 2022; Ref: scu.246805

In Re Edennote Ltd; Tottenham Hotspur plc v Ryman: CA 21 May 1996

The company was in liquidation. Terence Venables, who had owned the shares, had taken an assignment of a cause of action against the football club. The court had set aside that assignment, and removed the liquidator. Venables now appealed saying that the court had been wrong to intervene.
Held: The appeal succeeded in part. The assignment was not re-instated, but the liquidator was. An unsecured creditor did have the right to ask a court to impugn a liquidator’s transactions. Although the words ‘on cause shown’ in section 108(2) do not appear in section 172(2), the difference in the language of the two provisions was immaterial for the purposes of the case. In the case of a compulsory liquidation, the court will not lightly remove its own officer; and the court will, among other considerations, pay a due regard to the impact of removal on the liquidator’s professional standing and reputation. Sir John Vinelott’s statement was correct with the addition that any belief of the creditors must be reasonable. In this case, although the liquidator had made a serious mistake, it was honest, and his integrity and good faith were accepted, and, in all the circumstances, this liquidator ought not to have been removed. No adequate or reasonable grounds had been shown for his removal. When liquidators are exercising their administrative powers to realise assets, the court will be very slow to substitute its judgment for that of the liquidators’ on what is essentially a businessman’s decision.
Nourse LJ said about counsel’s propostion that the correct test for intervening was: ‘namely (fraud and bad faith apart) that the court will only interfere with the act of a liquidator if he has done something so utterly unreasonable and absurd that no reasonable man would have done it’ that ‘it is certainly possible for a liquidator to do something so utterly unreasonable and absurd that no reasonable man would have done it, simply by selling an asset of the company without taking into account the possibility that a third party might well have made a better offer than he to whom it was sold. That was what Sir John Vinelott found Mr Ryman had done in this case and that, no doubt, was why he expressed himself as he did. It does not mean that he applied the wrong test. I am that satisfied that he did not.’ The applicant was a disappointed purchaser and ‘In the latter capacity alone, like any other outsider to the liquidation, they would not have had the locus standi to apply under section 168(5).’

Judges:

Nourse LJ, Millett LJ

Citations:

Times 03-Jun-1996, Gazette 03-Jul-1996, [1996] 2 BCLC 389

Statutes:

Insolvency Act 1986 108(2) 168(5) 172

Jurisdiction:

England and Wales

Citing:

Approved – In re Keypak Homecare Ltd ChD 1987
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: ‘The section authorises the court to remove the liquidator ‘on cause shown’. That is not the same as saying ‘if the court shall . .
Appeal from – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman ChD 1-Nov-1994
The company Edennote had been wound up on insolvency. It had a possible claim for fees against Tottenham, owned by Mr Sugare. The shareholder, Terry Venables, took an assignment of that action. An application was made to set aside the assignment and . .

Cited by:

Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
See Also – In re Edennote Ltd (No 2) ChD 1997
Sanction was sought against a liquidator. Lightman J said: ‘The question is the commercial best interests of the company, reflected prima facie, by the commercial judgment of the liquidator, a judgment in my view which, in the circumstances and in . .
Cited – In re Buckingham International Plc and In the Matter of Insolvency Act 1986; Mitchell v Buckingham International Plc CA 16-Feb-1998
. .
Cited – Mahomed and Another v Morris and Others CA 17-Feb-2000
. .
Cited – Ultraframe (UK) Ltd v Rigby and others CA 19-Jan-2005
Appeal against strike out of application to have set aside deeds of assignment. . .
Cited – Cintec International Ltd, Re Sequestration ScSf 12-May-2006
. .
Cited – Sisu Capital Fund Ltd and others v Tucker and others ChD 9-Sep-2005
. .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 31 October 2022; Ref: scu.81864

Churchill and Another v First Independent Factors and Finance Ltd.: CA 30 Nov 2006

‘the circumstances in which a person who was a director of a company when it went into insolvent liquidation may be brought within an exception to the provisions of sections 216 and 217 of the Insolvency Act 1986 (‘the Act’) – provisions which would otherwise render that person liable for the debts and liabilities of a new company of which he is a director, being a company having a name which is so similar to the name of the company in liquidation as to suggest an association with that company (i.e. a ‘prohibited name’ within the meaning of section 216). ‘

Citations:

[2006] EWCA Civ 1623, Times 11-Jan-2007, [2007] Bus LR 676

Links:

Bailii

Statutes:

Insolvency Act 1986 216 217

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 27 October 2022; Ref: scu.246724

Lloyds Bank Plc and others v Cassidy: CA 8 Nov 2002

Judges:

Mance LJ

Citations:

[2002] EWCA Civ 1606

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Lloyds Bank v Cassidy CA 26-Jul-2002
Application for leave to appeal – adjourned . .
See Also – Lloyds Bank Plc and others v Cassidy CA 1-Dec-2004
The defendant sought leave to appeal against orders for possession. The trial had been transcribed by the claimant. At the start of the application, a copy of the transcript was given to the judge but not the defendant despite his application.

Cited by:

See Also – Lloyds Bank v Cassidy CA 26-Jul-2002
Application for leave to appeal – adjourned . .
See Also – Lloyds Bank Plc and others v Cassidy CA 1-Dec-2004
The defendant sought leave to appeal against orders for possession. The trial had been transcribed by the claimant. At the start of the application, a copy of the transcript was given to the judge but not the defendant despite his application.
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 27 October 2022; Ref: scu.188964

Royal Bank of Scotland v Farley: CA 1996

If it can be demonstrated by evidence subsequent to the bankruptcy order, that the debts on which the petition was founded did not exist, then it would be right to say that there was a ground existing at the time the order was made on which it should not have been made.

Judges:

Hoffmann LJ

Citations:

[1996] BPIR 638

Jurisdiction:

England and Wales

Cited by:

Cited – Owo-Samson v Barclays Bank Plc, Boyden CA 21-May-2003
The appellant challenged a formal statutory demand which had led to his bankruptcy. The demand had included the anticipated cost of realising the charged property, and also had been inflated to allow for extra costs of dealing the appellant who was . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 27 October 2022; Ref: scu.182735

In re Mordant: CA 1996

The court discussed the interplay of family and insolvency proceedings: ‘Since the wife is unable to prove in the husband’s bankruptcy, the position . . is that the husband’s trustee must use the andpound;385,000 in paying the trustee’s expenses and remuneration and, subject to that, he must distribute the money between the husband’s creditors but excluding the wife. This would mean there would be a substantial surplus available to be returned to the husband. No doubt the wife could take steps to intercept the surplus. Even so, the result would be that the unsecured creditors would be paid in full, save for the wife. She would not receive the whole of the lump sum ordered by the judge. Indeed, far from even sharing equally with the husband’s other creditors, she would rank behind them all. She would receive the crumbs from the husband’s table left unconsumed by his other creditors. This is the consequence of r 12.3(2)(a) ‘ and ‘I feel bound to say that the exclusion of an obligation to pay a lump sum arising under an order in family proceedings from proof as a debt in bankruptcy is a matter which would bear re-examination as a matter of urgency . . ‘

Judges:

Sir D Nicholls V-C

Citations:

[1996] 1 FLR 334

Jurisdiction:

England and Wales

Citing:

Appeal From – Mordant v Hallas ChD 2-Aug-1993
A debt due which consisted of a matrimonial lump sum order is not provable in a bankruptcy. . .
Cited – Woodley v Woodley (2) CA 12-Apr-1993
A stay of execution of an order against matrimonial assets was not defeated by bankruptcy. As to the interplay of the Insolvency Rules and matrimonial proceedings.
Balcombe LJ said: ‘I cannot leave this case without saying something about the . .
Cited – Smith (a bankrupt) v Braintree District Council HL 1989
The House considered the effects of bankruptcy on the imposition of a committal to imprisonment in default of paying rates.
The purpose of section 285 is to preserve the estate of the bankrupt for the benefit of his unsecured creditors.

Cited by:

Cited – Flightline Ltd v Edwards and Another ChD 2-Aug-2002
Money had been paid into an account in the joint names of the parties’ solicitors in order to purchase the release of the applicants from an asset freezing order. The respondent company was in liquidation. It was argued that the payment of funds . .
Appealed to – Mordant v Hallas ChD 2-Aug-1993
A debt due which consisted of a matrimonial lump sum order is not provable in a bankruptcy. . .
Cited – Gita Ram v Baskinder Ram,Solinder Ram, Monder Ram and Maurice William Russell CA 5-Nov-2004
A bankrupt had, before his bankruptcy disposed of his share in a house at an undervalue. His wife appealed an order that the share disposed of should vest entirely in the trustee in bankruptcy. Matrimonial proceedings had also been commenced.
Cited – McRoberts v McRoberts ChD 1-Nov-2012
The parties had agreed to an ancillary relief order on their divorce. The husband was made bankrupt without having paid the lump sum agreed. The former wife and now claimant had received no dividend. Debts which were not provable in the bankruptcy . .
Lists of cited by and citing cases may be incomplete.

Family, Insolvency

Updated: 27 October 2022; Ref: scu.182273

Sargent v Commissioners of Customs and Excise: CA 23 Feb 1995

Property company receiver liable to pay VAT collected on rents to Commissioners.

Citations:

Times 23-Feb-1995, Ind Summary 01-May-1995

Jurisdiction:

England and Wales

Citing:

Appeal from – Sargent v Commissioners of Customs and Excise ChD 18-Nov-1993
VAT in rents received by receiver was payable to customs. The receiver is a VAT taxable person even if he is appointed under a floating charge. . .
Lists of cited by and citing cases may be incomplete.

VAT, VAT, Landlord and tenant, Insolvency

Updated: 27 October 2022; Ref: scu.89008

Thorne v Silverleaf: CA 1994

Peter Gibson LJ said: ‘In s.217(1)(b) knowledge that it is a crime is required.’

Judges:

Peter Gibson LJ, Ralph Gibson LJ

Citations:

[1994] 1 BCLC 637

Statutes:

Insolvency Act 1986 217

Jurisdiction:

England and Wales

Cited by:

Cited – It’s A Wrap (UK) Ltd v Gula and Another ChD 16-Sep-2005
The defendant company directors were accused of having paid dividends to themselves when the company was in fact making a loss.
Held: A claim might lie, but the pleadings did not phrase it adequately, and an amendment would be improper. Though . .
Cited – It’s A Wrap (UK) Ltd v Gula and Another CA 11-May-2006
The company was said to have paid dividends unlawfully, in that the directors who were the shareholders had paid themselves dividends knowing that the company had not earned enough to pay them.
Held: Where shareholders had knowledge of the . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 27 October 2022; Ref: scu.230899

Woodley v Woodley (2): CA 12 Apr 1993

A stay of execution of an order against matrimonial assets was not defeated by bankruptcy. As to the interplay of the Insolvency Rules and matrimonial proceedings.
Balcombe LJ said: ‘I cannot leave this case without saying something about the effect of r 12.3 of the Insolvency Rules 1986. Before those rules came into force orders for periodical payments were not provable in bankruptcy . . whereas an order for a lump sum was provable . . That position is understandable. However r 12.3(2)(a), by making any obligation arising under an order made in family proceedings, ie including a lump sum order, not provable, has changed that position. Whether it was the intention of those who drafted the 1986 rules to bring about this change I know not. It may be that it was considered that as a debt arising from an order made in family proceedings is not released upon the discharge of the bankrupt (s 281(5) (a) of the 1986 Act) therefore it should not be provable. However there is no necessary or logical link between the provability of a debt and its release on discharge. In some cases there is such a link see, eg a fine imposed for an offence which is not provable under r 12.3(2)(a) and is not released on discharge under s 281(4). On the other hand a liability to pay damages in respect of personal injuries is a provable debt in bankruptcy, not being the subject of any exclusion under r 12.3, but is not released on discharge: s 281(5)(a). It seems, therefore, that any link between provability and release on discharge is a matter of policy and I can see good policy grounds for saying that a lump sum order made in family proceedings should (like damages for personal injuries) be both provable in bankruptcy and yet not be released on discharge.
I invite the Insolvency Rules Committee to consider whether a lump sum order made in family proceedings should be provable in bankruptcy as it was before the 1986 rules came into force. If it were provable, then that would be the appropriate route for the creditor to follow, since the procedure by way of judgment summons would then be barred by s 285(3) of the 1986 Act (see Smith v Braintree DC [1990] 2 AC 215).’

Judges:

Balcombe LJ

Citations:

Ind Summary 12-Apr-1993, [1994] 1 WLR 1167

Statutes:

Debtors Act 1869 5, Insolvency Rules 1986

Jurisdiction:

England and Wales

Cited by:

Cited – Gita Ram v Baskinder Ram,Solinder Ram, Monder Ram and Maurice William Russell CA 5-Nov-2004
A bankrupt had, before his bankruptcy disposed of his share in a house at an undervalue. His wife appealed an order that the share disposed of should vest entirely in the trustee in bankruptcy. Matrimonial proceedings had also been commenced.
Cited – In re Mordant CA 1996
The court discussed the interplay of family and insolvency proceedings: ‘Since the wife is unable to prove in the husband’s bankruptcy, the position . . is that the husband’s trustee must use the andpound;385,000 in paying the trustee’s expenses . .
Cited – McRoberts v McRoberts ChD 1-Nov-2012
The parties had agreed to an ancillary relief order on their divorce. The husband was made bankrupt without having paid the lump sum agreed. The former wife and now claimant had received no dividend. Debts which were not provable in the bankruptcy . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Family

Updated: 26 October 2022; Ref: scu.90593

Powdrill and Another v Watson and Another: CA 1 Mar 1994

The administrators of a company are deemed to have accepted the employees who had been kept on after 14 days. A letter from them denying that they would accept them as employees, was insufficient to prevent adoption of the contracts.

Citations:

Independent 22-Mar-1994, Gazette 08-Jun-1994, Gazette 20-Apr-1994, Times 01-Mar-1994, Ind Summary 14-Mar-1994

Statutes:

Insolvency Act 1986 19(5) 27

Jurisdiction:

England and Wales

Citing:

Appealed to – Powdrill and Another v Watson and Another HL 23-Mar-1995
A receiver of a companies assets, who employed former staff of the company, beyond an initial period of 14 days, becomes personally responsible for their employment contracts, and consequently becomes liable for making redundancy payments. The 1870 . .

Cited by:

Appeal from – Powdrill and Another v Watson and Another HL 23-Mar-1995
A receiver of a companies assets, who employed former staff of the company, beyond an initial period of 14 days, becomes personally responsible for their employment contracts, and consequently becomes liable for making redundancy payments. The 1870 . .
Lists of cited by and citing cases may be incomplete.

Employment, Insolvency

Updated: 26 October 2022; Ref: scu.84825

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 provided for payment of book debts. However ‘Just as it is open to contracting parties to provide for a fixed charge on future book debts, so it is open to them to provide that they shall be subject to a fixed charge while they are uncollected and a floating charge on realisation. No authority to the contrary has been cited and, the principle being as spacious as it has been expressed to be, no objection is on that account sustainable. For these reasons, I would accept [Counsel’s] second main submission and hold that the charge over book debts of the company, as created by the debenture, was, unless and until their proceeds were paid into the specified account, a valid fixed charge.’

Judges:

Nourse LJ, Russell LJ and Scott Baker J

Citations:

Times 12-Jan-1994, Ind Summary 17-Jan-1994, [1994] 1 BCLC 449

Jurisdiction:

England and Wales

Citing:

Appeal from – 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. . .
Applied – Siebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .

Cited by:

Reversed – Agnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle PC 5-Jun-2001
(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver . .
Appealed to – Re: New Bullas Trading Ltd ChD 5-Apr-1993
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge. . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
Cited – National Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Company, Banking, Insolvency

Updated: 26 October 2022; Ref: scu.82072

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 accordingly subsequent events were not an absolute bar against setting aside the sale. Nourse LJ: ‘The object of ss 423 to 425 being to remedy the avoidance of debts, the ‘and’ between para (a) and (b) of 423(2) must be read conjunctively and not disjunctively. Any order under this section must seek, so far as practicable, both to restore the position to what it would have been if the transaction had not been entered into and to protect the victims of it. It is not a power to restore generally, but in such a way as to protect the victims’ interests; in other words, by restoring assets to the debtor to make them available for execution by the victims. So the first question the judge must ask himself is what assets have been lost to the debtor. His order should, so far as practicable, restore that loss.’

Judges:

Nourse LJ

Citations:

Ind Summary 27-Dec-1993, [1994] 1 BCLC 706

Statutes:

Insolvency Act 1986 238(3) 423

Jurisdiction:

England and Wales

Citing:

Appeal from – 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 . .

Cited by:

Applied – Walker v WA Personnel Ltd 2002
The assets of group of companies were sold, and it then went into insolvent liquidation. The liquidator claimed that the sale was at an undervalue, and appliied to continue an interlocutory injunction.
Held: There was a triable issue as to . .
Cited – Ramlort Ltd v Michael James Meston Reid CA 8-Jul-2004
The company sought to claim under a life policy. The deceased had died in Scotland insolvent. The trustee of the policy had declared that he held it on trust for the claimant, but the defendant, the judicial factor of the estate, said the . .
Cited – Gita Ram v Baskinder Ram,Solinder Ram, Monder Ram and Maurice William Russell CA 5-Nov-2004
A bankrupt had, before his bankruptcy disposed of his share in a house at an undervalue. His wife appealed an order that the share disposed of should vest entirely in the trustee in bankruptcy. Matrimonial proceedings had also been commenced.
Cited – Feakins and Another v Department for Environment Food and Rural Affairs (Civ 1513) CA 9-Dec-2005
The department complained that the defendants had entered into a transaction with their farm at an undervalue so as to defeat its claim for recovery of sums due. The transaction used the grant of a tenancy by the first chargee.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 26 October 2022; Ref: scu.79107

Henderson v 3052775 Nova Scotia Ltd: HL 10 May 2006

The liquidator had sought to set aside a transfer of company property as having been made at an undervalue. The defence was that the buyer had assumed some of the company’s debt in addition, and in effect that it was a preference on other creditors. The court had then issued an interlocutor in effect debarring the defence as ineffective. The company now appealed against that interlocutor.
Held: ‘the rule [2.2] envisages that the court may look beyond the pleadings and consider what, in substance, each of the parties and, more particularly, the defender is saying. It is this power which allows the court to deal with a party who tries to use his written pleadings not to present a real defence but to throw up a smokescreen of supposed fact behind which he can delay the progress of an action, or part of an action, which he is bound to lose. ‘ and ‘considering a motion for summary decree is entitled to proceed not merely on what is said in the defences, but on the basis of any facts which can be clarified, from documents, articles and affidavits, without trespassing on the role of the proof judge in resolving factual disputes after hearing the evidence. The judge can grant summary decree if he is satisfied, first, that there is no issue raised by the defender which can be properly resolved only at proof and, secondly, that, on the facts which have been clarified in this way, the defender has no defence to all, or any part, of the action. ‘ Nevertheless, on th epapers before the court it was quite impossible to say that the defence must fail.

Judges:

Lord Bingham of Cornhill, Lord Hoffmann, Lord Hope of Craighead, Lord Rodger of Earlsferry, Lord Mance

Citations:

[2006] UKHL 21, 2006 SCLR 626

Links:

Bailii

Statutes:

Insolvency Act 1986 21.2, Rules of the Court of Session 21.2

Jurisdiction:

England and Wales

Citing:

Appeal from – Henderson v 3052775 Nova Scotia Limited IHCS 18-Feb-2005
. .
See Also – Henderson CA (the Liquidator of Letham Grange Development Co Ltd) v 3052772 Nova Scotia Limited OHCS 9-Dec-2003
. .
See Also – Mathew Purdon Henderson ( Liquidator of Letham Grange Development Co Ltd) v 3052775 Nova Scotia Ltd OHCS 21-Apr-2004
. .
Cited – Jamieson v Jamieson HL 1952
The house discussed the test for relevancy of a pursuer’s averments.
Held: A case should only be dismissed on grounds of relevancy and specification if it would necessarily fail at proof.
The House reversed the decision of the Court of . .
Cited – Frew v Field Packaging Scotland Ltd 1994
Rule 21.2(4) gives the court a power to grant the motion, but does not require it to do so where it would not be appropriate in all the circumstances . .
Cited – P and M Sinclair v The Bamber Gray Partnership 1987
A motion for summary decree is not intended to replace a hearing on the procedure roll which is designed for the disposal of legal questions requiring more detailed and extensive legal debate. . .
Cited – Keppie v The Marshall Food Group Ltd 1997
In a motion for summary decree, ‘The court is not concerned with forecasting the outcome of a proof.’ . .
Cited – Three Rivers District Council and Others v Governor and Company of The Bank of England (No 3) HL 22-Mar-2001
Misfeasance in Public Office – Recklessness
The bank sought to strike out the claim alleging misfeasance in public office in having failed to regulate the failed bank, BCCI.
Held: Misfeasance in public office might occur not only when a company officer acted to injure a party, but also . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Scotland, Litigation Practice

Updated: 25 October 2022; Ref: scu.241620

Regina v McCredie; Regina v French: CACD 5 Oct 1999

The duty on company officers to disclose assets to the liquidator went beyond a duty to respond to requests, and created a positive duty to inform him of assets. Nor was the obligation to deliver up a once off event, but it was a duty continuing from time to time during the insolvency.

Citations:

Times 05-Oct-1999

Statutes:

Insolvency Act 1986 208 (1)

Jurisdiction:

England and Wales

Insolvency

Updated: 25 October 2022; Ref: scu.87305

Regina v Brockley: CACD 25 Nov 1993

The offence of acting as a company director whilst being an undischarged bankrupt is an absolute offence.

Citations:

Gazette 26-Jan-1994, Times 25-Nov-1993, [1994] 99 Cr App R 385

Statutes:

Company Directors Disqualification Act 1986 11(1)

Jurisdiction:

England and Wales

Cited by:

Cited – Regina v Doring CACD 24-Jun-2002
The defendant was charged with acting as a company director whilst being an undischarged bankrupt, and also of being involved in the management of a company using a prohibited name. She said that she had not known that the part she took in the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Crime

Updated: 25 October 2022; Ref: scu.86229

In Re Inside Sport Ltd: CACD 27 Nov 1998

Where a dispute arose as to the identity of a voluntary liquidator, the parties should resolve the dispute by an application to the court for the appointment of a voluntary liquidator. It was wrong to seek instead the compulsory winding up of the company.

Citations:

Times 27-Nov-1998

Statutes:

Insolvency Act 1986 171

Jurisdiction:

England and Wales

Insolvency

Updated: 25 October 2022; Ref: scu.81945

Blight and Others v Brewster: ChD 9 Feb 2012

A judgment creditor, applied for an order requiring Mr Brewster, his judgment debtor, to elect to draw down a lump sum from his pension in order to enable the judgment creditor to obtain a third party debt order against the pension trustees.
Held: Mr Moss granted an injunction under section 37(1) of the 1981 Act compelling Mr Brewster to delegate to the judgment creditor’s solicitor the power to elect to receive 25% of his pension as a lump sum, up to the amount needed to pay the balance of the judgment debt. ‘There appears to me to be a strong principle and policy of justice to the effect that non-bankrupt debtors should not be allowed to hide their assets in pension funds when they had a right to withdraw moneys needed to pay their creditors.’

Judges:

G Moss QC

Citations:

[2012] EWHC 165 (Ch), [2012] BPIR 476, [2012] Pens LR 203, [2012] WLR(D) 26, [2012] 1 WLR 2841

Links:

Bailii, WLRD

Statutes:

Senior Courts Act 1981 37(1)

Jurisdiction:

England and Wales

Cited by:

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

Insolvency

Updated: 23 October 2022; Ref: scu.451846

Munro and Others v Rothfield: HL 28 Jun 1920

A debtor arranged with a particular creditor for payment of his debt in certain instalments if a general scheme to which the particular creditor would be a party were carried through; that arrangement conferred a privilege on the particular creditor over the other creditors to the proposed general scheme; the general scheme was agreed to; the particular creditor obtained in absence a decree on his debt acting on his particular agreement; the creditors of the general scheme suspended. Held ( aff. judgment of First Division) that the general scheme was only voidable not void, the arrangement with the particular creditor void as fraudulent, or superseded.

Judges:

Viscount Haldane, Viscount Finlay, Viscount Cave, Lord Dunedin and Lord Shaw

Citations:

[1920] UKHL 501, 57 SLR 501

Links:

Bailii

Jurisdiction:

Scotland

Contract, Insolvency

Updated: 22 October 2022; Ref: scu.631534

Re JN 2 Ltd: ChD 1978

The court will require any dispute as to the status or locus standi of a party to be resolved in separate proceedings before a winding-up petition is heard. The Court highlighted the extent and applicability of Section 224(1) of the 1948 Act, observing: ‘There seems to be no doubt that entry on the register is an essential qualification for a contributory who desires to present a petition, if he is not the original allottee and if the shares have not devolved on him through the death of a former holder;
for if neither condition is satisfied, section 224(1)(a)(ii) requires that the shares must have been held by him and registered in his name for at least six months during the preceding 18 months. Plainly, if a transferee is not and never has been on the register, he cannot satisfy that condition. And it would not seem to be an answer that he ought to have been on the register, unless, perhaps, the company has been ordered to place him on the register and has disobeyed that order.’

Judges:

Brightman J

Citations:

[1978] 1 WLR 183, [1977] 3 All ER 1104

Statutes:

Companies Act 1948 224(1)

Jurisdiction:

England and Wales

Cited by:

Cited – Alipour v Ary and Schweininger CA 17-Dec-1996
The petitioner appealed against rejection of his contributor’s winding up petition.
Held: The Companies court was the appropriate place to determine a dispute on winding up petition. A dispute on locus standi can be dealt with in the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 21 October 2022; Ref: scu.428281

Stanley and Another (As The Joint Liquidators of New Grass of Manchester Ltd) v TMK Finance Ltd and Another: ChD 21 Dec 2010

The liquidators sought relief saying that the company had sold its principle capital asset at an undervalue to its parent company.

Judges:

Richards J

Citations:

[2010] EWHC 3349 (Ch), [2011] BPIR 876, [2011] Bus LR D93

Links:

Bailii

Statutes:

Insolvency Act 1986 238 241

Jurisdiction:

England and Wales

Insolvency

Updated: 21 October 2022; Ref: scu.427408

4Eng Ltd v Harper and Others: ChD 26 Oct 2009

The claimant sought to set aside transactions entered into by the defendants which, it said were intended fraudulently to defeat claims by their creditors.
Held: When considering the extent of recovery available under the sections of the 1986 Act, the court should consider general principles applicable in all areas of law. The Act did not require any particular mental state in a recipient of assets to such an application. The orders were granted against the transferees.

Judges:

Sales J

Citations:

Times 06-Nov-2009, [2009] EWHC 2633 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986 423

Jurisdiction:

England and Wales

Litigation Practice, Insolvency

Updated: 19 October 2022; Ref: scu.377211

Somerfield Stores Ltd v Spring (Sutton Coldfield) Ltd: ChD 12 Jun 2009

Application for leave to continue request for new lease on insolvency of the landlord. The administrators opposed wanting to put together a scheme for the redevelopment of the premises.
Held: Permission was granted.

Judges:

Judge Purle QC

Citations:

[2009] EWHC 2384 (Ch), [2010] L and TR 8, [2009] 48 EG 104

Links:

Bailii

Statutes:

Landlord and Tenant Act 1954

Jurisdiction:

England and Wales

Landlord and Tenant, Insolvency

Updated: 19 October 2022; Ref: scu.375617

Gibson Dunn and Crutcher and Another. v Rio Properties Inc.: CA 29 Jul 2004

The court asked whether it is proper for the court, while a bankruptcy petition is pending, to appoint someone other than the official receiver as interim receiver and manager of the debtor’s property.

Judges:

The Hon Mr Justice Laddie Lord Justice Parker

Citations:

[2004] EWCA Civ 998

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency

Updated: 17 October 2022; Ref: scu.199740

Ram v Ram and others: CA 16 Nov 2004

Citations:

[2004] EWCA Civ 1684, [2005] 2 FLR 63

Links:

Bailii

Statutes:

Insolvency Act 1986 423

Jurisdiction:

England and Wales

Cited by:

Cited – Her Majesty’s Attorney General v Akhter and Another CA 14-Feb-2020
Islamic Nikah Ceremony did not create a marriage
The parties had undertaken, in 1998, an Islamic marriage ceremony, a Nikah. They both knew at the time that to be effective in UK law, there would need to be a civil ceremony, and intended but did not achieve one. The parties having settled their . .
Lists of cited by and citing cases may be incomplete.

Family, Insolvency

Updated: 15 October 2022; Ref: scu.221008