Category: Insolvency

Scottish and Newcastle Ltd v Raguz: ChD 10 Jun 2010

The defendant sought permission to appeal against the order made on the application for his bankruptcy, saying that he wished to bring new evidence. He said that he had offered sufficient security for the debt and the court should adjourn the petition pending the sale of assets.

Judges:

Proudman J

Citations:

[2010] EWHC 1384 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

see also – Scottish and Newcastle Plc v Raguz HL 29-Oct-2008
The lease had been assigned by the claimant to the defendant and on again to a tenant who became insolvent. The landlord had recovered sums said to be due from the claimant who now sought an indemnity from the defendant. The defendant said that the . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 19 August 2022; Ref: scu.416603

Re Nortel Networks SA: ComC 20 May 2009

Application by the administrators of Nortel Networks SA first, for a direction that the administrators are at liberty to apply to the commercial court at Versailles, France pursuant to Article 29A of the EC Regulation of Insolvency Proceedings 2000 for the opening of secondary insolvency proceedings in respect of the Company; second, that the administrators be at liberty to enter into a Protocol with the relevant Administrator appointed by the Commercial Court in any such secondary proceedings opened in respect of the Company. Third, a declaration is sought following the opening of the secondary proceedings that the administrators may be at liberty to apply from time to time such of the assets that is currently under their control to the French liquidators, subject to certain conditions particularly designed to ensure that the assets are properly applied commensurate with the duties of the administrators under English law that the payment of such assets should be subject to a proviso that the Commercial Court makes a full and binding order that the current and future administration expenses arising from administration shall be paid from the assets of the Company situated in the French administration together with all debts, claims, liabilities and expenses payable or arising under or in connection with secondary proceedings, or are otherwise adequately secured for.

Judges:

Kaye QC HHJ

Citations:

[2009] EWHC 1482 (Comm)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, European

Updated: 19 August 2022; Ref: scu.416213

Post Office v Norwich Union Fire Insurance Society Ltd: CA 1967

A contract of insurance provided an indemnity for ‘all sums which the insured shall become legally liable to pay as compensation in respect of loss of property’. The claim was by the Post Office against a contractor, Potters, for damaging one of their cables which in consequence the Post Office had to repair. Before the Post Office had sued Potters, Potters went into liquidation. The Post Office sued the insurance company direct purporting to make use of the 1930 Act, but before the Post Office’s claim against Potters had been the subject of adjudication or agreement.
Held: A third party claimant could not sue the insurer directly, pursuant to the 1930 Act, until the existence and amount of the liability of the insured had been established by judgment or award or agreement. The reason for this was that the rights transferred by the Act were subject to the terms of the policy. Since the insured could not have claimed an indemnity until their liability had been established, the Post Office could be in no better position. The insurers’ argument that the Post Office had no cause of action against the insurers until the establishment of the existence and amount of the liability of the insured was therefore accepted. Though leave was necessary to begin or continue proceedings against a company in liquidation, the court considered that leave ought to be given automatically if the 1930 Act were applicable.
Lord Denning MR said: ‘It seems to me that the insured only acquires a right to sue for the money when the liability to the injured person has been established so as to give rise to a right of indemnity. His liability to the injured person must be ascertained and determined to exist, either by judgment of the court or by award in arbitration or by agreement. Until that is done the right to an indemnity does not arise.’
The liability must be ‘ascertained and determined to exist’, and that this may be achieved by judgment, arbitration award or agreement: ‘In these circumstances I think the right to sue for these moneys does not arise until the liability of the wrongdoer is established and the amount ascertained. How is this to be done? If there is an unascertained claim for damages in tort, it cannot be proved in the bankruptcy; nor in the liquidation of the company. But nevertheless the injured person can bring an action against the wrongdoer. ‘
Salmon LJ said that when the liability is established, it dates from the date when the cause of action arose: ‘The case really resolves itself into this simple question: Could Potters on June 17, 1965, have successfully sued their insurers for the sum of andpound;839 10s 3d which they were denying they were under any obligation to pay the Post Office? Stated in that way, I should have thought the question admits of only one answer. Obviously Potters could not have claimed that money from their insurers. It is quite true that if Potters in the end are shown to have been legally liable for the damage resulting from the accident to the cable, their liability in law dates from the moment when the accident occurred and the damage was suffered. But whether or not there is any legal liability and, if so, the amount due from the Potters to the Post Office can, in my view, only be finally ascertained either by agreement between Potters and the Post Office or by an action or arbitration between Potters and the Post Office. ‘

Judges:

Lord Denning MR, Salmon LJ

Citations:

[1967] 2 QB 363, [1967] 1 Lloyds Rep 216

Statutes:

Third Parties (Rights Against Insurers) Act 1930

Jurisdiction:

England and Wales

Citing:

Approved – West Wake Price and Co v Ching 1957
A clerk employed by a firm of accountants defrauded two of the firm’s clients of andpound;20,000 over a period of about three years.
Held: One can not ‘pay’ a cause of action.
Devlin J said: ‘I think that the primary meaning of the word . .

Cited by:

Cited – First National Tricity Finance Ltd v OT Computers Ltd; In re OT Computers Ltd (in administration) CA 25-May-2004
The company had gone into liquidation. They had sold consumer policies as extended warranties on behalf of the claimant. The company had insured its own joint liability under the contracts, and the claimant sought information from the company’s . .
Mentioned – Aer Lingus v Gildacroft Ltd and Another CA 17-Jan-2006
The claimant had been found liable to pay damages for personal injury, and now sought contribution from the defendants. The defendants said that they were out of time since the contribution action had been commenced more than 2 years after the . .
Cited – Law Society of England and Wales and others v Shah and others ChD 30-Nov-2007
Solicitor firms had been made bankrupt leaving a shortfall after thefts from client accounts of over 12 million pounds. The thief had diappeared, and the other partners were now discharged form bankruptcy. The Law Society accepted that it could not . .
Attacked – Bradley v Eagle Star Insurance Co Ltd HL 1989
Mrs Bradley was employed by Dart Mill several times from 1933 and 1970 and acquired byssinosis from inhaling cotton dust. The company was wound up in 1975 and dissolved in 1976. In 1984 she applied to the court for pre-action disclosure under . .
Cited – Teal Assurance Company Ltd v WR Berkley Insurance (Europe) Ltd SC 31-Jul-2013
An international engineering company had several layers of professional indemnity insurance. The top later did not cover claims originating in the US or Canada. The several insurers now disputed apportionment of liability between them. The . .
Lists of cited by and citing cases may be incomplete.

Insurance, Insolvency

Leading Case

Updated: 19 August 2022; Ref: scu.198401

Re Citro, Lloyds Bank plc v Byrne and Byrne, Abbey National plc v Moss and others and Barclays Bank plc v Hendricks: CA 1991

Trustees in bankruptcy of bankrupt husbands successfully appealed for the removal of provisos delaying the operation of orders for sale made under s30 in respect of each husband’s matrimonial home for the benefit of that husband’s wife who had been declared by the judge at first instance to be an equal owner with the husband of the beneficial interest in the matrimonial home. Bingham LJ: ‘Section 30 of the Law of Property Act 1925 confers two discretion’s. First, it confers a discretion on ‘any person interested’ to ‘apply to the court …. for an order directing the trustees for sale to give effect thereto.’ Secondly, it confers a discretion on the court to ‘make such order as it thinks fit’. The section contains no express limitation on the exercise of these discretions but neither is it altogether unfettered.’ The interests of a bankrupt spouse’s creditors would, absent exceptional circumstances, usually prevail over those of the other spouse and children. Accordingly it reduced to six months the period of postponement of the order for sale of the property made by the judge below.
Nourse LJ: ‘One of the consequences of the 1925 Property Legislation is that the legal estate in any property which is beneficially owned jointly or in common is necessarily held on trust for sale and is thus subject to the jurisdiction of the court under s. 30. From its inception the section was one of wide application. But is seems that before Jones -v- Challenger [above] it had not been the means of making an order for the sale of a former matrimonial home ….’ and as to what counted as exceptional circumstances: ‘ What then are exceptional circumstances? As the cases show, it is not uncommon for a wife with young children to be faced with eviction in circumstances where the realization of her beneficial interest will not produce enough to buy a comparable house in the same neighbourhood or indeed elsewhere. And, if she has to move elsewhere, there may be problems over schooling and so forth. Such circumstances, while engendering a natural sympathy in all who hear of them, cannot be described as exceptional. They are the melancholy consequences of debt and improvidence with which every civilised society has been familiar.’

Judges:

Bingham LJ, Nourse LJ

Citations:

[1991] 1 FLR 71, [1991] Ch 142, (1991) 23 HLR 472

Statutes:

Law of Property Act 1925 30

Jurisdiction:

England and Wales

Cited by:

Cited – Bank of Baroda v Dhillon and Dhillon CA 17-Oct-1997
A property had been bought in the husband’s name. The wife made financial contributions to repayment of the charge, and thereby acquired an interest in it. The property was later charged by the paper owner to the claimant, who sought possession . .
Cited – Donohoe v Ingram ChD 20-Jan-2006
The appellant had lived with the bankrupt for several years, and sought an order delayng sale of the house they had lived in until their children had grown up. She said the circumstances were exceptional.
Held: The fact that the delay might . .
Cited – Barca v Mears ChD 2005
While the categories of exceptional case which might allow delay in the sale of a bankrupt’s property are not circumscribed by the previous case-law, the only cases subsequent to In Re Citro in which orders for possession and sale have been withheld . .
Cited – Nicholls v Lan and Another ChD 26-May-2006
The bankrupt had been discharged from his bankruptcy, but his share in the family home remained vested in the trustee who applied for the sale of the home. His wife applied to set aside an order for sale on the basis that it interfered with her . .
Cited – Gotham v Doodes CA 25-Jul-2006
The former bankrupt resisted sale of his property by the trustee, saying that enforcement was barred by limitation. He and his wife bought the property in early 1988, and he was made bankrupt in October 1988. He was dischaged from bankruptcy in . .
Lists of cited by and citing cases may be incomplete.

Land, Insolvency

Updated: 19 August 2022; Ref: scu.197883

In re Fenton: CA 1931

A surety under a pre-insolvency guarantee, had not actually paid, and could not pay, being bankrupt with his assets vested in the trustee. The creditor was still owed the money and entitled to prove in the liquidation.
Held: One could not have more than one proof in respect of the same debt (‘the rule against double proof’); otherwise, if there had been, say, four guarantors, there could have been five people receiving dividends on the same debt. Also. until the creditor had been paid, he had the superior right of proof and a proof by a surety was excluded. Lastly, a debt which could not be proved could not be relied upon for set-off. If the guarantor had paid off the debt after the insolvency date, he would have been entitled to set it off against a debt which he owed to the company.

Judges:

Lord Hanworth MR, Lawrence and Romer LJJ

Citations:

[1931] 1 Ch 85

Jurisdiction:

England and Wales

Cited by:

Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Not followed – In re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .
Cited – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 19 August 2022; Ref: scu.196879

Everitt v Budhram and Another: ChD 20 May 2009

The trustee in bankruptcy appealed against rejection of his claim for the sale of the home in which the bankrupts each held a one half share. The bankruptcies arose from non payment of council tax. The principle sums had been repaid, and the outstanding matters were the trustee’s costs. The bankrupts had not co-operated, and the normal automatic discharge had been suspended. The only substantial asset was the family home which had sufficient equity. The bankrupt and his wife both faced serious medical issues, and the husband lacked capacity. The District judge had made adverse comments about costs being unnecessarily accrued by the methods of enforcement chosen by Oxford City Council.
Held: The district judge should not have gone behind the making of the bankruptcy order. An order was made for the sale subject to a delay of one year to allow the bankrupts opportunity to manage their affairs.
. A bankrupt’s needs will include his financial, medical, emotional and mental requirements. The definition had not previously been tested in the courts. The judge may have fallen into error when placing such weight on the medical needs of the person living with the bankrupt.

Judges:

Henderson J

Citations:

Times 14-Jul-2009, [2009] EWHC 1219 (Ch), [2010] BPIR 567, [2010] Ch 170, [2010] 2 WLR 637

Links:

Bailii

Statutes:

Trusts of Land and Appointment of Trustees Act 1996, Insolvency Act 1986 335A, Insolvency Act 1986

Jurisdiction:

England and Wales

Cited by:

Cited – Wright and Another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd ChD 6-Mar-2018
IVA is a special form of contract
Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Land, Insolvency, Rating

Updated: 18 August 2022; Ref: scu.416193

Qureshi v Association of Conservative Clubs Ltd (on Refusal of Permission To Appeal): ChD 9 May 2019

Reasons for refusal of leave to appeal.

Judges:

Sarah Worthington QC HHJ

Citations:

[2019] EWHC 1684 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Qureshi v Association of Conservative Clubs Ltd (on Costs) ChD 9-May-2019
. .
Lists of cited by and citing cases may be incomplete.

Insolvency, Litigation Practice

Updated: 18 August 2022; Ref: scu.640876

In re Kaupthing Singer and Friedlander Ltd: CA 11 May 2010

The court was asked as to the set-off, in a company administration, of future debts owed by the company to its creditors and by those creditors to the company, and whether the effect of those provisions was that, after the future debts were discounted to a present value for the purpose of set-off, leaving a balance due from the creditor to the company to be paid at the contractual date for repayment, the balance was to be paid in the discounted amount or alternatively in an equivalent undiscounted amount.

Judges:

Mummery, Hughes, Etherton LJJ

Citations:

[2010] EWCA Civ 518, [2010] BPIR 839, [2010] Bus LR 1500

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

Appeal From – In re Kaupthing Singer and Friedlander Ltd ChD 2-Oct-2009
. .
Cited – Cherry v Boultbee CA 6-Apr-1838
TB was indebted to CB, his sister, in the sum of andpound;1878. He became bankrupt, and shortly after his bankruptcy C B made her will, giving legacies of andpound;500 and andpound;2,000 to her executors, in trust to pay the interest thereof (as to . .
Cited – In re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .

Cited by:

See Also – Brazzill and Others v Willoughby and Others CA 27-May-2010
The regulated bank Kaupthing Singer and Friedlander Ltd (KSF) was in financial difficulties. The Bank of England required KSF to credit to a trust account all future deposits. KSF later went into insolvency. Some deposits had been credited to the . .
See Also – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Financial Services

Updated: 17 August 2022; Ref: scu.414592

Soutzos v Asombang and Others: ChD 23 Apr 2010

The claimant had lent substantial sums to the defendant. The defendant had subsequently been made bankrupt, and now said he was released from the debt.

Judges:

Newey J

Citations:

[2010] EWHC 842 (Ch), [2010] BPIR 960

Links:

Bailii

Statutes:

Insolvency Act 1986 281

Jurisdiction:

England and Wales

Cited by:

See Also – Soutzos v Asombang and Others ChD 21-Jun-2011
The claimant had obtained a freezing order against the defendants. His claim having been dismissed, the court now considered if and what damages should be paid under the cross-undertaking he had given.
Held: Setting out and applying the . .
Lists of cited by and citing cases may be incomplete.

Contract, Insolvency

Updated: 17 August 2022; Ref: scu.408673

In re Rottmann (a Bankrupt): ChD 20 May 2008

The subject of the bankruptcy proceedings asked that the petition be heard in private so as not to prejudice pending criminal proceedings in a foreign jurisdiction.
Held: The bankrupt would be required to answer questions which might be self incriminating. The court had power to hear the matter in private, and would do so, but the examination would be face to face, and would be not be adjourned.

Judges:

Judge Kaye, QC

Citations:

Times 16-Jul-2008, [2009] Bus LR 284, [2008] EWHC 1794 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986 290, Insolvency Rules 1986 (SI 1986 No 1925) 6.175

Jurisdiction:

England and Wales

Cited by:

Appeal from – Rottmann v Brittain CA 12-Nov-2008
The applicant sought leave to appeal against a refusal to adjourn his examination in bankruptcy fearing that the contents would become public prejudicing his criminal trial abroad. The court had allowed a private examination, but he felt this was . .
At first instance – In re Rottmann (a Bankrupt) CA 18-Mar-2009
The bankrupt renewed his request for permission to appeal against a refusal to adjourn his public examination in bankruptcy. The court had allowed a private examination so as not to prejudice pending criminal proceedings in Germany.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 16 August 2022; Ref: scu.279113

HM Customs and Excise v Jack Baars Wholesale, Baars, and Baars: CmpC 16 Jan 2004

Judges:

Mr Justice Lindsay

Citations:

[2004] EWHC 18 (Ch), [2004] BPIR 543

Links:

Bailii

Statutes:

Insolvent Partnerships Order 1994

Jurisdiction:

England and Wales

Cited by:

Cited – Re Autotech Design Ltd, HMRC v Autotech Design Ltd ChD 2006
Michael Briggs QC summarised the approach to be adopted by the court at the hearing of for the appointment of an interim liquidator pending the hearing of an insolvency petition brought by the Revenue: ‘Although the formulations of the approach to . .
Cited – Revenue and Customs v SED Essex Ltd ChD 14-Jun-2013
Liquidator confirmed despite VAT challege
The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Customs and Excise

Updated: 16 August 2022; Ref: scu.192053

Goldacre (Offices) Ltd v Nortel Networks UK Ltd: ChD 7 Dec 2009

The court was asked whether rents under leases held by the company had become expenses in the administration.

Judges:

Purle QC J

Citations:

[2009] EWHC 3389 (Ch)

Links:

Bailii

Statutes:

Law of Distress Amendment Act 1908 6

Jurisdiction:

England and Wales

Citing:

No Longer Good law – Shackell v Chorlton 1895
. .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Insolvency

Updated: 14 August 2022; Ref: scu.401897

Re Kaupthing Singer and Friedlander Ltd: ChD 19 Feb 2010

Judges:

Blair J

Citations:

[2010] EWHC 316 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

Binding – In re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 14 August 2022; Ref: scu.401666

Byers and Others (Liquidators of Madoff Securities International Ltd) v Yacht Bull Corporation and Another: ChD 1 Feb 2010

The claimants asked the court to exercise jurisdiction over a yacht purchased by the defendant company incorporated and domiciled in France with money from the insolvent company.
Held: The court did not have jurisdiction. Article 2 of the regulation applied so as to require the matter to go before the courts in France. The exception in article 1(2)(b) did not apply so as to exclude application of the regulation.

Judges:

Sir Andrew Morritt, Chancellor

Citations:

[2010] BCC 368, [2010] ILPr 24, [2010] EWHC 133 (Ch), Times 15-Feb-2010, [2010] WLR (D) 18

Links:

Bailii, WLRD

Statutes:

Council Regulation (EC) No 44/2001 of December 22, 2000

Jurisdiction:

England and Wales

Jurisdiction, Insolvency

Updated: 14 August 2022; Ref: scu.396744

Garrow v Society of Lloyd’s: ChD 18 Jun 1999

Lloyds sought to claim against the Names on a ‘pay now, sue later’ clause.
Held: The power to order a stay of execution for possession remained and could be exercised in an appropriate case even though a cross-claim under which it was requested, could have been raised at an earlier stage in the proceedings. There was no hard rule of law to prevent such a request.
Jacob J said: ‘The other point urged upon me was the ‘pay now sue later’ clause. Mr Garrow had agreed that if he was to bring a cross claim he would nonetheless pay the claim at once. This is of course true, and if he had the means then I have no doubt that he should be made to do so. But I am concerned with whether the draconian effect of the bankruptcy should be imposed when he may have a perfectly good cross claim. It seems to me that this would be disproportionate, given the fact that with the Commercial Court decision likely soon, there is no tangible benefit to be had.’

Judges:

Jacob J

Citations:

Times 18-Jun-1999, [1999] BPIR 668

Jurisdiction:

England and Wales

Cited by:

Appeal from – Garrow v Society of Lloyd’s CA 28-Oct-1999
A proper counterclaim against Lloyd’s of London for fraudulent misrepresentation with an amount at stake equal to the amount claimed was a proper basis for setting aside a statutory demand for a sum due to Lloyd’s, despite the existence of a deed . .
Cited – Remblance v Octagon Assets Ltd CA 17-Jun-2009
A statutory demand was served against the guarantor of the lease after rent arrears arose. He applied for the demand to be set aside, and now appealed against its refusal. He said that the court would have set aside such a demand against the tenant, . .
Lists of cited by and citing cases may be incomplete.

Land, Insolvency

Updated: 14 August 2022; Ref: scu.80759

Jack and Another (London Scottish Finance Ltd) v Craig and Others: ChD 17 Dec 2013

Application by the joint administrators of LSF for directions arising out of loan agreements made or acquired by LSF before the administration began, under which secured loans were made to consumers but which were unenforceable because they contravened provisions of the Consumer Credit Act 1974.
Held: The phrase ‘realisation of the security’ in section 106, is to be interpreted conventionally to achieve the policy objective (section 113) that the security provided under the regulated agreement could not be enforced so as to benefit the creditor to any greater extent than would be the case if the security were not provided. In a secured loan to which section 106(d) applied, the provisions did not catch all sums paid by the debtor in discharge of the loan.

Judges:

Sir Terence Etherton Ch

Citations:

[2013] EWHC 4047 (Ch), [2013] WLR(D) 498, [2014] Bus LR 424, [2013] CTLC 231

Links:

Bailii, WLRD

Statutes:

Insolvency Act 1986, Consumer Credit Act 1974 106(d)

Jurisdiction:

England and Wales

Insolvency, Consumer, Banking

Updated: 14 August 2022; Ref: scu.519223

Re Storm Funding Ltd: ChD 18 Dec 2013

‘The administrators of 14 companies in the Lehman Brothers group apply for directions as to the potential liabilities of those companies to make payments to or for the benefit of the Lehman Brothers Pension Scheme (the scheme) established principally for the benefit of persons employed by Lehman Brothers Limited (LBL) but seconded to work for other group companies. ‘

Judges:

David Richards J

Citations:

[2013] EWHC 4019 (Ch), [2014] Bus LR 454, [2014] Pens LR 73, [2013] WLR(D) 502

Links:

Bailii, WLRD

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Insolvency

Updated: 14 August 2022; Ref: scu.519226

Gye v McIntyre: 1 Mar 1991

High Court of Australia – Bankruptcy – Proof of debts – Set-off – Mutual dealings – Composition with creditors – Person claiming to prove debt

Judges:

Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ

Citations:

[1991] HCA 60, (1991) 171 CLR 609

Links:

Austlii

Jurisdiction:

Australia

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 11 August 2022; Ref: scu.641434

Lehman Brothers International (Europe) v CRC Credit Fund Ltd and Others: ChD 15 Dec 2009

Judges:

Briggs J

Citations:

[2009] EWHC 3228 (Ch), [2010] 2 BCLC 301

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See Also – Lehman Brothers International (Europe) v CRC Credit Fund Ltd and Others ChD 20-Jan-2010
. .
Appeal from – CRC Credit Fund Ltd and Others v GLG Investments Plc (Sub-Fund: European Equity Fund) and Others CA 2-Aug-2010
. .
At first instance – Lehman Brothers International (Europe), Re SC 29-Feb-2012
The court was asked to interpret the provisions as to ‘client money rules’ and ‘client money distribution rules’ in the FSA handbook, and to consider the consequences as to the applicable trusts. Substantial sums paid by clients to the bank before . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Financial Services

Updated: 11 August 2022; Ref: scu.384131

McMeechan v Secretary of State for Employment: CA 11 Dec 1996

The respondent as a temporary worker was entitled to be treated as an employee of an agency within the contract governing the particular engagement where money was due when the agency went into liquidation. He was therefore able to claim against the respondent as such on that insolvency. A temporary worker might be an employee for each assignment in which he actually works even though he may not be an employee of the agency under a general contract. Waite LJ: ‘There is nothing inherently repugnant, whether to good relations in the workplace or in law, about a state of affairs under which, in an employment agency case, the status of employee of the agency is allocated to a temporary worker in respect of each assignment actually worked – notwithstanding that the same worker may not be entitled to employee status under his general terms of engagement’ and ‘The force of this is not lost in cases where – following what appears to be a common (though potentially confusing) practice – the agency and the temporary worker have committed themselves to standard terms and conditions which are intended to apply both to the general engagement and to the individual stints worked under it. The only result of that fusion is that the same conditions will have to be interpreted from a different perspective, according to whether they are being considered in the context of the general engagement or in the context of a single assignment.’

Judges:

Lord Justice McCowan, Lord Justice Waite, Lord Justice Potter

Citations:

[1996] EWCA Civ 1166, [1997] IRLR 353, [1997] ICR 549

Links:

Bailii

Statutes:

Employment Protection (Consolidation) Act 1978 8122

Jurisdiction:

England and Wales

Citing:

Appeal from – McMeechan v Secretary of State for Employment and Another EAT 23-Nov-1994
The applicant was a temporary worker on the books of an employment agency, which went into insolvent liquidation. He claimed that he had a contract of service with the agency. That formed the basis of his application to the Secretary of State under . .

Cited by:

Cited – Brook Street Bureau (UK) Ltd v Dacas CA 5-Mar-2004
The applicant cleaner sought compensation for unfair dismissal. The issue was whether she was an employee of the respondents, of their client where she did her work, or was not an employee at all. She worked for an agency, who sent her out to . .
Cited – Clark v Oxfordshire Health Authority CA 18-Dec-1997
A nurse was employed under a contract, under which there was no mutuality of obligation; she could refuse work and employer need offer none. This meant that there was no employment capable of allowing an unfair dismissal issue to arise.
Sir . .
Cited – Dacas v Brook Street Bureau (UK) Ltd, Wandsworth London Borough Council EAT 12-Nov-2002
EAT Contract of Employment – Definition of Employee . .
Cited – Cornwall County Council v Prater CA 24-Feb-2006
The claimant worked for the local authority under a series of contracts. The employer denied that she had been continuously employed and there was no ‘irreducible minimum mutual obligation necessary to create a contract of service’. There were times . .
Cited – Drake v Ipsos Mori UK Ltd EAT 25-Jul-2012
drake_ipsosEAT2012
EAT JURISDICTIONAL POINTS – Worker, employee or neither
The Claimant worked for the Respondent as a market researcher under a succession of individual assignments. The Employment Judge erred in law in . .
Cited – Uber Bv and Others v Aslam and Others SC 19-Feb-2021
Smartphone App Contractors did so as Workers
The court was asked whether the employment tribunal was entitled to find that drivers whose work was arranged through Uber’s smartphone application work for Uber under workers’ contracts and so qualify for the national minimum wage, paid annual . .
Lists of cited by and citing cases may be incomplete.

Employment, Benefits, Insolvency

Updated: 09 August 2022; Ref: scu.141034

In re Dynamics Corporation of America: ChD 1976

In a compulsory winding up of an insolvent company, a creditor’s claim for a debt in a foreign currency, and any set-off in a foreign currency against such a debt, must be converted into sterling as at the date of the winding up order. The result was to shelter the creditor from the risk of a decline in sterling between the date when the debt fell due and the commencement of the liquidation. But the creditor remained exposed to the risk of a decline of sterling between the commencement of the liquidation and the payment of a dividend. This difference between the position of a judgment creditor and a creditor seeking to prove in a liquidation was, however, a necessary incident of any scheme for the distribution of an insolvent estate, because debts had to be expressed in a common unit of account valued as at a common date if creditors were to rank pari passu in their claims to the deficient pool of assets.
Oliver J said that he considered that the correct analysis was that the contractual debt was converted into the right to prove, and that ‘the obligation of the company . . is to pay whatever is the sterling equivalent [of the foreign currency debt] at [the date of liquidation]’

Judges:

Oliver J

Citations:

[1976] 1 WLR 757

Jurisdiction:

England and Wales

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 08 August 2022; Ref: scu.641427

In re MC Bacon Ltd (No2): ChD 1991

A claim was made by the liquidator for reimbursement, out of a fund in the hands of a secured creditor, of costs, which included costs the liquidator had been ordered to pay the secured creditor following the dismissal of the action in which he sought to invalidate the creditor’s security as a voidable preference.
Held: The action was dismissed when the liquidator called no evidence: ‘the expenses of realising or getting in the assets do not include the costs of an unsuccessful attempt to recover an asset’
Millett J observed that it would be ‘difficult to imagine anything more unjust’ than making the order sought.

Judges:

Millett J

Citations:

[1991] Ch 127, [1990] BCLC 607, [1990] BCC 430, [1990] 3 WLR 646

Jurisdiction:

England and Wales

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Costs, Insolvency

Updated: 08 August 2022; Ref: scu.641433

Oakes v Turquand: hL 1867

Lord Chelmsford said: ‘it is said that everything that is stated in the prospectus is literally true, and so it is; but the objection to it is, not that it does not state the truth as far as it goes, but that it conceals most material facts with which the public ought to have been made acquainted, the very concealment of which gives to the truth which is told the character of falsehood.’
and: ‘It plainly left every shareholder subject to all previous liabilities, except only that a line or boundary was fixed, beyond which his obligations could not be extended.’

Judges:

Lord Cranworth, Lord Chelmsford LC

Citations:

(1867) LR 2 HL 325

Statutes:

Companies Act 1862

Jurisdiction:

England and Wales

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 08 August 2022; Ref: scu.641436

In re Pyle Works: CA 1890

The court was asked about a mortgage of the uncalled amounts on some partly paid shares and all the present and future property of the company. The issue was whether the mortgages extended to the calls to be made by the liquidator in the winding up of the company, so giving the mortgagees priority over the unsecured creditors.
Held: The appeal was rejected. The calls to be made by the liquidator were subject to the mortgages.
As regards In re Whitehouse and Co, Cotton LJ said: ‘Although the decision of the Master of the Rolls was right, yet in my opinion his observations upon the position of the liquidator, as regards a call made in the winding up upon a shareholder who is also a creditor of the company and claims a right to set-off his debt against the call, were, though unintentionally, erroneous; for he disallowed the set-off in that case, not on the true ground put by the Court of Appeal in Black and Co’s Case, but on the ground that a call is something that accrues to the liquidator, and is not a sum which is really due to the company, and that the shareholder’s debt is a debt due to him from the company and not from the liquidator.’
Any money paid under a call for unpaid capital cannot be treated as part of the property of the company concerned: it forms a statutory fund which can only come into existence once the company in question has gone into liquidation.

Judges:

Cotton, Lindley and Lopes LJJ

Citations:

(1890) 44 Ch D 534

Jurisdiction:

England and Wales

Citing:

Distinguished in part – In re Whitehouse and Co CA 1878
The Court was asked whether a contributory was entitled to set off a debt due to him from the company against calls made against him both by the company before the commencement of its liquidation and by the liquidator after the commencement of its . .

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 08 August 2022; Ref: scu.641428

In re Auriferous Properties Ltd (No 1): ChD 1898

African Gold Properties Ltd (the Gold Company) held shares in Auriferous Properties Ltd (the Auriferous Company). In January 1896, the Auriferous Company became indebted to the Gold Company in the sum of pounds 2,775. Two calls were made by the directors of the Auriferous Company in January and June 1896, making the Gold Company liable in the sum of pounds 1,250. In December 1896, the Auriferous Company was wound up by order of the court. In January 1898 the Gold Company went into creditors’ voluntary winding up. The Gold Company lodged a proof for its debt in the winding up of the Auriferous Company. Acting by its liquidator, it issued a summons in the winding up of the Auriferous Company, raising for decision the question whether the debt owing to it by the Auriferous Company could be set off by the calls due by it to the Auriferous Company. The summons was subsequently amended by also being entitled in the matter of the winding up of the Gold Company.
Held: The liquidator of the company was entitled to prove in the winding up of a corporate contributory for the whole amount due by way of calls on the shares without set-off.

Judges:

Wright J

Citations:

[1898] 1 Ch 691

Jurisdiction:

England and Wales

Cited by:

See Also – In re Auriferous Properties Ltd (No 2) 1898
A claim was made in the liquidations by a creditor, but the creditor also held shares in the company which were not fully paid up.
Held: The creditor plaintiff could recover nothing as a creditor until all his liability as a contributory had . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 08 August 2022; Ref: scu.641431

In re Ayala Holdings Ltd (No 2): ChD 1996

The Court was asked as to an assignment to a creditor of all rights to and choses in action relating to or in any way arising out of or in connection with an action against a secured creditor. The rights purportedly assigned included the right to assert that certain dispositions of the company’s property after the commencement of the winding up were void under s.127 of the 1986 Act and that certain charges on the company’s property were void under s.395 Companies Act 1985 as against the liquidator for non-registration. The assignee argued that the assigned rights were property of the company which a liquidator can sell under para.6 of Sch.4.
Held:
Knox J asked what para.6 meant when it used the expression ‘property of the company’? He continued: ‘In my judgment [the assignee’s] argument overlooks one important distinction between property of the company, on the one hand, and the rights and powers of a liquidator on the other. The property of a company includes rights of action against third parties vested in a company at the commencement of the winding up and to that extent the principles in Ramsey v Hartley undoubtedly apply and such rights can, as I see it, be sold by a liquidator pursuant to para.6 of Sch.4. What is to be distinguished in my view are the statutory privileges and liberties conferred upon liquidators as such and indeed upon trustees in bankruptcy who are officers of the court and act under the court’s directions’.
Knox J referred to: ‘the fundamental distinction between assets of a company and rights conferred upon a liquidator in relation to the conduct of the liquidation. The former are assignable by sale under para 6 of Sch 4, the latter are not because in my view they are an incident of the office of the liquidator. The conclusion is, in my view, supported by the special status of the liquidator in company law.’
Knox J continued by referring to the powers of the liquidator under s.167 of the 1986 Act and said: ‘Now, if Mr Menzies is right in submitting that a liquidator can assign any of his powers the assignee, who is not a liquidator, would be free from any such control and I find it very difficult to envisage that Parliament could have contemplated that that was a permissible state of affairs.’

Judges:

Knox J

Citations:

[1996] 1 BCLC 467

Statutes:

Insolvency Act 1986 167

Jurisdiction:

England and Wales

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 08 August 2022; Ref: scu.641432

In re Whitehouse and Co: CA 1878

The Court was asked whether a contributory was entitled to set off a debt due to him from the company against calls made against him both by the company before the commencement of its liquidation and by the liquidator after the commencement of its liquidation.
Held: Section 38 gave rise to a ‘debt due to the liquidator’ which could not therefore be the subject of set-off against a debt due from the company. As to the statutory liability to calls made by a liquidator for the purpose of enforcing the liability under section 38: ‘That is a new liability; he is to contribute; it is a new contribution. It is a mistake to call that a debt due to the company. It is no such thing. It is not, as has been supposed, in any shape or way a debt due to the company, but it is a liability to contribute to the assets of the company; and when we look further into the Act, it will be seen that it is a liability to contribution to be enforced by the liquidator. It is quite true that a call made before the winding up – and in the case before me a call was made before the winding up – is a debt due to the company, but that does not affect this new liability to contribution.’

Judges:

Sir George Jessel MR

Citations:

(1878) 9 Ch D 595

Statutes:

Companies Act 1862 38

Jurisdiction:

England and Wales

Cited by:

Distinguished in part – In re Pyle Works CA 1890
The court was asked about a mortgage of the uncalled amounts on some partly paid shares and all the present and future property of the company. The issue was whether the mortgages extended to the calls to be made by the liquidator in the winding up . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 08 August 2022; Ref: scu.641429

Wilson (Liquidator of The North British Lactina Manufacturing Co, Ltd), Petitioner: SCS 16 Dec 1885

In a note by the liquidator in the winding-up of the North British Lactina Manufacturing Company, Limited, the certificate of intimation bore that the intimation had been made to the parties named in the interlocutor of Court by two apprentices to a writer in Glasgow, by posting, on certain dates named, in the Glasgow Post Office, a print of the note with a copy of the interlocutor endorsed thereon, in registered letters, and the certificate was signed by the apprentices. The Court, on their attention being directed to this fact by the Clerk of Court when the petitioner appeared to move in the Single Bills that the prayer of the note should be granted, declined to sustain an intimation so signed as complying with the 3d and 4th sections of the Citation Amendment (Scotland) Act 1882.

Citations:

[1885] SLR 23 – 227

Links:

Bailii

Jurisdiction:

Scotland

Insolvency

Updated: 08 August 2022; Ref: scu.580410

Re Lehman Brothers International (Europe) and Others: ChD 14 Mar 2014

On the winding up of the company, there had unexpectedly been a surplus of assets after payment of all debts. The court was now asked to determine claims to be allowed before a distribution was made.
Held: The court made declarations as follows: ‘i) The claims of LBHI2 under its subordinated loan agreements with LBIE are subordinated not only to provable debts but also to statutory interest and un-provable liabilities.
ii) Creditors of LBIE whose contractual or other claims are denominated in a foreign currency are entitled to claim against LBIE for any currency losses suffered by them as a result of a decline in the value of sterling as against the currency of the claim between the date of the commencement of the administration of LBIE and the date or dates of payment or payments of distributions to them in respect of their claims. Such currency conversion claims rank as un-provable liabilities, payable only after the payment in full of all proved debts and statutory interest on those debts.
iii) If the administration of LBIE is immediately followed by a liquidation, any interest in respect of the period of the administration which has not been paid before the commencement of the liquidation will not be provable as a debt in the liquidation nor will it be payable as statutory interest under either rule 2.88 of the Insolvency Rules or section 189 of the IA 1986.
iv) Those creditors of LBIE with debts which carry interest by reason of contract, judgment or other reasons unconnected with the administration or liquidation of LBIE will be entitled to claim in a liquidation of LBIE, which immediately follows the administration, for interest which accrued due during the period of the administration, as an un-provable claim against LBIE, payable after the payment in full of all proved debts and statutory interest on such debts.
v) The obligation of members to contribute under section 74(1) of the IA 1986 extends not only to provide for proved debts but also for statutory interest on those debts and un-provable liabilities.
vi) The contributory rule (that is, the rule that a contributory of a company in liquidation cannot recover anything in respect of any claims he may have as a creditor until he has fully discharged his obligations as a contributory) applies only in a liquidation. It does not apply in an administration, including the administration of LBIE. The equitable rule in Cherry v Boultbee also does not apply.
vii) LBIE, acting by its administrators, will be entitled to lodge a proof in a distributing administration or a liquidation of either LBL or LBHI2 in respect of those companies’ contingent liabilities under section 74(1) of the IA 1986 which may arise if LBIE were to go into liquidation. The valuation of such claims would be a matter of estimation under the provisions of the Insolvency Rules.
viii) In a distributing administration or liquidation of LBL or LBHI2, the claims of those companies respectively as creditors of LBIE would be the subject of mandatory set-off against the claims of LBIE in respect of those companies’ contingent liabilities as contributories. I have reached the conclusion that the decision in In re Auriferous Properties Limited (No 1) [1898] 1 Ch 691 was wrong and should not be followed.
ix) In the administration of LBIE the contingent liabilities of LBL and LBHI2 as contributories will be the subject of mandatory set-off against the admitted proofs of debt of those companies as creditors of LBIE.’

Judges:

David Richards J

Citations:

[2014] EWHC 704 (Ch), [2014] WLR(D) 132, [2015] 1 Ch 1, [2014] 3 WLR 466, [2014] BCC 193

Links:

Bailii, WLRD

Jurisdiction:

England and Wales

Cited by:

At ChD – LB Holdings Intermediate 2 Ltd, (The Joint Administrators of) and Others v Lomas and Others CA 14-May-2015
Applications after recovery of surplus funds to repay creditors of Lehmann Brothers Ltd. The court had given orders as to the several uses of the surpluses. The parties appealed some elements of those orders.
Held: Most elements were upheld, . .
At ChD – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 07 August 2022; Ref: scu.522457

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 issued by the Pensions Regulator under the 2004 Act after the company had gone into administration, which required the company to put in place financial support for an occupational pension scheme, did not rank as an expense of the administration under rule 2.67(1)(f) of the 1986 Rules, but if by the time it went into administration it had for the preceding two years been vulnerable to a liability under a pension scheme, that liability remained an obligation which ranked in the administration and was provable as debt of the company.
By participating in litigation, a party submitted himself to a liability to pay costs in accordance with rules of court, contingently upon an order for costs being made against him. It followed that where proceedings were begun by or against a company before it went into liquidation, a liability for costs under an order made after it went into liquidation was provable as a contingent debt.
‘In a liquidation of a company and in an administration (where there is no question of trying to save the company or its business), the effect of insolvency legislation . . , as interpreted and extended by the courts, is that the order of priority for payment out of the company’s assets is, in summary terms, as follows:
(1) Fixed charge creditors;
(2) Expenses of the insolvency proceedings;
(3) Preferential creditors;
(4) Floating charge creditors;
(5) Unsecured provable debts;
(6) Statutory interest;
(7) Non-provable liabilities; and
(8) Shareholders.’

Judges:

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

Citations:

[2013] UKSC 52, [2013] 4 All ER 887, [2013] Bus LR 1056, [2013] 2 BCLC 135, [2013] Pens LR 299, [2013] BCC 624, [2013] BPIR 866, [2013] WLR(D) 300, [2014] 1 AC 209, UKSC 2011/0259, [2013] 3 WLR 504

Links:

Bailii, WLRD, Bailii Summary, SC Summary, SC

Statutes:

Insolvency Rules 1986 2.67(1)(f), Insolvency (Amendment) Rules 2006, Insolvency (Amendment) Rules 2003, Pensions Act 2004 43

Jurisdiction:

England and Wales

Citing:

At first instance (disapproved) – Bloom and Others v The Pensions Regulator (Nortel, Re) ChD 10-Dec-2010
Applications for directions by the administrators of twenty companies in two groups, all raising the same common questions as to the effect of the Financial Support Direction regime created by the Pensions Act 2004 upon companies in administration . .
Appeal from – Bloom and Others v The Pensions Regulator and Others; In re Nortel GMBH (in administration CA 14-Oct-2011
‘These appeals raise important and difficult questions posed by the impact of legislation for the protection of pension funds upon companies which are undergoing an insolvency process.’ . .
Cited – 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 – 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 . .
Cited – In re ABC Coupler and Engineering Co Ltd (No 3) ChD 1970
The liquidator when appointed closed down the business which had been conducted on the premises, had the company’s plant and machinery valued and thought about what he should do.
Held: The rent did not become a liquidation expense until some . .
Cited – Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .
Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Cited – Steele, Regina (on the Application of) v Birmingham City Council and The Secretary of State for Work and Pensions CA 16-Dec-2005
The claimant had received an overpayment of benefits (Job seeker’s allowance), but then was made bankrupt. He now said that this was a debt in the bankruptcy.
Held: It was not. At the date of the bankruptcy order, the possible reclaim was not . .
Cited – In re T and N Ltd and Others (No 3) ChD 16-Jun-2006
The court considered the application of ‘the bankruptcy template of section 382 to the rules governing the winding up of companies’.
Held: The phrase ‘obligation incurred’ in Rule 13.2(1)(b) was inapt to describe a common law duty of care in . .
Cited – 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 – In re Smith ex parte Edwards 1886
The parties to an arbitration agreement had agreed to pay whatever costs the arbitrator decided in his discretion to award. The losing party then went bankrupt.
Held: His bankruptcy did not relieve him of his liability for the costs. The . .
Cited – In re British Gold Fields of West Africa 1899
An order for costs could be proved where the action was in respect of a provable debt or liability. In such a case they were regarded as an addition to the sum recovered. . .
Approved – Haine v Secretary of State for Business Enterprise and Regulatory Reform and Another; Day v Haine CA 11-Jun-2008
Former employees had obtained a protective award against the company for failing to consult on the impending redundancies and submitted proofs of debt to the liquidator who sought guidance from the court. The judge had held that since the Act . .
Disapproved – 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 . .
Disapproved – Steele v Mooney and others CA 8-Feb-2005
The claimant had sought an extension of time for service of her claim form in her action for personal injury. The solicitors in error did not include the words ‘claim form’ in their request. The judge had initially held the error was one of drafting . .
Cited – The Carron Iron Company Proprietors v Maclaren, Dawson, Stainton PC 23-Jul-1855
If the circumstances of a case are such as would make it the duty of one court in this country to restrain a party from instituting proceedings in another court here, they will also warrant it in imposing on him a similar restraint with regard to . .
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 – In re Trent and Humber Shipbuilding Co; Bailey and Leetham’s Case 1869
The court was asked whether costs awarded against a company were costs in the winding up.
Held: Where a creditor has obtained leave of the court to bring proceedings against a company in liquidation, any costs to which the creditor would . .
Cited – In re International Marine Hydropathic Co CA 1884
Where rates become due in respect of land occupied by a liquidator for the purpose of the winding up, the liquidator is liable to meet those rates. . .
Cited – In re National Arms and Ammunition Co CA 1885
‘If the company retains the possession of property which would be rateable in the hands of anyone else, it is only reasonable that it should be rateable in the hands of the company . . the true test is whether there has been a beneficial occupation . .
Cited – In re Blazer Fire Lighter Ltd 1895
The liquidator had closed the business and done nothing on the premises except to instal a caretaker to protect them from vandalism. That was sufficient to continue the company in rateable occupation. So the rates were an expense of the liquidation. . .
Cited – In re Wenborn and Co 1905
Buckley J held: ‘When the voluntary liquidator, or the liquidator in a compulsory winding up, comes to the Court for leave to bring or defend an action by or against the company, and obtains this leave, the judge in effect pledges the assets of the . .
Cited – In re Beni-Felkai Mining Co Ltd 1933
A liquidator’s remuneration is not encompassed by the word ‘expenses’. The term ‘expenses’ is not a term of art. It may include any expenses which the liquidator may be compelled to pay in respect of his acts in the course of a proper liquidation of . .
Cited – In re Mesco Properties Ltd CA 1980
Tax legislation provided that the company was chargeable to corporation tax on a capital gain arising in the winding up.
Held: The appeal failed. It was a tax which the liquidator was bound to discharge by payment, and the payment was a . .
Cited – Exeter City Council v Bairstow and others; Re Trident Fashions plc CA 10-Mar-2006
. .
Cited – Burton, Re Direction of Assets; In re Thomas v Burton, liquidator of Ben Line Steamers Ltd SCS 24-Dec-2010
Outer House, Court of Session . .
Cited – In re Condon, Ex parte James 1874
The Trustee in bankruptcy has relevant duties as the Trustee as an officer of the Court. Such a Trustee would not engage in conduct which could be seen to involve an unfair use of that position, and ‘where it would be unfair’ for a trustee in . .
Cited – In Re Kentish Homes Ltd ChD 31-Mar-1993
The question was whether a post-liquidation liability to community charge on empty flats was an expense of the liquidation.
Held: The company was the chargeable person in respect of the flats for the relevant periods, but the liability was . .
Cited – Re T H Knitwear (Wholesale) Ltd CA 1988
Subrogation is a remedy, not a cause of action. Subrogation of Customs and Excise to a creditor’s right of proof in the winding up of a supplier was refused as it would have been contrary to the statutory scheme for the administration of VAT. . .
Cited – In Re Oriental Inland Steam Company ex parte Scinde Railway Company CA 1874
The liquidator obtained an order requiring a creditor who had attached assets in India to return them to the company in liquidation.
Sir W M James LJ said: ‘The winding-up is necessarily confined to this country. It is not immaterial to . .
Cited – 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 . .
Cited – In re UCT (UK) Ltd ChD 2001
Arden J was asked to approve aproposal that the company should go into voluntary liquidation, on the basis that, prior to that happening, the administrators would pay into a trust account in their own name a sum equal to the total amount owing to . .
Cited – Getliffe and Another, Re Lune Metal Products Ltd CA 14-Dec-2006
. .

Cited by:

Cited – BPE Solicitors and Another v Gabriel SC 17-Jun-2015
Application for directions in a pending appeal. The claimant alleged negligence against his former solicitors. After his successful claim was substantially overturned on appeal, he was made bankrupt.
Held: If the trustee adopted and pursued . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Employment, Company

Updated: 07 August 2022; Ref: scu.513677

In re Auriferous Properties Ltd (No 2): 1898

A claim was made in the liquidations by a creditor, but the creditor also held shares in the company which were not fully paid up.
Held: The creditor plaintiff could recover nothing as a creditor until all his liability as a contributory had been properly discharged. The liquidator of the company was entitled to prove in the winding up of a corporate contributory for the whole amount due by way of calls on the shares without set-off.
Wright J said: ‘There is no contract for a set-off, nor do the articles of association of either company appear to contain any provision for it, nor do the general statutes of set-off apply. Nor, as it seems, is the doctrine of set-off in bankruptcy . . applicable to this case . . But in my opinion this case is governed by the principle established in Grissell’s case [In re Overend, Gurney and Co (1866) LR 1 Ch App 528] and is within the express terms of the Lord Chancellor’s judgment in that case. If the creditor-contributory were allowed to take the dividend without paying the call, he would be receiving payment of part of the debt which the company owes to him without making his contribution to the fund out of which that debt, with the other debts of the company, was to be paid. ‘If’, Lord Chelmsford says, ‘the amount of an unpaid call cannot be satisfied by a set-off of an equivalent portion of a debt due to the member of a company upon whom it is made, it necessarily follows in the last place, that the amount of such call must be paid before there can be any right to receive a dividend with the other creditors. The amount of the call being paid, the member of the company stands exactly on the footing of the other creditors with respect to a dividend upon the debt due to him from the company. The dividend will be of course upon the whole debt, and the member of the company will from time to time, when dividends are declared, receive them in like manner when either no call has been made, or having been made, when he has paid the amount of it.”

Judges:

Wright J

Citations:

[1898] 2 Ch 428

Jurisdiction:

England and Wales

Citing:

See Also – In re Auriferous Properties Ltd (No 1) ChD 1898
African Gold Properties Ltd (the Gold Company) held shares in Auriferous Properties Ltd (the Auriferous Company). In January 1896, the Auriferous Company became indebted to the Gold Company in the sum of pounds 2,775. Two calls were made by the . .

Cited by:

Cited – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Lists of cited by and citing cases may be incomplete.

Equity, Insolvency

Updated: 07 August 2022; Ref: scu.449848

In re Kaupthing Singer and Friedlander Ltd: ChD 18 Dec 2009

The bank went into adminstration under special arrangements. The administrators of KSF applied to the Chancery Division for directions as to the applicability of the rule in Cherry v Boultbee.
Held: The rule was not excluded. The administrators of KSF might rely on it unless and until KSF’s right to indemnity (as a surety) had been satisfied in full.

Judges:

Sir Andrew Morritt C

Citations:

Unreported, 18-Dec-09

Jurisdiction:

England and Wales

Cited by:

Appeal from – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 07 August 2022; Ref: scu.449846

In re Overend Gurney and Co (Grissell’s case): 1866

On the insolvency of a company, no cross claim may be set off against the company member’s liability for unpaid capital, for debt. Lord Cheldmsford LC said: ‘If the amount of an unpaid call cannot be satisfied by a set-off of an equivalent portion of a debt due to the member of a company upon whom it is made, it necessarily follows in the last place, that the amount of such call must be paid before there can be any right to receive a dividend with the other creditors. The amount of the call being paid, the member of the company stands exactly on the footing of the other creditors with respect to a dividend upon the debt due to him from the company. The dividend will be of course upon the whole debt, and the member of the company will from time to time, when dividends are declared, receive them in like manner when either no call has been made, or having been made, when he has paid the amount of it.’

Judges:

Lord Chelmsford LC

Citations:

(1866) LR 1 Ch App 528

Jurisdiction:

England and Wales

Cited by:

Cited – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 07 August 2022; Ref: scu.449849

Ex parte Mackay; Ex parte Brown; In re Jeavons: 1873

Mr Jeavons sold a patent regarding the manufacture of armour plates to a Brown and Co and Cammell and Co in consideration of the companies paying royalties. There was also a loan from the company to Mr Jeavons secured on the royalties. The parties agreed that (1) the companies would keep half the royalties towards satisfying the debt, and (2) in the event of Mr Jeavons’ bankruptcy, they could also keep the other half of the royalties until the debt had been fully paid.
Held: The first provision was valid, but the second was invalid.
James LJ said that provision (1) represented ‘a good charge upon one moiety of the royalties, because they are part of the property and effects of the bankrupt’, but provision (2) ‘is a clear attempt to evade the operation of the bankruptcy laws’ as it ‘provide[d] for a different distribution of his effects in the event of bankruptcy from that which the law provides’.
And
A person ‘is not allowed, by stipulation with a creditor, to provide for a different distribution of his effects in the event of bankruptcy from that which the law provides’
Mellish LJ said that the case fell within the principle that: ‘a person cannot make it a part of his contract that, in the event of bankruptcy, he is then to get some additional advantage which prevents the property being distributed under the bankruptcy laws’

Judges:

James, Mellish LJJ

Citations:

(1873) LR 8 Ch App 643

Jurisdiction:

England and Wales

Citing:

Cited – Higinbotham v Holme 6-May-1812
A settlement entered into disposing of property into a trust for himself and others when the donor was not endebted, but which provided that on his bankruptcy would pay an annuity to his wife, was void as against creditors on his later bankruptcy. . .

Cited by:

Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Cited – British Eagle International Airlines Ltd v Compagnie National Air France HL 1975
British Eagle, which had gone into liquidation. The parties disputed a contract attempting to reset the ranking of debts. The House was asked whether there was a debt due to the insolvent company at the commencement of its winding-up, to which the . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Contract

Updated: 07 August 2022; Ref: scu.442610

In re Kaupthing Capital Partners: ChD 2010

Judges:

Proudman J

Citations:

[2010] EWHC 386 (Ch)

Jurisdiction:

England and Wales

Citing:

Applied – In re G-Tech Construction Limited ChD 29-Sep-2005
In appointing the administrators, the wrong form had been used. The court was asked to use its powers to cure the mistake. The failure to file the correct form was overlooked, with the result that one of the prerequisites of an appointment taking . .

Cited by:

Cited – In re Care Matters Partnership Ltd ChD 7-Oct-2011
An application was made for the appointment of administrators with retrospective effect.
Held: ‘there are two separate questions. The first question is whether an administration order should be made at all. This requires both the satisfaction . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 07 August 2022; Ref: scu.445162

Bloom and Others v The Pensions Regulator (Nortel, Re): ChD 10 Dec 2010

Applications for directions by the administrators of twenty companies in two groups, all raising the same common questions as to the effect of the Financial Support Direction regime created by the Pensions Act 2004 upon companies in administration or insolvent liquidation.
Briggs J said that Lord Hoffmann’s speech in Toshoku established as ‘a general rule’ that: ‘ . . where by statute Parliament imposes a financial liability which is not a provable debt on a company in an insolvency process then, unless it constitutes an expense under any other sub-paragraph in the twin expenses regimes for liquidation and administration, it will constitute a necessary disbursement of the liquidator or administrator. That is the general rule, whether the statute expressly refers to companies in an insolvency process as being subject to the liability, or whether the statute achieves the same result by using a criterion for liability which is insolvency neutral. Any other conclusion would in my judgment attribute an excessive weight to the linguistic method by which different legislation achieved the same result, namely that the statutory obligation in question is a liability of a company in an insolvency process.’

Judges:

Briggs J

Citations:

[2010] EWHC 3010 (Ch), [2011] BCC 277, [2011] Pens LR 37, [2011] Bus LR 766

Links:

Bailii

Statutes:

Pensions Act 2004 43, Insolvency Rules 1986, Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

Explained – Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .

Cited by:

At first instance (disapproved) – 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 . .
Appeal from – Bloom and Others v The Pensions Regulator and Others; In re Nortel GMBH (in administration CA 14-Oct-2011
‘These appeals raise important and difficult questions posed by the impact of legislation for the protection of pension funds upon companies which are undergoing an insolvency process.’ . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Financial Services, Insolvency

Updated: 07 August 2022; Ref: scu.427288

Stocznia Gdanska Sa v Latreefers Inc: ComC 21 Dec 1998

In some cases the appointment of a provisional liquidator of an insolvent company may be justified because of his ability to investigate possible claims against directors for fraudulent or wrongful trading.

Judges:

Lloyd J

Citations:

[1998] EWHC 1203 (Comm), [1999] 1 BCLC 271

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Cited by:

Cited – Revenue and Customs v Rochdale Drinks Distributors Ltd CA 13-Oct-2011
The revenue appealed against refusal of its petition for the winding up of the company for non-payment of a VAT assessment. The company said that the assessment was disputed. The revenue said that the company had been run for the purpose of . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 07 August 2022; Ref: scu.381748

Graham and Others, Assignees of Leigh, a Bankrupt, v Russell: 25 Nov 1816

Citations:

[1816] EngR 802, (1816) 3 Price 227, (1816) 146 ER 244

Links:

Commonlii

Jurisdiction:

England and Wales

Citing:

See Also – Graham and Others, Assignees of Leigh, Bankrupt v Russell 25-Nov-1816
An underwriter, in an action by the assignees of a bankrupt assured, upon a loss which happened after the bankruptcy, may set off a sum due to him for premiums on the balance of accounts between the bankrupt and himself. . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 07 August 2022; Ref: scu.334495

Graham and Others, Assignees of Leigh, Bankrupt v Russell: 25 Nov 1816

An underwriter, in an action by the assignees of a bankrupt assured, upon a loss which happened after the bankruptcy, may set off a sum due to him for premiums on the balance of accounts between the bankrupt and himself.

Citations:

[1816] EngR 803, (1816) 5 M and S 498, (1816) 105 ER 1133

Links:

Commonlii

Jurisdiction:

England and Wales

Cited by:

See Also – Graham and Others, Assignees of Leigh, a Bankrupt, v Russell 25-Nov-1816
. .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 07 August 2022; Ref: scu.334496

Re Nortel Networks Sa and others: ChD 11 Feb 2009

Administrators of several associated companies registered in countries throughout Europe requested the court to issue requests to other states to order notification of the Administrators of any secondary insolvency proceedings issued.

Judges:

Patten J

Citations:

[2009] EWHC 206 (Ch), [2009] BPIR 316, [2009] BCC 343, [2009] ILPr 42

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, European

Updated: 07 August 2022; Ref: scu.304542

Whitmore v Turquand: 21 Dec 1860

Where a composition deed is executed in favour of all creditors who shall accede within a stipulated time, creditors who neither assent nor dissent within the time are not necessarily excluded from all benefit of the deed; and, under the circumstances of the case, creditors who had delayed their accession to a composition deed for several years after the limited time.
Held: entitled to participate in the benefits thereof.

Citations:

[1860] EngR 1304, (1860) 1 J and H 444, (1860) 70 ER 821

Links:

Commonlii

Jurisdiction:

England and Wales

Insolvency

Updated: 07 August 2022; Ref: scu.286143

Forster v Wilson: 1843

English law regards insolvency set off as a way of achieving substantial justice between the parties.

Judges:

Parke B

Citations:

(1843) 12 M and W 191

Jurisdiction:

England and Wales

Cited by:

Cited – McGrath and others v Riddell and others HL 9-Apr-2008
(Orse In Re HIH Casualty and General Insurance Ltd)
HIH, an Australian Insurance company, became insolvent. An order was sought for the collection and remission of it assets in England under a letter of request from the Australia Court.
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Equity, Insolvency

Updated: 07 August 2022; Ref: scu.266613

TS and S Global Ltd v Fithian-Franks and others: ChD 18 Jun 2007

Appeal against setting aside of statutory demand disputed as to amount of liability under contract.
Held: The guarantors’ liability under the guarantee was immediately payable by them, without the need for a demand, before service of the statutory demands.

Judges:

David Richards J

Citations:

[2007] EWHC 1401 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – In re J Brown’s Estate 1893
Chitty J considered whether a debt required a demand to have been made for it to become payable: ‘it is plain that a distinction has been taken and maintained in law, the result of which is that where there is a present debt and a promise to pay on . .
Cited – Bradford Old Bank Ltd v Sutcliffe CA 1918
A demand for payment is not necessary in order to make a present debt immediately payable, even if it is expressed to be payable on demand, unless it is a collateral debt. . .
Cited – MS Fashions Ltd v Bank of Credit and Commerce International SA CA 1993
BCCI contracted with three companies and their directors or others as sureties. Money was deposited with BCCI as security from the companies. Some agreements described the sureties as ‘principal debtor’ or contained personal covenants by them as . .
Cited – In re a Debtor (No 1 of 1987), ex parte the Royal Bank of Scotland CA 1989
A statutory demand as served showed an incorrectly calculated sum owed and was in the wrong form.
Held: The application to set the demand aside was refused. A statutory demand should not be set aside for a mere technicality.
Lord Justice . .
Cited – Stimpson v Smith CA 11-Mar-1999
The court was asked whether a guarantor who had made a payment discharging the guarantee without a formal demand but following negotiations with the creditor, and in circumstances where otherwise the creditor would probably have made a demand, could . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 06 August 2022; Ref: scu.253583

Ward v Aitken and Others; In re Oasis Merchandising Services Ltd: ChD 19 Jun 1995

An agreement to share the proceeds of litigation against Directors was champertous.

Citations:

Times 19-Jun-1995

Statutes:

Insolvency Act 1986 S4P6

Jurisdiction:

England and Wales

Cited by:

Appeal from – Ward v Aitken and Others; In re Oasis Merchandising Services Ltd CA 9-Oct-1996
The Court was asked as to the validity of the assignment by a liquidator to a litigation funder of the benefit of a wrongful trading claim against the directors of the company under section 214 of the IA 1986. The directors sought to stay the claim . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 06 August 2022; Ref: scu.90298

In Re Bank of Credit and Commerce International Sa, In Re BCCI (Overseas) Ltd (No 9): ChD 11 Aug 1993

An English Court has the jurisdiction and discretion to apply English insolvency law to a foreign registered company.

Judges:

Rattee J

Citations:

Ind Summary 20-Sep-1993, Times 11-Aug-1993, [1994] 2 BCLC 636

Jurisdiction:

England and Wales

Citing:

Approved – Re Dallhold Estates (UK) Pty Ltd ChD 1992
The court discussed the the receipt and acceptance of a letter of request: ‘The scheme of subsection (5) appears to me to be this. The first step is to identify the matters specified in the request. Secondly, the domestic court should ask itself . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 06 August 2022; Ref: scu.81734

Hindcastle Ltd v Barbara Attenborough Associates Ltd and Others: CA 6 Jul 1994

A disclaimer of a lease on insolvency of the tenant leaves the original Tenant and his Security or guarantor liable as well as any intermediate assignees. ‘In order to determine these rights and obligations it is necessary, in the nature of things, that the landlord’s obligations and rights, which are the reverse side of the tenant’s rights and obligations, must also be determined. If the tenant’s liabilities to the landlord are to be extinguished, of necessity so also must be the landlord’s rights against the tenant. The one cannot be achieved without the other. Disclaimer also operates to determine the tenant’s interests in the property, namely the lease. Determination of a leasehold estate has the effect of accelerating the reversion expectant upon the determination of that estate. The leasehold estate ceases to exist.’

Citations:

Ind Summary 18-Jul-1994, Times 06-Jul-1994

Jurisdiction:

England and Wales

Cited by:

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

Landlord and Tenant, Insolvency

Updated: 06 August 2022; Ref: scu.81390

Bank of Credit and Commerce International Sa (In Liquidation) (No 8): CA 2 Oct 1996

Not all debts which were eligible for proof in bankruptcy were also eligible for a set off.
Rose Ljexplained the doctrine of equitable marshallling, saying: ‘The doctrine of marshalling applies where there are two creditors of the same debtor, each owed a different debt, one creditor (A) having two or more securities for the debt due to him and the other (B) having only one. B has the right to have the two securities marshalled so that both he and A are paid so far as possible. Thus if a debtor has two estates (Blackacre and Whiteacre) and mortgages both to A and afterwards mortgages Whiteacre only to B, B can have the two mortgages marshalled so that Blackacre can be made available to him if A chooses to enforce his security against Whiteacre. For the doctrine to apply there must be two debts owed by the same debtor to two different creditors.’
. . and ‘[Marshalling] is never allowed to delay or defeat the creditor with several securities in the collection of his debt and the enforcement of his securities. He is allowed to realise his securities as he pleases’.

Judges:

Rose LJ

Citations:

Gazette 02-Oct-1996, [1996] Ch 245, [1996] 2 BCLC 254, [1996] 2 WLR 631, [1996] 2 All ER 121

Statutes:

Insolvency Rules 1986 4.90

Jurisdiction:

England and Wales

Cited by:

Cited – Szepietowski v The National Crime Agency SC 23-Oct-2013
S owned several propertie in charge to the bank, but the Agency said that each had been acquired with the proceeds of criminal activity. The parties had settled the claim by the grant of a second charge in favour of the Agency. However when that . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Banking, Insolvency, Equity

Updated: 06 August 2022; Ref: scu.78144

Re Dallhold Estates (UK) Pty Ltd: ChD 1992

The court discussed the the receipt and acceptance of a letter of request: ‘The scheme of subsection (5) appears to me to be this. The first step is to identify the matters specified in the request. Secondly, the domestic court should ask itself what would be the relevant insolvency law applicable by the domestic court to comparable matters falling within its jurisdiction. Thirdly, it should then apply that insolvency law to the matters specified in the request, notwithstanding that on this hypothesis, those are matters which would not, or might not, otherwise fall within its jurisdiction by reason of some foreign element.’

Judges:

Chadwick J

Citations:

[1992] BCLC 621

Statutes:

Insolvency Act 1986 426(5)

Jurisdiction:

England and Wales

Cited by:

Approved – In Re Bank of Credit and Commerce International Sa, In Re BCCI (Overseas) Ltd (No 9) ChD 11-Aug-1993
An English Court has the jurisdiction and discretion to apply English insolvency law to a foreign registered company. . .
Approved – Hughes and others v Hannover Re Ruckversicherungs-Aktiengesellschaft CA 28-Jan-1997
An insolvency court answering an international call for assistance has the full range of remedies available to it. It may exercise ‘its own general jurisdiction and powers’ as well as the insolvency laws of England and the corresponding laws of the . .
Cited – Al Sabah and Al Sabah v Grupo Torras SA Culmer as trustee of the property of Sheikh Fahad Mohammed Al Sabah, bankrupt PC 11-Jan-2005
PC (Cayman Islands) The claimant complained of an order of the Court of Appeal of the Cayman Islands, requiring him to comply with a letter of request from the Grand Court of the Bahamas.
Held: In earlier . .
Cited – McGrath and others v Riddell and others HL 9-Apr-2008
(Orse In Re HIH Casualty and General Insurance Ltd)
HIH, an Australian Insurance company, became insolvent. An order was sought for the collection and remission of it assets in England under a letter of request from the Australia Court.
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 06 August 2022; Ref: scu.222843

Allders Department Stores Limited (In Administration) -In the Matter of the Insolvency Act 1986: ChD 16 Feb 2005

The Administrators sought directions in relation to the treatment of redundancy payments which will be due if the Administrators terminate the contracts of certain employees of the Companies.
Held: The liability of administrators to pay out for redundancy of unfair dismissal claims by employees during the period of administration was not a proper expense of the administration, and were not to be treated as preferential. Liabilities having priority to the claims of the administrators were wages of salary liabilities adopted after 14 days of appointment. Redundancy and unfair dismissal payments were not wages or salary within the schedule.

Judges:

Mr Justice Collins

Citations:

[2005] EWHC 172 (Ch), Times 02-Mar-2005

Links:

Bailii

Statutes:

Insolvency Act 1986 Sch 6

Jurisdiction:

England and Wales

Insolvency, Employment

Updated: 06 August 2022; Ref: scu.223107

Hofer v Strawson: ChD 31 Mar 1999

The debtor had agreed to buy a company from the petitioner, the price to be payable in instalments by means of post-dated cheques. The debtor alleged misrepresentation and stopped one of the cheques. The petitioner served a statutory demand based on the dishonoured cheque. The district judge dismissed the debtor’s application to set aside the statutory demand, concluding that although the debtor had an arguable claim for damages for misrepresentation such a claim could not amount to a defence to a claim on the dishonoured cheque, and that in consequence it could not provide a ground for setting aside the statutory demand. The debtor appealed.
Held: The appeal failed. the misrepresentation claim did not disclose a genuine triable issue. The claim of set-off could however be made in principle since this would accord with companies court practice.
Neuberger J discussed the meaning of the expression ‘counterclaim, set-off or cross demand’ in the Rule: ‘Fastening upon the words ‘counterclaim, set-off or cross demand’ in r.6.5(4)(a) [counsel for the debtor] contends that although a counterclaim of the sort contemplated in [the debtor’s] evidence could not avail her as a defence against a claim by [the petitioner] for judgment on the cheque, it does provide a basis for setting aside the statutory demand.
In my judgment that argument is correct. First, the difference between set-off on the one hand, and a cross-demand or counterclaim, on the other hand, is as follows.
A set-off is a claim which can be, as its name suggests, set off against another claim, i.e. in practice it operates as a defence to that other claim. On the other hand a counterclaim or cross-demand which is not a set-off is a claim or demand which, although perfectly valid in itself, cannot for some reason be invoked as a set-off or defence to another claim. In my judgment, the way in which the three words are used in r.6.5(4)(a) is such that they have that effect in the context of the rule.
Secondly, it is difficult to give the reference to counterclaim or cross-demand any sensible alternative meaning. If they are limited to counterclaims or cross-demands which act as set-offs there would have been no reason to refer to them. They would have been covered by the simple word ‘set-off’.
Thirdly, some support for this view is to be found in [paragraphs 3 and 4 of the 1987 Practice Direction, which were in identical terms to paragraphs 12.3 and 12.4 of the 1999 Practice Direction].’

Judges:

Neuberger J

Citations:

Gazette 31-Mar-1999, [1999] 2 BCLC 336

Statutes:

Insolvency Rules 1986 6.5(4)(a)

Jurisdiction:

England and Wales

Cited by:

Cited – Bryce Ashworth v Newnote Ltd CA 27-Jul-2007
The appellant challenged a refusal to set aside a statutory demand, in respect of his director’s loan account with the respondent company, saying the court should have accepted other accounts to set off against that debt.
Held: A statutory . .
Cited – Ezekiel and Another v Kohali and Another CA 30-Jan-2009
Each side sought specific performance of a contract set out in a Heads of Agreement document, but one sought an abatement in the price, saying that the seller was unable to deliver the title promised. The seller replied that the document did not . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 06 August 2022; Ref: scu.81424

Re a Debtor: ChD 1997

The creditor appealed the decision to set aside a statutory demand as statute barred.
Held: The appeal was dismissed. Bankruptcy proceedings based on a statutory demand for moneys due under a previous default judgment constituted ‘an action upon a judgment’ within s24(1). Insolvency proceedings constituted a fresh action or proceeding newly brought, of the kind described in Lamb, rather than a proceeding under the judgment previously obtained. Bankruptcy proceedings were not, the judge held, a method of, nor were they akin to, enforcing or executing a judgment outside s24(1). As more than 6 years had elapsed since the default judgment became enforceable, bankruptcy proceedings based on it in the statutory demand would be statute barred by s24(1). It was held that the statutory demand had been rightly set aside by the district judge.

Judges:

Baker J

Citations:

[1997] Ch 310

Statutes:

Limitation Act 1980 24(1)

Jurisdiction:

England and Wales

Cited by:

Cited – Ridgeway Motors (Isleworth) Ltd v Alts Ltd CA 10-Feb-2005
The company appelaed a refusal of the judge to strike out a winding up petition. They said the petition was based upon a judgment which was now time barred. The petitioner replied that such a petition was not an action under the section.
Held: . .
Disapproved – Ridgeway Motors (Isleworth) Ltd v Altis ChD 21-May-2004
The company sought to strike out a winding up petition presented by the respondents, saying a winding up petition was by way of an action, and was barred by statute after six years.
Held: A winding up petition was not an action within the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Limitation

Updated: 06 August 2022; Ref: scu.223039

Hollicourt (Contracts) Ltd (In Liquidation) v Bank of Ireland: ChD 17 Dec 1999

A company’s account was in credit at all times, but was, unknown to the bank, in winding up proceedings. The bank continued to honour cheques, and was found to have been making dispositions of the company’s assets under the section. Accordingly the payments were void and ineffective from the date of the commencement of the winding up.

Citations:

Times 30-Nov-1999, Gazette 17-Dec-1999

Statutes:

Insolvency Act 1986 127

Jurisdiction:

England and Wales

Citing:

Appealed to – Bank of Ireland v Hollicourt (Contracts) Limited CA 20-Oct-2000
A bank continued to pay on cheques presented to it against the company’s bank account even after the presentation of a petition for bankruptcy. The liquidator sought recovery of the amounts paid from the bank as well as the payees. It was held that . .

Cited by:

Appeal from – Bank of Ireland v Hollicourt (Contracts) Limited CA 20-Oct-2000
A bank continued to pay on cheques presented to it against the company’s bank account even after the presentation of a petition for bankruptcy. The liquidator sought recovery of the amounts paid from the bank as well as the payees. It was held that . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Banking

Updated: 06 August 2022; Ref: scu.81446

Re Great Orme Tramways Co: 1934

A claim was made in respect of personal injuries sustained by a passenger when a tram ran out of control. The Company was in insolvent liquidation. A claim for the same amount for the same injuries could be made in contract or in tort.
Held: The unliquidated claim in contract was provable, but not the unliquidated claim in tort.

Citations:

(1934) 50 TLR 450

Jurisdiction:

England and Wales

Cited by:

Cited – In re T and N Ltd and Others, Re Insolvency Act 1986 ChD 14-Dec-2005
The court considered the case of Glenister and similar and said: ‘I accept the submission that these cases are not in point to the issue as regards future asbestos claims. There is no element of discretion as regards such claims. If the ingredients . .
Cited – In Re Berkeley Securities (Property) Ltd ChD 1980
Vinelott J considered the position where tort damages became liquidated by judgment or agreement during the winding-up. He held that in those circumstances the bankruptcy rules imported by section 317 required modification to fit into the scheme of . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Personal Injury, Contract

Updated: 05 August 2022; Ref: scu.641426

In re Islington Metal and Plating Works Ltd: ChD 1983

Section 30 of the 1914 Act provided that ‘demands in the nature of unliquidated damages … shall not be provable in bankruptcy’. Tort claims were therefore excluded as provable debts by the express wording of the Act.

Judges:

Harman J

Citations:

[1984] 1 WLR 14, [1983] 3 All ER 218, [1983] BCLC 215, [1983] Com LR 176

Statutes:

Companies Act 194, Bankruptcy Act 1914 30

Jurisdiction:

England and Wales

Citing:

Disapproved – In Re Berkeley Securities (Property) Ltd ChD 1980
Vinelott J considered the position where tort damages became liquidated by judgment or agreement during the winding-up. He held that in those circumstances the bankruptcy rules imported by section 317 required modification to fit into the scheme of . .

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 05 August 2022; Ref: scu.641424

Mitchell v Carter, In re Buckingham International Ltd: CA 1977

The making of a winding-up order ‘divests the company of the beneficial ownership of its assets’, and those assets become ‘subject to a statutory scheme for distribution among the creditors and members’, who have the right to have them administered by the liquidator ‘in accordance with the statutory scheme’.

Judges:

Millett LJ

Citations:

[1997] 1 BCLC 673

Jurisdiction:

England and Wales

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 05 August 2022; Ref: scu.641422

In Re Berkeley Securities (Property) Ltd: ChD 1980

Vinelott J considered the position where tort damages became liquidated by judgment or agreement during the winding-up. He held that in those circumstances the bankruptcy rules imported by section 317 required modification to fit into the scheme of the winding-up of an insolvent company and did not preclude the admission of the claim for the liquidated sum. The claimant would not be entitled to disturb prior distributions to creditors but would be able, in effect, to catch up with prior distributions out of assets remaining with the liquidator and to participate pari passu in any future distributions.
Vinelott J did not regard it as sensible that an unliquidated claim for damages in tort should be excluded from proof in bankruptcy, although that clearly was the legal position. He regarded it as anomalous, given that an unliquidated claim for damages for breach of contract was admissible to proof but may be just as difficult to ascertain and evaluate.

Judges:

Vinelott J

Citations:

[1980] 1 WLR 1589

Jurisdiction:

England and Wales

Citing:

Cited – Re Great Orme Tramways Co 1934
A claim was made in respect of personal injuries sustained by a passenger when a tram ran out of control. The Company was in insolvent liquidation. A claim for the same amount for the same injuries could be made in contract or in tort.
Held: . .

Cited by:

Disapproved – In re Islington Metal and Plating Works Ltd ChD 1983
Section 30 of the 1914 Act provided that ‘demands in the nature of unliquidated damages … shall not be provable in bankruptcy’. Tort claims were therefore excluded as provable debts by the express wording of the Act. . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 05 August 2022; Ref: scu.641425

In re Fine Industrial Commodities Ltd: ChD 1956

The Court considered the payment of interest to simple contract creditors. The company had been wound up on the ground of insolvency. In the course of the winding up the liquidators brought an action to set aside a debenture. The action was successful and the liquidator recovered sufficient funds to enable him to pay out the contract creditors in full and leave a surplus. The liquidator sought directions from the court as to whether he could pay interest to creditors on the amount of their respective proofs from the commencement of the winding up to the date of payment.
12 It was only if s 33(8) of the Bankruptcy Act was picked up by s 317 of the Companies Act that the simple contract creditors (whose contracts did not entitle them to interest) would be entitled to interest on their respective debts. The judge, Vaisey J, held that s 317 had ceased to have application to the company as soon as it was discovered that there was a surplus.
Vaisey J said: ‘Although for some purposes during the winding-up proceedings this company must have been deemed to have been insolvent, it seems to me that when the time comes for dealing with the surplus it must no longer be deemed to be an insolvent company, but has to be treated as a company which is, and was, and always has been, solvent.’

Judges:

Vaisey J

Citations:

[1956] Ch 256

Statutes:

Companies Act 1948 316 317

Jurisdiction:

England and Wales

Cited by:

Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 05 August 2022; Ref: scu.641423