Dennis Rye Ltd v Bolsover District Council: CA 6 May 2009

Right to raise claim against rates insolvency

The ratepayer company sought leave to appeal and to challenge the use of insolvency proceedings to recover council tax. It said that it had a valid counterclaim.
Held: Leave was refused. ‘A company is not prevented from raising a cross-claim in winding up proceedings simply because it could have raised or litigated the claim before the presentation of the petition or it has delayed in bringing proceedings on the cross-claim. The failure to litigate the cross-claim is not necessarily fatal to a genuine and serious cross-claim defeating a winding up petition. However, in deciding whether it is satisfied that the cross-claim is genuine and serious, the court is entitled to take into account all the relevant circumstances, such as the fact that a company has not even attempted to litigate the cross-claim, or that there are reasons why it has not done so.’

Lord Justice Mummery and Lord Justice Elias
[2009] EWCA Civ 372, Times 19-May-2009
England and Wales
CitedBydand Ltd (In Liquidation) ChD 13-Mar-1997
The applicant sought to have rescinded a winding up order made on 22 January 1997 in respect of a company called Bydand Ltd in respect of liability orders made for arrears of council tax.
Held: The claim failed. Liability orders are orders of . .
CitedSeawind Tankers Corporation v Bayoil SA CA 12-Oct-1998
Although a company admitted a debt, it was nevertheless right to set aside a petition for winding up under that debt, where the company had an unquantified but greater counterclaim within the same proceedings, even if that claim could not presently . .
CitedIn Re A Debtor (No 87 of 1999); Debtor v Johnston ChD 14-Feb-2000
It was possible for a debtor, faced with a statutory demand, to seek to set up a debt against the creditor by way of a set-off and cross-demand even though the claim was against the creditor in a different capacity. Here the creditor claimed in . .
CitedMontgomery v Wanda Modes Ltd ChD 2003
Park J said: ‘The requirement that the debtor must not have been able to litigate his . . cross-claim was not part of the ratio decidendi of Bayoil: in that case there was no dispute that, because (I infer) the whole dispute between the two parties . .

Lists of cited by and citing cases may be incomplete.

Local Government, Insolvency

Updated: 01 November 2021; Ref: scu.341795