Henderson v 3052775 Nova Scotia Ltd: HL 10 May 2006

The liquidator had sought to set aside a transfer of company property as having been made at an undervalue. The defence was that the buyer had assumed some of the company’s debt in addition, and in effect that it was a preference on other creditors. The court had then issued an interlocutor in effect debarring the defence as ineffective. The company now appealed against that interlocutor.
Held: ‘the rule [2.2] envisages that the court may look beyond the pleadings and consider what, in substance, each of the parties and, more particularly, the defender is saying. It is this power which allows the court to deal with a party who tries to use his written pleadings not to present a real defence but to throw up a smokescreen of supposed fact behind which he can delay the progress of an action, or part of an action, which he is bound to lose. ‘ and ‘considering a motion for summary decree is entitled to proceed not merely on what is said in the defences, but on the basis of any facts which can be clarified, from documents, articles and affidavits, without trespassing on the role of the proof judge in resolving factual disputes after hearing the evidence. The judge can grant summary decree if he is satisfied, first, that there is no issue raised by the defender which can be properly resolved only at proof and, secondly, that, on the facts which have been clarified in this way, the defender has no defence to all, or any part, of the action. ‘ Nevertheless, on th epapers before the court it was quite impossible to say that the defence must fail.
Lord Bingham of Cornhill, Lord Hoffmann, Lord Hope of Craighead, Lord Rodger of Earlsferry, Lord Mance
[2006] UKHL 21, 2006 SCLR 626
Bailii
Insolvency Act 1986 21.2, Rules of the Court of Session 21.2
England and Wales
Citing:
Appeal fromHenderson v 3052775 Nova Scotia Limited IHCS 18-Feb-2005
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See AlsoHenderson CA (the Liquidator of Letham Grange Development Co Ltd) v 3052772 Nova Scotia Limited OHCS 9-Dec-2003
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See AlsoMathew Purdon Henderson ( Liquidator of Letham Grange Development Co Ltd) v 3052775 Nova Scotia Ltd OHCS 21-Apr-2004
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CitedJamieson v Jamieson HL 1952
The house discussed the test for relevancy of a pursuer’s averments.
Held: A case should only be dismissed on grounds of relevancy and specification if it would necessarily fail at proof.
Lord Normand: ‘The true proposition is that an . .
CitedFrew v Field Packaging Scotland Ltd 1994
Rule 21.2(4) gives the court a power to grant the motion, but does not require it to do so where it would not be appropriate in all the circumstances . .
CitedP and M Sinclair v The Bamber Gray Partnership 1987
A motion for summary decree is not intended to replace a hearing on the procedure roll which is designed for the disposal of legal questions requiring more detailed and extensive legal debate. . .
CitedKeppie v The Marshall Food Group Ltd 1997
In a motion for summary decree, ‘The court is not concerned with forecasting the outcome of a proof.’ . .
CitedThree Rivers District Council and Others v Governor and Company of The Bank of England (No 3) HL 22-Mar-2001
Misfeasance in Public Office – Recklessness
The bank sought to strike out the claim alleging misfeasance in public office in having failed to regulate the failed bank, BCCI.
Held: Misfeasance in public office might occur not only when a company officer acted to injure a party, but also . .

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Updated: 08 April 2021; Ref: scu.241620