Debts were, on the one side, the liability of the company to the Inland Revenue and the Department of Health and Social Security for PAYE and National Insurance contribution respectively and, on the other, the liability of HM Customs and Excise to the company for excess input VAT. All the debts were due and payable at the insolvency date.
Held: The court rejected an argument that the mutuality required by the statute meant that the claims sought to be set off ‘must be such as result in pecuniary liabilities arising out of contract’. He said that the type of acts or events giving rise to the liabilities were immaterial provided that those liabilities were ‘commensurable’, that is to say, capable of being expressed in money.
Judges:
Brightman J
Citations:
[1978] Ch 162
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.
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 13 May 2022; Ref: scu.196881
