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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Insolvency - From: 1980 To: 1984

This page lists 26 cases, and was prepared on 08 August 2015.

 
In re Gray's Inn Construction Co Ltd [1980] 1 WLR 711
1980
CA
Buckley, Goff LJJ and Sir David Cairns
Equity, Insolvency, Banking
After the presentation of a petition for the winding up of the company moneys were paid in and out of the company's bank account which was overdrawn. The liquidator issued a summons for a declaration that the amounts credited and/or debited to the account by the bank during the relevant period constituted dispositions of the company's property which were void under s.227 of the Companies Act 1948. The liquidator further sought an order that the bank pay those moneys to the liquidator as constituting dispositions of the property of the company. Held: In the exercise of the court's discretion whether to make a validation order, the overriding principle is that the court must always do its best to ensure that the interests of the unsecured creditors will not be prejudiced. On an application for a validation order in the period between the presentation of the petition and its hearing, the court will need to be satisfied that it is in the interests of the creditors generally that the transaction should be allowed to proceed.
Buckley LJ said: "When a customer's account with his banker is overdrawn he is a debtor to his banker for the amount of the overdraft. When he pays a sum of money into the account, whether in cash or by payments in of a third party's cheque, he discharges his indebtedness to the bank pro tanto. There is clearly in those circumstances, in my judgment, a disposition by the company to the bank of the amount of the cash or of the cheque."
After stating that in the case before the court the company's account with the bank was overdrawn, he said: "Mr Heslop does not dispute that all payments out of the company's account to third parties, not being payments to agents of the company as such are dispositions of the company's property; . . That all such payments out must be dispositions of the company's property is, I think, indisputable . ."
Companies Act 1948 227
1 Citers


 
In re Mesco Properties Ltd [1980] 1 WLR 96
1980
CA
Buckley LJ, Bridge LJ, Templeman LJ
Corporation Tax, Insolvency
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 "necessary disbursement" for the purposes of the winding-up rules.
1 Cites

1 Citers


 
Stonegate Securities Ltd v Gregory [1980] Ch 576
1980
CA
Buckley LJ
Company, Insolvency
The practice of the Companies Court is to dismiss a creditor's petition based on a debt which is disputed by the company in good faith and on substantial grounds. Buckley LJ said: "If the Company in good faith and on substantial grounds disputes any liability in respect of the alleged debt, the petition will be dismissed, or if the matter is brought before a court before the petition is issued, its presentation will in normal circumstances be restrained. That is because a winding up petition is not a legitimate means of seeking to enforce payment of a debt which is bona fide disputed."
1 Citers



 
 Bacal Contracting Ltd -v- Modern Engineering (Bristol) Ltd; 1980 - [1980] 2 All ER 655
 
Freightex Ltd -v- International Express Co. Ltd Transcript No. of 1980; Unreported, 15 April 1980
15 Apr 1980
CA
Dunn LJ, Stephenson L.J. and Sir Stanley Rees
Insolvency, Litigation Practice
Dunn L.J: "I do not think that a liquidator or an assignee from a liquidator should be put on terms either by way of security for costs or otherwise as a condition of enforcing an assigned claim." the other court members thought it was inappropriate to impose such a condition in that particular case.
1 Citers



 
 In Re Laceward Ltd; ChD 1981 - [1981] 1 WLR 133

 
 Re A Debtor (Order in Aid No 1 of 1979) ex parte Viscount of the Royal Court of Jersey; 1981 - [1981] Ch 384

 
 In re Lowrie; 1981 - [1981] 3 All ER 353
 
In re Holliday [1981] 1 Ch 405
1981
CA
Sir David Cairns, Buckley LJ
Family, Insolvency
A property adjustment order cannot be made against a bankrupt former spouse because the property of the bankrupt vests in the trustee in bankruptcy against whom an order under section 24 cannot be made. It was highly unlikely that postponement of payment of the debts would cause any great hardship to any of the creditors.
Law of Property Act 1925 30
1 Citers


 
In re Christonette International Ltd [1982] 1 WLR 1245
1982


Company, Insolvency
In the case of a compulsory liquidation the date on which a floating charge is crystallised was the date on which the winding up order was made and not the date on which the winding up petition was presented.
1 Citers


 
In re Lines Bros Ltd [1983] Ch 1; [1982] 2 WLR 1010; [1982] 2 All ER 183
1982
CA
Brightman LJ
Insolvency, Company
The liquidators in a creditors voluntary liquidation converted foreign currency debts of the company into Sterling at the rate of exchange prevailing at the date of the resolution to wind up. As a result of the depreciation of Sterling against the Swiss Franc, the creditor bank, on converting their Sterling dividends into Swiss Francs, received only 58.7% of the 18.5 million Swiss Francs owed to them by the company. The bank sought to recover the loss from the surplus after paying all the provable debts. The liquidators applied to the English court for directions. Held: The bank's foreign currency debt was properly converted at the date the resolution was passed to wind up the company and they were not entitled to further participate in the assets of the company.
A winding up petition is sui generis, being in the nature of a wider legal proceeding available for the collective enforcement of the admitted or proved debts of the company for the benefit of the general body of creditors on a pari passu basis. The court may incidentally in the course of bankruptcy proceedings have to establish rights which are challenged: proofs of debt may be rejected; or there may be a dispute over whether or not a particular item of property belonged to the debtor and is available for distribution. There are procedures by which these questions may be tried summarily within the bankruptcy proceedings or directed to be determined by ordinary action. But these are incidental procedural matters and not central to the purpose of the proceedings.
1 Citers



 
 Re Overmark Smith Warden Ltd; ChD 1982 - [1982] 1 WLR 1195

 
 Roberts Petroleum Ltd -v- Bernard Kenny Ltd (in liquidation); CA 1982 - [1982] 1 WLR 301; [1982] 1 All ER 685; [1981] EWCA Civ 10
 
Victoria Housing Estates Ltd -v- Ashpurton Estates Ltd [1982] 3 All ER 66; [1982] 3 WLR 964
1982
CA

Company, Insolvency
Although the Court has jurisdiction to extend the time for registration of a charge, its settled practice is not to do so when the company that granted the charge has already entered into liquidation. An application to extend the time for registration should be made on realisation that the deadline had been missed, and any delay may be taken to indicate a calculation fatal to the application.
The rationale of the rule was explained: "Ever since [the decision of Buckley J in Re Joplin Brewery Co Ltd [1902] 1 Ch 79] it has been the practice to insert in an order extending the time for registration some such words as: 'but that this order be without prejudice to the rights of parties acquired prior to the time when the debentures shall be actually registered.' The reason for the proviso is as valid today as it was then. Such an application would be made either ex parte by the chargor company, which had the statutory duty to register, or by the chargee, in which case the company would be joined as the only respondent, if there were any respondent at all. It was not the practice to advertise for creditors and to make one of them a respondent. Consequently, it was necessary to protect persons whose rights would otherwise be overridden in their absence . .
It soon became established that, so long as the company was a going concern at the date of registration, the proviso did not protect, and was not intended to protect, an unsecured creditor who had lent money at a time when the charge should have been but was not registered . . The reason for this was that such unsecured creditor could not have intervened to prevent payment being made to the lender whose charge was not registered (whom we will call 'the unregistered chargee'). Nor could such unsecured creditor have prevented the creation of a new charge, duly registered, to take the place of the unregistered charge. The proviso was intended to protect only rights acquired against, or affecting, the property comprised in the unregistered charge, in the intervening period between the date of the creation of the unregistered charge and the registration of such charge. Such persons would include a subsequent chargee of the relevant property, a creditor who has levied execution against the relevant property, and an unsecured creditor if, but only if, the company has gone into liquidation before registration is effected. Once the company has gone into liquidation, the existing unsecured creditors are interested in all the assets of the company, since the liquidator is bound by statute to distribute the net proceeds pari passu among the unsecured creditors, subject to preferential debts. The assets of the company are at that stage vested in the company for the benefit of its creditors. The unsecured creditors are in the nature of cestuis que trust with beneficial interests extending to all the company's property.
It follows from this approach that the court must invariably refuse to extend the time for registration once the company has gone into liquidation. If an order extending time were made and the proviso included, registration would be of no assistance whatever to the unregistered chargee because the unsecured creditors at that stage would be protected by the proviso. Such an order after liquidation would be futile and will be refused . .
The position accordingly became firmly established that the court (i) invariably adds to an order extending time the proviso which we have mentioned and (ii) will not make an order once liquidation has supervened, because the effect of the proviso would be to render the order futile. This is a matter of discretion and not of law. It is possible to imagine a case, for example where fraud is involved, in which the court might extend the time for registration after the commencement of liquidation and omit the proviso which would render the order futile; we do not know of such a case in practice, and certainly the instant case does not fall into the category of fraud."
1 Cites

1 Citers


 
Re Abbot (A Bankrupt), ex parte Trustee Of The Property Of The Bankrupt -v- Abbot [1983] 1 Ch 45; [1983] 1 Ch 45
1983
QBD
Peter Gibson J, Sir Robert Megarry V-C
Insolvency
An ancillary relief order was made in December 1978, following a compromise agreement. It provided for the sale of the former matrimonial home and the payment to the wife from the proceeds of sale of £18,000. The husband was adjudicated bankrupt in May 1980. The trustee applied for an order declaring that the order was void under Section 42(1) of the 1914 Act, which read: "Any settlement of property not being a settlement made in favour of a purchaser or incumbrancer in good faith and for valuable consideration shall if the settler becomes bankrupt within 2 years after the date of settlement, be void against the Trustee in the bankruptcy." A settlement included any conveyance or transfer of property. Held: The had been dismissed because although there had been a settlement within Section 42(1), the wife was a purchaser for valuable consideration having given up her right under Section 24 for what the husband had given her. A submission by the Trustee that Section 42(1) of the 1914 Act would only not apply where proprietary interests were ordered to be transferred between the parties to ancillary relief proceedings of substantially equivalent value was rejected.
Sir Robert Megarry V-C described valuable consideration as being something "which has a real and substantial value, and not one which is merely nominator trivial or colourable" and concluded that "a claimant who relinquishes a claim in return for a substantial sum of money is a purchaser of that sum for valuable consideration whether that sum is an accurate or inaccurate estimate of what the court would award".
Bankruptcy Act 1914 42(1) - Matrimonial Causes Act 1973 42(1)
1 Cites

1 Citers



 
 Re a Company No 001573 of 1983; ChD 1983 - [1983] 1 BCC 98937
 
In re Abbott [1983] 1 Ch 45
1983
ChD
Peter Gibson J
Family, Insolvency, Land
W divorced H, and under a property adjustment order made by consent, the jointly owned matrimonial home was transferred to her outright. H was made bankrupt less than two years later, and the trustee sought a declaration that the consent order or its implementation was void under section 42 which protected only a settlement made to a purchaser in good faith and for valuable consideration. The court dismissed the application saying the wife was such a purchaser. The trustee appealed. Held: The appeal was dismissed. The court accepted the submission of the wife's counsel that the compromise of a bona fide claim for ancillary relief can constitute the claimant a purchaser for valuable consideration of what he receives under the compromise, even though no interest in property is transferred by the purchaser and the consideration provided by the purchaser is not measurable in money. The Vice-Chancellor agreed.
Bankruptcy Act 1914 42(1)
1 Citers



 
 Roberts Petroleum Ltd -v- Bernard Kenny Ltd; HL 2-Jan-1983 - [1983] 2 AC 192; [1983] 1 All ER 564; [1983] BCLC 28; [1983] 2 WLR 305
 
Hewitt -v- Court (1983) 149 CLR 639; [1983] HCA 7
15 Mar 1983


Commonwealth, Contract, Insolvency
Austlii (High Court of Australia) Lien - Equitable - Contract for provision of work, labour and materials - Progress payments - Whether lien obtained over unfinished object - Whether dependent upon right to specific enforcement of contract.
Contract - Character - Work, labour and materials or sale of goods.
Bankruptcy - Preference - Contract for prefabrication of house - Risk with builder until practical completion - Property not to pass until full payment of price - Progress payments - Builder placed in liquidation before completion - Prior agreement for purchaser to pay for work done after last progress payment and take unfinished house - Whether preference - Companies Act 1961 (W.A.), section 293 - Bankruptcy Act 1966 (Cth), s. 122.
1 Citers

[ Austlii ]
 
Ferdinand M.J.J. Duijnstee -v- Lodewijk Goderbauer R-288/82; [1983] EUECJ R-288/82; [1983] ECR 3663
15 Nov 1983
ECJ

European, Insolvency, Intellectual Property
A liquidator sought to recover a patent from an employee of the company, a claim held not to be excluded from the Convention.
Europa 1. The Convention of 27 September 1968, which seeks to determine the jurisdiction of the courts of the contracting states in civil matters, must override national provisions which are incompatible with it. 2. Article 19 of the Convention of 27 September 1968 requires the national court to declare of its own motion that it has no jurisdiction whenever it finds that a court of another contracting state has exclusive jurisdiction under article 16 of the convention, even in an appeal in cassation where the national rules of procedure limit the court ' s reviewal to the grounds raised by the parties. 3. The term "proceedings concerned with the registration or validity of patents "contained in article 16 ( 4 ) of the convention of 27 september 1968 must be regarded as an independent concept intended to have uniform application in all the contracting states. 4. The term "proceedings concerned with the registration or validity of patents" does not include a dispute between an employee for whose invention a patent has been applied for or obtained and his employer, where the dispute relates to their respective rights in that patent arising out of the contract of employment.
1 Cites

1 Citers

[ Bailii ]

 
 In re a Company (Bond Jewellers); ChD 21-Dec-1983 - [1986] BCLC 261
 
Waters -v- Widdows [1984] VR 503
1984


Insolvency

1 Citers


 
The Padre Island [1984] 2 Lloyd’s Rep 408
1984


Insurance, Insolvency, Arbitration
The 1930 Act creates a statutory assignment of any rights of action in a case where the assured has become bankrupt or been wound up, the party to whom the benefit of a right of action under the liability insurance contract has been transferred may only operate that right in accordance with an arbitration agreement in the contract of insurance even if that agreement is expressed to refer only to the parties to the contract of insurance and not in terms wide enough to cover a statutory assignee.
Third Parties (Rights against Insurers) Act 1930
1 Citers


 
Re a Company (No 003729 of 1982 ) [1984] 1 WLR 1090; [1984] 3 All ER 78
1984
ChD
Mervyn Davies J
Insolvency, Company
A creditor had claimed that the company owed it some £12,000 for work done by the creditor for the company. The company refused to pay that sum but offered to pay some £2,000. Two years later the creditor served a statutory demand for the original sum claimed and, when there was no payment, presented a winding-up petition. The company then paid the sum which it had previously offered to pay. An issue in the proceedings was whether the company had neglected to pay the sum demanded and it was argued by the creditor that the company had neglected to pay a sum exceeding £200, the then statutory minimum, when it did not pay the sum it had previously offered and subsequently paid. Held: The creditor was not in a position to make a genuine demand for a specified sum. A winding-up order may not be made on a debt which is disputed in good faith by the company.
1 Citers


 
Barclays Bank Ltd -v- TOSG Trust Fund Ltd [1984] AC 626; [1984] 1 All ER 628; [1984] BCLC 1; [1984] 2 WLR 49
1984
CA
Oliver LJ, Slade LJ
Insolvency, Equity
Oliver LJ acceded to a submission that the rule better be called the rule against double dividends, for its object was to absolve the liquidator from paying out two dividends on what was essentially the same debt. Because overlapping liabilities resulted from separate and independent contracts with the debtor, the basis of the liability by itself was not determinative of whether the rule applied. Oliver LJ said: "The test is in my judgment a much broader one which transcends a close jurisprudential analysis of the persons by and to whom the duties are owed. It is simply whether the two competing claims are, in substance, claims for payment of the same debt twice over . . for the moment I accept [the] broad general proposition that the rule against double proofs in respect of two liabilities of an insolvent debtor is going to apply wherever the existence of one liability is dependant upon and referable only to the liability to the other and where to allow both liabilities to rank independently for dividend would produce injustice to the other unsecured creditors."
Slade LJ said that the payment of more than one dividend in respect of what was in substance the same debt would give the relevant proving creditors a share of the available assets larger than the share properly attributable to the debt in question.
1 Citers


 
Garland -v- Ralph Pay and Ransom [1984] 2 EGLR 147
1984

Nicholls J
Land, Insolvency
Receivers taking possession of a property are not under an obligation to make the property more attractive before marketing it.
1 Citers


 
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