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Insolvency - From: 1985 To: 1989

This page lists 32 cases, and was prepared on 08 August 2015.

 
BICC plc -v- Burndy Corp [1985] 1 All ER 417
1985
CA

Insolvency

1 Citers



 
 Carreras Rothmans Ltd -v- Freeman Mathews Treasure Ltd; 1985 - [1985] Ch 207; [1985] 1 All ER 155; [1984] 3 WLR 1016
 
Morris -v- Secretary of State for Employment [1985] ICR 522
1985
EAT

Insolvency, Employment
The claimant's employer had become insolvent, and the claimant sought his unpaid salary amounting to £290. The respondent applied the statutory limit of £140.00, and then deducted tax and NI. Held: M's appeal failed. The statutory limit applied to the gross amount to be paid. The calculation was correct.
Employment Protection (Consolidation) Act 1978 122(5)
1 Citers


 
In Re Pittortou (a bankrupt) [1985] All ER 285
1985
ChD
Scott J
Equity, Land, Insolvency
H and W charged the property to secure the H's bank account. The account was used both for his business and for payment of expenses relating to the matrimonial home. H was adjudicated bankrupt. Held: Scott J said that where payments had been made for the joint benefit of the household, they must be paid from the net proceeds before division. However an equity of exoneration applied to payments made purely for business purposes and for H's sole benefit, and these were to be deducted only from H's share.
Exoneration depended on the presumed intention of the parties. To apply, it would be necessary to demonstrate that (a) the spouse joined in a charge over jointly owned property; (b) the spouse did so for the purposes of the bankrupt; and (c) the money must have been borrowed and used for the bankrupt's sole benefit.
The court set out a definition of an equity of exoneration: "if the property of a married woman is mortgaged or charged in order to raise money for the payment of her husband's debts, or otherwise for his benefit, it is presumed, in the absence of showing an intention to the contrary, that she meant to charge her property merely by way of security, and in such case, she is in the position of a surety, and is entitled to be indemnified by the husband, and to throw the debt primarily on his estate to the exoneration of her own."

 
In re Highfield Commodities Ltd [1985] 1 WLR 149; [1984] BCLC 623
1985
ChD
Sir Robert Megarry V-C
Company, Insolvency
The court's discretion in appointing provisional liquidators is unfettered provided it is exercised in a "proper judicial manner". Sir Robert Megarry V-C said: 'I would respectfully express my complete agreement with the view taken by [the judge]. I do not think that the old authorities, properly read, had the effect of laying down any rule that the power to appoint a provisional liquidator is to be restricted in the way for which Mr Burke-Gaffney contends. No doubt a provisional liquidator can properly be appointed if the company is obviously insolvent or the assets are in jeopardy; but I do not think that the cases show that in no other case can a provisional liquidator be appointed over a company's objection . . Section238 . . is in quite general terms. I can see no hint in it that it is to be restricted to certain categories of cases. The section confers on the court a discretionary power, and that power must obviously be exercised in a proper judicial manner. The exercise of that power may have serious consequences for the company, and so a need for the exercise of the power must overtop those consequences" . . but in the case of a public interest petition, "the public interest must be given full weight".
The general practice is for an undertaking as to damages to be given upon an ex parte application for provisional liquidators, but such an undertaking would not be required on an inter partes application. A cross-undertaking as to damages might not be required where "The Secretary of State was seeking to enforce the law, or was acting selflessly in the performance of a public duty directly or impliedly imposed by statute . ."
Companies Act 1985
1 Cites

1 Citers



 
 American Express International Banking Corporation -v- Hurley; ChD 1985 - [1985] 3 All ER 564; [1986] BCLC 52
 
In re London Metallurgical Co [1895] 1 Ch 758
1985

Vaughan-Williams J
Insolvency, Costs
A costs order made against liquidators arising from proceedings they had taken, will usually have priority over the general expenses of the action. The list of expenses said nothing about the costs of litigation incurred by the liquidator or awarded against him. Costs awarded to a successful litigant had been recoverable in priority to the general costs of the liquidation. Rule 31 of the 1890 Insolvency rules did not change this practice.
1 Citers



 
 Cornhill Insurance plc -v- Improvement Services Ltd; 1986 - [1986] 1 WLR 1; [1986] BCLC 26

 
 Ratford -v- Northavon District Council; CA 1986 - [1987] QB 357

 
 Gomba Holdings -v- Homan; 1986 - [1986] 1 WLR 1301

 
 Secretary of State for Employment -v- Spence; CA 1986 - [1986] ICR 651; [1987] QB 179
 
In re Keypak Homecare Ltd [1987] BCLC 409
1987
ChD
Millett J
Insolvency, Company
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: 'The section authorises the court to remove the liquidator 'on cause shown'. That is not the same as saying 'if the court shall think fit'. There is a burden on the applicant to show why the liquidator should be removed.' However, the words of the statute are very wide, and it would be dangerous and wrong for a court to seek to limit or define the kind of cause required; and it may be appropriate to remove a liquidator even though nothing can be said against him, either personally or in his conduct of the particular liquidation.
Insolvency Act 1986 108
1 Cites

1 Citers



 
 In re Charge Card Services Ltd; ChD 1987 - [1987] Ch 150

 
 Paterson -v- Aggio; CA 1987 - [1987] 2 EGLR 127

 
 Byblos Bank SAL -v- Al-Khudhairy; CA 1987 - [1987] BCLC 232
 
Midland Bank plc -v- Pike [1988] 2 All ER 434
1988


Trusts, Insolvency

1 Citers



 
 Gomba Holdings UK Ltd -v- Minories Finance Ltd; CA 1988 - [1988] 1 WLR 1231; [1989] 1 All ER 261; (1988) 5 BCC 27; [1989] BCLC 115
 
Re A E Realisations Ltd [1988] 1 WLR 200
1988

Vinelott J
Insolvency
Vinelott J said: "decisions on the Act of 1883 and on the Act of 1914 are . . of direct authority on the construction" of the equivalent provisions for disclaimer by the liquidators of companies.
Bankruptcy Act 1883
1 Citers


 
Re Jogia (A Bankrupt) [1988] 1 WLR 484; [1988] 2 All ER 328
1988

Nicolas Browne-Wilkinson V-C
Insolvency, Litigation Practice
Application was made for leave to serve proceedings out of the jurisdiction in a claim for money had and received in connection with payments made to the defendant after a receiving order. Held: A plaintiff who has been given permission to serve out cannot resist an application challenging the jurisdiction by pleading a new cause of action. A claim for unjust enrichment, in the absence of a contractual relationship between the parties, and other than claims to land, are governed by the law of the place of enrichment.
Sir Nicolas Browne-Wilkinson V-C said (obiter): "As at present advised, I am of the view that quasi-contactual obligations of this kind arise from the receipt of the money. I find it difficult to see how such obligation can be said to be 'made' or 'arise' in any place other than that of receipt. As to the proper law, Dicey & Morris, the Conflict of Laws, 10th edn. (1980), p.921 expresses the view that, save in cases where the obligation to repay arises in connection with a contract or an immoveable, the proper law of the quasi-contact is the law of the country where the enrichment occurs. This accords with the American Restatement and seems to me to be sound in principle."
1 Cites

1 Citers


 
Re Permanent Houses (Holdings) Ltd [1988] BCLC 563
1988


Insolvency

1 Cites

1 Citers


 
Re Continental Assurance Co of London plc (No.2) [1988] 1 BCLC 583
1988

Evans-Lombe J
Litigation Practice, Insolvency
Directors of a company in creditors' voluntary liquidation sought to strike out an application by the liquidators seeking relief against them for wrongful trading and breach of fiduciary duty. They asserted that the liquidators' application was procedurally irregular since it had been made by way of ordinary application, rather than by an originating application. Held: The proceedings should have been started by originating application: "The practice of the court, as I understand it, is this. Where there has been a compulsory winding up, insolvency proceedings have started pursuant to which applications can be made by way of ordinary application. It is the practice to use ordinary applications where the relief being sought is relief particular to the liquidator or to the general body of creditors as represented by him. Thus, applications to set aside transactions for preference are normally brought where there is a compulsory liquidation by ordinary application. The position is different where, as here, the winding up is a creditors' voluntary winding up. That, notwithstanding the submissions of Mr Atherton, is not, in my judgment, a proceeding so as to constitute an insolvency proceeding within r7. It does not seem to me that it is possible to say that where, in a creditors' voluntary liquidation, an application in another matter has been made by way of originating application, all subsequent court proceedings can be commenced by ordinary application using the number which the first originating application has taken. It seems to me that in a creditors' winding up, where it is intended to bring proceedings in a particular matter against particular respondents or defendants, an originating application should be issued. It is not without significance that the fee payable on a originating application is considerably greater than that on an ordinary application. These proceedings should have been commenced by originating application."
1 Citers


 
Re Gosscott (Groundworks) Ltd [1988] BCLC 363
1988

Mervyn Davies J
Insolvency, Costs
The court had jurisdiction under section 51 to order that the costs of administration proceedings overtaken by a compulsory liquidation could be ordered to be treated as costs in the winding-up.
Supreme Court Act 1981 51
1 Citers



 
 Smith (a bankrupt) -v- Braintree District Council; HL 1989 - [1989] 3 All ER 897; [1989] 3 WLR 1317; [1990] 2 AC 215
 
In re Harris Simons Construction Limited [1989] 1 WLR 368
1989
ChD
Hoffmann J
Insolvency
The section gives the court jurisdiction to make an administration order if it "(a) is satisfied that a company is or is likely to become unable to pay its debts" and "(b) considers that the making of an order … would be likely to achieve" one or more of the purposes specified in s8(3). The court had to consider the meaning of the word likely. Held: ‘likely’ connotes probability but the particular degree of probability intended must be gathered from qualifying words (very likely, quite likely, more likely than not) or context. It cannot be a misuse of language to say that something is likely without intending to suggest that the probability of its happening exceeds 0.5. The legislature seemed to intend to set a modest threshold of probability to found jurisdiction and to rely on the court’s discretion not to make orders in inappropriate cases.
Insolvency Act 1986 8(1)
1 Citers



 
 In Re Gilmartin (A Bankrupt); 1989 - [1989] 1 WLR 513

 
 Bradley -v- Eagle Star Insurance Co Ltd; HL 1989 - [1989] AC 957; [1989] 1 All ER 961; [1989] 1 Lloyds Rep 465; [1989] 2 WLR 568
 
In re Konigsberg (A Bankrupt) [1989] 1 WLR 1257
1989

Peter Gibson J
Litigation Practice, Legal Professions, Insolvency
The court considered in the context of legal privilege the distinction between the disclosure of a document and its use at trial. Parties who grant a joint retainer to solicitors do not retain any confidence as against one another.
A bankrupt's entitlement to legal professional privilege vests in the trustee so that neither the bankrupt nor the bankrupt's solicitor can claim privilege under examination.
Peter Gibson J said: "Finally I return to the first ground on which Mr Walker relies for his submission that privilege cannot be asserted by Mrs Konigsberg against the trustee. Mr Walker referred me to the following passage in Phipson on Evidence, 13th ed., para.15-11, under the heading 'Joint retainer': 'When two parties employ the same solicitor, the rule is that communications passing between either of them and the solicitor, in his joint capacity, must be disclosed in favour of the other - e.g. a proposition made by one, to be communicated to the other; or instructions given to the solicitor in the presence of the other; though it is otherwise as to communications made to the solicitor in his exclusive capacity.'
Thus if the communication with or from the solicitor in his joint capacity must be disclosed, privilege cannot be asserted by one of the two parties against the other in proceedings against each other. This is established by Shore v. Bedford (1843) 5 M. & G. 271. In that case the plaintiff having a claim against the defendant went with the defendant to the plaintiff's solicitor, who agreed to write on the defendant's behalf to a third party. The defendant made a statement in the plaintiff's presence to the solicitor and the plaintiff subsequently brought an action against the defendant. It was held that the statement was not a privileged communication and questions could be asked of the solicitor's clerk as to what had been said."
1 Citers


 
In re a Debtor (No 1 of 1987), ex parte the Royal Bank of Scotland [1989] 1 WLR 271; [1989] 2 All ER 46
1989
CA
Lord Justice Nicholls
Insolvency, Equity
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 Nicholls said: "The question arising on this appeal concerns the exercise by the court of its power to set aside a statutory demand "on other grounds" within sub-paragraph (d) [of rule 6.5(4)] In my view, the right approach to paragraph (4) of rule 6.5 is this. Under the Act, a statutory demand which is not complied with founds the consequence that the debtor is regarded as being unable to pay the debt in question or, if the debt is not immediately payable, as having no reasonable prospect of being able to pay the debt when it becomes due. That consequence, in turn, founds the ability of the creditor to present a bankruptcy petition because, under section 268(1), in the absence of an unsatisfied return to execution or other process, a debtor's inability to pay the debt in question is established if, but only if, the appropriate statutory demand has been served and not complied with. When therefore the rules provide, as does rule 6.5(4)(d), for the court to have a residual discretion to set aside a statutory demand, the circumstances which normally will be required before a court can be satisfied that the demand 'ought' to be set aside, are circumstances which would make it unjust for the statutory demand to give rise to those consequences in the particular case. The court's intervention is called for to prevent that injustice."
and "When therefore the rules provide, as does rule 6.5(4)(d), for the court to have a residual discretion to set aside a statutory demand, the circumstances which normally will be required before a court can be satisfied that the demand "ought" to be set aside, are circumstances which would make it unjust for the statutory demand to give rise to those consequences in the particular case. The court's intervention is called for to prevent that injustice.
This approach to sub-paragraph (d) is in line with the particular grounds specified in sub-paragraphs (a) to (c) of rule 6.5(4). Normally it would be unjust that an individual should be regarded as unable to pay a debt if the debt is disputed on substantial grounds: sub-paragraph (b). Likewise, if the debtor has a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt: sub-paragraph (a). Again, if the creditor is fully secured: sub-paragraph (c)."

and "Nevertheless, applying the approach which I have indicated above as the correct approach to these statutory provisions, in my view it by no means follows from the existence of these defects that this statutory demand ought to be set aside. The court will exercise its discretion on whether or not to set aside a statutory demand, having regard to all the circumstances. That must require a court to have regard to all the circumstances as they are at the time of the hearing before the court. There may be cases where the terms of the statutory demand are so confusing or so misleading that, having regard to all the circumstances, justice requires that the demand should not be allowed to stand. There will be other cases where, despite such defects in the contents of the statutory demand, those defects have not prejudiced and will not prejudice the debtor in any way, and to set aside the statutory demand in such a case would serve no useful purpose. For example a debtor may be wholly unable to pay a debt which is immediately payable, either out of his own resources, or with financial assistance from others. In such a case the only practical consequence of setting aside a statutory demand would be that the creditor would immediately serve a revised statutory demand, which also and inevitably would not be complied with. In such a case the need for a further statutory demand would serve only to increase costs. Such a course would not be in the interests of anyone." and
"In these circumstances I am in no doubt that, despite the mistakes in this statutory demand and the use strictly of the incorrect form, and despite the debtor not being aware of the precise amount of the debt when the demand was served on him, justice does not require that this statutory demand should be set aside. I can see no injustice in the consequences which flow from non-compliance with a statutory demand being permitted to flow in this case, despite the existence of those features."
Insolvency Rules 1986 (1986 No 1925) 6.1 6.5(4)(d) - Police Act 1996 2
1 Citers


 
In re Primlaks (UK) Ltd [1989] BCLC 734
1989

Vinelott J
Litigation Practice, Insolvency
A prerequisite to making an administration order under section 8(1) is that the court considers making such an order 'would be likely to achieve' one of the statutory purposes. Held: This required the court to be satisfied there is a 'prospect sufficiently likely in the light of all the other circumstances of the case to justify making the order'.
Insolvency Act 1986 8(1)
1 Citers


 
Re Offshore Ventilation [1989] 5 BCC 160
1989


Agency, Insolvency
The position of agency of receivers is a real one, even though it has some peculiar incidents.
1 Citers



 
 Capita Financial Group Ltd -v- Rothwells Ltd; 20-Apr-1989 - (1989) 15 ACLR 348

 
 Bristol Airport Plc and Another -v- Powdrill and Others; CA 21-Dec-1989 - [1990] 2 WLR 1362; [1990] Ch 744; [1990] BCLC 585
 
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