The appellant had guaranteed his brother’s loan from the respondent, and the guarantee having been called in and unpaid, he had been made bankrupt. He now appealed saying that the guarantee debt, even though of a fixed amount could not form the basis of a statutory demand without action being taken on the debt first.
Held: The appeal failed. The possible inclusion of a damages liability as the basis of a good petitioning creditor’s debt cannot be based on the extended definition of ‘bankruptcy debt’ in s.382(1) and (4). It has to be found in the practice and decisions of the court as to what constitutes a debt in a liquidated sum for the purposes of a creditor’s petition. A debt for a liquidated sum must be a pre-ascertained liability under the agreement which gives rise to it. That was not the case here, and there was nothing in the wording of the deed to displace the standard result.
Ward, Moses, Patten LJJ
[2011] EWCA Civ 1286, [2012] BPIR 145, [2011] NPC 117
Bailii
Insolvency Act 1986 267 322(a) 382
England and Wales
Citing:
Cited – Hope v Premierpace (Europe) Ltd 1999
A claim for an account and payment was not one for debt which could form the subject of a statutory demand. . .
Cited – Lep Air Services v Rolloswin Investments Ltd; Moschi v LEP Air Services HL 1973
The obligation of a guarantor under a contract ‘is not an obligation himself to pay a sum of money to the creditor, but an obligation to see to it that another person, the debtor, does something.’ When a repudiatory breach is accepted by the injured . .
Appeal from – McGuinness v Norwich and Peterborough Building Society ChD 23-Nov-2010
The claimant appealed against his bankruptcy saying that it had followed as statutory demand based upon his alleged default under a guarantee of his brothers mortgage borrowings. He said that such a claim was not a liquidated sum within the 1986 . .
Cited – Socony Mobil Oil Co Inc and others v West of England Ship Owners Mutual Insurance Association Ltd (Padri Island) (No 2); Firma CF-Trade SA v Similar (The ‘Fant’) HL 14-Jun-1990
The House was asked as to the effect of section 1(3) of the 1930 Act on policies including ‘pay or be paid’ clauses.
Held: The central question was whether the condition of prior payment was rendered of no effect by section 1(3) of the Act of . .
Cited – Utterson v Vernon And Others 5-Feb-1790
There had been an agreement to lend to the bankrupt some stock which she undertook to replace. The act of bankruptcy and the declaration of her bankruptcy took place before the stock was replaced. The parties disputed whether the agreement created a . .
Cited – Ex Parte Job Broadhurst In The Matter Of Job Broadhurst 7-Dec-1852
A covenant given by the father of two existing partners to an incoming partner to pay any shortfall in the debts due to the firm below a stated sum and to bear the debts of the existing partners in excess of a stated sum was treated not as a . .
Cited – Owen v Routh And Ogle CCP 27-Jan-1854
The plaintiff alleged the breach of an undertaking to deliver share certificates on a particular day. The defendants said that bankruptcy discharged them from the obligation. The bankruptcy applied to the defendants’ ‘debts and sums of money due or . .
Cited – In Re Dummelow CA 1872
The parties disputed whether a particular creditor was entitled to vote at the first meeting. The section excluded a right to vote in the case of creditors in respect of ‘any unliquidated or contingent debt, or any debt the value of which is not . .
Cited – Ex parte Ward CA 1882
The court was asked whether a creditor might petition for bankruptcy on a liability as a broker who had failed to settle sums due on purchasing shares on the London Stock Exchange. He was declared a defaulter under the Exchange rules as to . .
Cited – Re Miller CA 1901
A prospective partner in the firm paid andpound;2,000 to a broker on terms that he should have the option of demanding its repayment if he did not become a partner by a date. The firm was hammered before that date and having given notice to . .
Cited – Re a Debtor; ex parte Berkshire Finance Co Ltd QBD 2-Jan-1962
The court was asked to consider whether a judgment debt in respect of sums due under a hire-purchase agreement was a good petitioning creditor’s debt. The judgment sum included the balance of all the remaining hire charges which became payable on . .
Mentioned – Campbell Discount Company Ltd v Bridge HL 1962
The parties disputed the validity of a clause in a car hire contract relating to the consequences of a breach.
Held: (Majority) The agreement had been terminated by breach rather than by the exercise of an option, so that the stipulated . .
Cited – Truex v Toll ChD 6-Mar-2009
The bankrupt appealed against an order in bankruptcy made against her on application by her former solicitors in respect of their unpaid costs. The bankrupt said that since the bill was yet untaxed, it might be altered and could not base a statutory . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Banking
Updated: 10 November 2021; Ref: scu.448322