Re a Company No 001573 of 1983: ChD 1983

The court was presented with a petition of a creditor to wind up a company. The company had leasehold premises which contained a provision for forfeiture of the lease in the event of such a petition. The petitioner had agreed with the company’s landlord that if a petition to wind up the company was presented before a certain date the landlord would terminate the lease and grant a new lease to the petitioner.
Held: The court dismissed the petition as an abuse of process: ‘The question, therefore, is not ‘does the petitioner genuinely wish to wind up the company’. It would be hard for me to find that this petitioner which has taken all regular steps to prosecute its petition and which plainly has reasons to desire the winding-up of this company, since that must put beyond much cavil the future of the company’s lease, does not in truth desire to wind up the company. In my judgment the true question is ‘for what purpose does the petitioner wish to wind up this company’ A judge has to decide whether the petition is for the benefit of the class of which the petitioner forms a part or is for some purpose of his own. If the latter, then it is not properly brought. If the petitioner can show that he and his class stand together and will benefit or suffer rateably, then his ill motive is nothing to the point. But here it is plain that no such even-handedness exists. If the petition is properly brought, then the petitioner stands to get a valuable asset for itself and the rest of the class of creditors are likely to get nothing. If the petition is not properly brought, so that in Scotland the company’s lease remains un-‘irritated’ (and I have no certainty that this will be so) then the class of creditors including the petitioner may all have some hope of payment or will at least suffer rateably.’


Harman J


[1983] 1 BCC 98937


England and Wales

Cited by:

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The company raced in the Formula 1 series. Its main sponsors had been British American Tobacco, but because of restrictions of tobacco advertising, the company lost substantial revenue and fell in to loss, and entered into an individual voluntary . .
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Company, Insolvency

Updated: 09 May 2022; Ref: scu.221022