Tag: Insolvency

Scottish and Newcastle Ltd v Raguz: ChD 10 Jun 2010

The defendant sought permission to appeal against the order made on the application for his bankruptcy, saying that he wished to bring new evidence. He said that he had offered sufficient security for the debt and the court should adjourn the petition pending the sale of assets.

Judges:

Proudman J

Citations:

[2010] EWHC 1384 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

see also – Scottish and Newcastle Plc v Raguz HL 29-Oct-2008
The lease had been assigned by the claimant to the defendant and on again to a tenant who became insolvent. The landlord had recovered sums said to be due from the claimant who now sought an indemnity from the defendant. The defendant said that the . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 19 August 2022; Ref: scu.416603

Post Office v Norwich Union Fire Insurance Society Ltd: CA 1967

A contract of insurance provided an indemnity for ‘all sums which the insured shall become legally liable to pay as compensation in respect of loss of property’. The claim was by the Post Office against a contractor, Potters, for damaging one of their cables which in consequence the Post Office had to repair. Before the Post Office had sued Potters, Potters went into liquidation. The Post Office sued the insurance company direct purporting to make use of the 1930 Act, but before the Post Office’s claim against Potters had been the subject of adjudication or agreement.
Held: A third party claimant could not sue the insurer directly, pursuant to the 1930 Act, until the existence and amount of the liability of the insured had been established by judgment or award or agreement. The reason for this was that the rights transferred by the Act were subject to the terms of the policy. Since the insured could not have claimed an indemnity until their liability had been established, the Post Office could be in no better position. The insurers’ argument that the Post Office had no cause of action against the insurers until the establishment of the existence and amount of the liability of the insured was therefore accepted. Though leave was necessary to begin or continue proceedings against a company in liquidation, the court considered that leave ought to be given automatically if the 1930 Act were applicable.
Lord Denning MR said: ‘It seems to me that the insured only acquires a right to sue for the money when the liability to the injured person has been established so as to give rise to a right of indemnity. His liability to the injured person must be ascertained and determined to exist, either by judgment of the court or by award in arbitration or by agreement. Until that is done the right to an indemnity does not arise.’
The liability must be ‘ascertained and determined to exist’, and that this may be achieved by judgment, arbitration award or agreement: ‘In these circumstances I think the right to sue for these moneys does not arise until the liability of the wrongdoer is established and the amount ascertained. How is this to be done? If there is an unascertained claim for damages in tort, it cannot be proved in the bankruptcy; nor in the liquidation of the company. But nevertheless the injured person can bring an action against the wrongdoer. ‘
Salmon LJ said that when the liability is established, it dates from the date when the cause of action arose: ‘The case really resolves itself into this simple question: Could Potters on June 17, 1965, have successfully sued their insurers for the sum of andpound;839 10s 3d which they were denying they were under any obligation to pay the Post Office? Stated in that way, I should have thought the question admits of only one answer. Obviously Potters could not have claimed that money from their insurers. It is quite true that if Potters in the end are shown to have been legally liable for the damage resulting from the accident to the cable, their liability in law dates from the moment when the accident occurred and the damage was suffered. But whether or not there is any legal liability and, if so, the amount due from the Potters to the Post Office can, in my view, only be finally ascertained either by agreement between Potters and the Post Office or by an action or arbitration between Potters and the Post Office. ‘

Judges:

Lord Denning MR, Salmon LJ

Citations:

[1967] 2 QB 363, [1967] 1 Lloyds Rep 216

Statutes:

Third Parties (Rights Against Insurers) Act 1930

Jurisdiction:

England and Wales

Citing:

Approved – West Wake Price and Co v Ching 1957
A clerk employed by a firm of accountants defrauded two of the firm’s clients of andpound;20,000 over a period of about three years.
Held: One can not ‘pay’ a cause of action.
Devlin J said: ‘I think that the primary meaning of the word . .

Cited by:

Cited – First National Tricity Finance Ltd v OT Computers Ltd; In re OT Computers Ltd (in administration) CA 25-May-2004
The company had gone into liquidation. They had sold consumer policies as extended warranties on behalf of the claimant. The company had insured its own joint liability under the contracts, and the claimant sought information from the company’s . .
Mentioned – Aer Lingus v Gildacroft Ltd and Another CA 17-Jan-2006
The claimant had been found liable to pay damages for personal injury, and now sought contribution from the defendants. The defendants said that they were out of time since the contribution action had been commenced more than 2 years after the . .
Cited – Law Society of England and Wales and others v Shah and others ChD 30-Nov-2007
Solicitor firms had been made bankrupt leaving a shortfall after thefts from client accounts of over 12 million pounds. The thief had diappeared, and the other partners were now discharged form bankruptcy. The Law Society accepted that it could not . .
Attacked – Bradley v Eagle Star Insurance Co Ltd HL 1989
Mrs Bradley was employed by Dart Mill several times from 1933 and 1970 and acquired byssinosis from inhaling cotton dust. The company was wound up in 1975 and dissolved in 1976. In 1984 she applied to the court for pre-action disclosure under . .
Cited – Teal Assurance Company Ltd v WR Berkley Insurance (Europe) Ltd SC 31-Jul-2013
An international engineering company had several layers of professional indemnity insurance. The top later did not cover claims originating in the US or Canada. The several insurers now disputed apportionment of liability between them. The . .
Lists of cited by and citing cases may be incomplete.

Insurance, Insolvency

Leading Case

Updated: 19 August 2022; Ref: scu.198401

Soutzos v Asombang and Others: ChD 23 Apr 2010

The claimant had lent substantial sums to the defendant. The defendant had subsequently been made bankrupt, and now said he was released from the debt.

Judges:

Newey J

Citations:

[2010] EWHC 842 (Ch), [2010] BPIR 960

Links:

Bailii

Statutes:

Insolvency Act 1986 281

Jurisdiction:

England and Wales

Cited by:

See Also – Soutzos v Asombang and Others ChD 21-Jun-2011
The claimant had obtained a freezing order against the defendants. His claim having been dismissed, the court now considered if and what damages should be paid under the cross-undertaking he had given.
Held: Setting out and applying the . .
Lists of cited by and citing cases may be incomplete.

Contract, Insolvency

Updated: 17 August 2022; Ref: scu.408673

Re Kaupthing Singer and Friedlander Ltd: ChD 19 Feb 2010

Judges:

Blair J

Citations:

[2010] EWHC 316 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

Binding – In re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 14 August 2022; Ref: scu.401666

Byers and Others (Liquidators of Madoff Securities International Ltd) v Yacht Bull Corporation and Another: ChD 1 Feb 2010

The claimants asked the court to exercise jurisdiction over a yacht purchased by the defendant company incorporated and domiciled in France with money from the insolvent company.
Held: The court did not have jurisdiction. Article 2 of the regulation applied so as to require the matter to go before the courts in France. The exception in article 1(2)(b) did not apply so as to exclude application of the regulation.

Judges:

Sir Andrew Morritt, Chancellor

Citations:

[2010] BCC 368, [2010] ILPr 24, [2010] EWHC 133 (Ch), Times 15-Feb-2010, [2010] WLR (D) 18

Links:

Bailii, WLRD

Statutes:

Council Regulation (EC) No 44/2001 of December 22, 2000

Jurisdiction:

England and Wales

Jurisdiction, Insolvency

Updated: 14 August 2022; Ref: scu.396744

Garrow v Society of Lloyd’s: ChD 18 Jun 1999

Lloyds sought to claim against the Names on a ‘pay now, sue later’ clause.
Held: The power to order a stay of execution for possession remained and could be exercised in an appropriate case even though a cross-claim under which it was requested, could have been raised at an earlier stage in the proceedings. There was no hard rule of law to prevent such a request.
Jacob J said: ‘The other point urged upon me was the ‘pay now sue later’ clause. Mr Garrow had agreed that if he was to bring a cross claim he would nonetheless pay the claim at once. This is of course true, and if he had the means then I have no doubt that he should be made to do so. But I am concerned with whether the draconian effect of the bankruptcy should be imposed when he may have a perfectly good cross claim. It seems to me that this would be disproportionate, given the fact that with the Commercial Court decision likely soon, there is no tangible benefit to be had.’

Judges:

Jacob J

Citations:

Times 18-Jun-1999, [1999] BPIR 668

Jurisdiction:

England and Wales

Cited by:

Appeal from – Garrow v Society of Lloyd’s CA 28-Oct-1999
A proper counterclaim against Lloyd’s of London for fraudulent misrepresentation with an amount at stake equal to the amount claimed was a proper basis for setting aside a statutory demand for a sum due to Lloyd’s, despite the existence of a deed . .
Cited – Remblance v Octagon Assets Ltd CA 17-Jun-2009
A statutory demand was served against the guarantor of the lease after rent arrears arose. He applied for the demand to be set aside, and now appealed against its refusal. He said that the court would have set aside such a demand against the tenant, . .
Lists of cited by and citing cases may be incomplete.

Land, Insolvency

Updated: 14 August 2022; Ref: scu.80759

Jack and Another (London Scottish Finance Ltd) v Craig and Others: ChD 17 Dec 2013

Application by the joint administrators of LSF for directions arising out of loan agreements made or acquired by LSF before the administration began, under which secured loans were made to consumers but which were unenforceable because they contravened provisions of the Consumer Credit Act 1974.
Held: The phrase ‘realisation of the security’ in section 106, is to be interpreted conventionally to achieve the policy objective (section 113) that the security provided under the regulated agreement could not be enforced so as to benefit the creditor to any greater extent than would be the case if the security were not provided. In a secured loan to which section 106(d) applied, the provisions did not catch all sums paid by the debtor in discharge of the loan.

Judges:

Sir Terence Etherton Ch

Citations:

[2013] EWHC 4047 (Ch), [2013] WLR(D) 498, [2014] Bus LR 424, [2013] CTLC 231

Links:

Bailii, WLRD

Statutes:

Insolvency Act 1986, Consumer Credit Act 1974 106(d)

Jurisdiction:

England and Wales

Insolvency, Consumer, Banking

Updated: 14 August 2022; Ref: scu.519223

Re Storm Funding Ltd: ChD 18 Dec 2013

‘The administrators of 14 companies in the Lehman Brothers group apply for directions as to the potential liabilities of those companies to make payments to or for the benefit of the Lehman Brothers Pension Scheme (the scheme) established principally for the benefit of persons employed by Lehman Brothers Limited (LBL) but seconded to work for other group companies. ‘

Judges:

David Richards J

Citations:

[2013] EWHC 4019 (Ch), [2014] Bus LR 454, [2014] Pens LR 73, [2013] WLR(D) 502

Links:

Bailii, WLRD

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Insolvency

Updated: 14 August 2022; Ref: scu.519226

Lehman Brothers International (Europe) v CRC Credit Fund Ltd and Others: ChD 15 Dec 2009

Judges:

Briggs J

Citations:

[2009] EWHC 3228 (Ch), [2010] 2 BCLC 301

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See Also – Lehman Brothers International (Europe) v CRC Credit Fund Ltd and Others ChD 20-Jan-2010
. .
Appeal from – CRC Credit Fund Ltd and Others v GLG Investments Plc (Sub-Fund: European Equity Fund) and Others CA 2-Aug-2010
. .
At first instance – Lehman Brothers International (Europe), Re SC 29-Feb-2012
The court was asked to interpret the provisions as to ‘client money rules’ and ‘client money distribution rules’ in the FSA handbook, and to consider the consequences as to the applicable trusts. Substantial sums paid by clients to the bank before . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Financial Services

Updated: 11 August 2022; Ref: scu.384131

Re Lehman Brothers International (Europe) and Others: ChD 14 Mar 2014

On the winding up of the company, there had unexpectedly been a surplus of assets after payment of all debts. The court was now asked to determine claims to be allowed before a distribution was made.
Held: The court made declarations as follows: ‘i) The claims of LBHI2 under its subordinated loan agreements with LBIE are subordinated not only to provable debts but also to statutory interest and un-provable liabilities.
ii) Creditors of LBIE whose contractual or other claims are denominated in a foreign currency are entitled to claim against LBIE for any currency losses suffered by them as a result of a decline in the value of sterling as against the currency of the claim between the date of the commencement of the administration of LBIE and the date or dates of payment or payments of distributions to them in respect of their claims. Such currency conversion claims rank as un-provable liabilities, payable only after the payment in full of all proved debts and statutory interest on those debts.
iii) If the administration of LBIE is immediately followed by a liquidation, any interest in respect of the period of the administration which has not been paid before the commencement of the liquidation will not be provable as a debt in the liquidation nor will it be payable as statutory interest under either rule 2.88 of the Insolvency Rules or section 189 of the IA 1986.
iv) Those creditors of LBIE with debts which carry interest by reason of contract, judgment or other reasons unconnected with the administration or liquidation of LBIE will be entitled to claim in a liquidation of LBIE, which immediately follows the administration, for interest which accrued due during the period of the administration, as an un-provable claim against LBIE, payable after the payment in full of all proved debts and statutory interest on such debts.
v) The obligation of members to contribute under section 74(1) of the IA 1986 extends not only to provide for proved debts but also for statutory interest on those debts and un-provable liabilities.
vi) The contributory rule (that is, the rule that a contributory of a company in liquidation cannot recover anything in respect of any claims he may have as a creditor until he has fully discharged his obligations as a contributory) applies only in a liquidation. It does not apply in an administration, including the administration of LBIE. The equitable rule in Cherry v Boultbee also does not apply.
vii) LBIE, acting by its administrators, will be entitled to lodge a proof in a distributing administration or a liquidation of either LBL or LBHI2 in respect of those companies’ contingent liabilities under section 74(1) of the IA 1986 which may arise if LBIE were to go into liquidation. The valuation of such claims would be a matter of estimation under the provisions of the Insolvency Rules.
viii) In a distributing administration or liquidation of LBL or LBHI2, the claims of those companies respectively as creditors of LBIE would be the subject of mandatory set-off against the claims of LBIE in respect of those companies’ contingent liabilities as contributories. I have reached the conclusion that the decision in In re Auriferous Properties Limited (No 1) [1898] 1 Ch 691 was wrong and should not be followed.
ix) In the administration of LBIE the contingent liabilities of LBL and LBHI2 as contributories will be the subject of mandatory set-off against the admitted proofs of debt of those companies as creditors of LBIE.’

Judges:

David Richards J

Citations:

[2014] EWHC 704 (Ch), [2014] WLR(D) 132, [2015] 1 Ch 1, [2014] 3 WLR 466, [2014] BCC 193

Links:

Bailii, WLRD

Jurisdiction:

England and Wales

Cited by:

At ChD – LB Holdings Intermediate 2 Ltd, (The Joint Administrators of) and Others v Lomas and Others CA 14-May-2015
Applications after recovery of surplus funds to repay creditors of Lehmann Brothers Ltd. The court had given orders as to the several uses of the surpluses. The parties appealed some elements of those orders.
Held: Most elements were upheld, . .
At ChD – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 07 August 2022; Ref: scu.522457

Hindcastle Ltd v Barbara Attenborough Associates Ltd and Others: CA 6 Jul 1994

A disclaimer of a lease on insolvency of the tenant leaves the original Tenant and his Security or guarantor liable as well as any intermediate assignees. ‘In order to determine these rights and obligations it is necessary, in the nature of things, that the landlord’s obligations and rights, which are the reverse side of the tenant’s rights and obligations, must also be determined. If the tenant’s liabilities to the landlord are to be extinguished, of necessity so also must be the landlord’s rights against the tenant. The one cannot be achieved without the other. Disclaimer also operates to determine the tenant’s interests in the property, namely the lease. Determination of a leasehold estate has the effect of accelerating the reversion expectant upon the determination of that estate. The leasehold estate ceases to exist.’

Citations:

Ind Summary 18-Jul-1994, Times 06-Jul-1994

Jurisdiction:

England and Wales

Cited by:

Appeal from – Hindcastle Ltd v Barbara Attenborough Associates Ltd and Others HL 22-Feb-1996
The guarantor of an original tenant under the lease remains liable after the disclaimer the lease on insolvency. The disclaimer operates to determine the lease altogether with the result that the landlord’s reversion is accelerated. ‘In order to . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Insolvency

Updated: 06 August 2022; Ref: scu.81390

In Re Bank of Credit and Commerce International Sa, In Re BCCI (Overseas) Ltd (No 9): ChD 11 Aug 1993

An English Court has the jurisdiction and discretion to apply English insolvency law to a foreign registered company.

Judges:

Rattee J

Citations:

Ind Summary 20-Sep-1993, Times 11-Aug-1993, [1994] 2 BCLC 636

Jurisdiction:

England and Wales

Citing:

Approved – Re Dallhold Estates (UK) Pty Ltd ChD 1992
The court discussed the the receipt and acceptance of a letter of request: ‘The scheme of subsection (5) appears to me to be this. The first step is to identify the matters specified in the request. Secondly, the domestic court should ask itself . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 06 August 2022; Ref: scu.81734

Bank of Credit and Commerce International Sa (In Liquidation) (No 8): CA 2 Oct 1996

Not all debts which were eligible for proof in bankruptcy were also eligible for a set off.
Rose Ljexplained the doctrine of equitable marshallling, saying: ‘The doctrine of marshalling applies where there are two creditors of the same debtor, each owed a different debt, one creditor (A) having two or more securities for the debt due to him and the other (B) having only one. B has the right to have the two securities marshalled so that both he and A are paid so far as possible. Thus if a debtor has two estates (Blackacre and Whiteacre) and mortgages both to A and afterwards mortgages Whiteacre only to B, B can have the two mortgages marshalled so that Blackacre can be made available to him if A chooses to enforce his security against Whiteacre. For the doctrine to apply there must be two debts owed by the same debtor to two different creditors.’
. . and ‘[Marshalling] is never allowed to delay or defeat the creditor with several securities in the collection of his debt and the enforcement of his securities. He is allowed to realise his securities as he pleases’.

Judges:

Rose LJ

Citations:

Gazette 02-Oct-1996, [1996] Ch 245, [1996] 2 BCLC 254, [1996] 2 WLR 631, [1996] 2 All ER 121

Statutes:

Insolvency Rules 1986 4.90

Jurisdiction:

England and Wales

Cited by:

Cited – Szepietowski v The National Crime Agency SC 23-Oct-2013
S owned several propertie in charge to the bank, but the Agency said that each had been acquired with the proceeds of criminal activity. The parties had settled the claim by the grant of a second charge in favour of the Agency. However when that . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Banking, Insolvency, Equity

Updated: 06 August 2022; Ref: scu.78144

Hofer v Strawson: ChD 31 Mar 1999

The debtor had agreed to buy a company from the petitioner, the price to be payable in instalments by means of post-dated cheques. The debtor alleged misrepresentation and stopped one of the cheques. The petitioner served a statutory demand based on the dishonoured cheque. The district judge dismissed the debtor’s application to set aside the statutory demand, concluding that although the debtor had an arguable claim for damages for misrepresentation such a claim could not amount to a defence to a claim on the dishonoured cheque, and that in consequence it could not provide a ground for setting aside the statutory demand. The debtor appealed.
Held: The appeal failed. the misrepresentation claim did not disclose a genuine triable issue. The claim of set-off could however be made in principle since this would accord with companies court practice.
Neuberger J discussed the meaning of the expression ‘counterclaim, set-off or cross demand’ in the Rule: ‘Fastening upon the words ‘counterclaim, set-off or cross demand’ in r.6.5(4)(a) [counsel for the debtor] contends that although a counterclaim of the sort contemplated in [the debtor’s] evidence could not avail her as a defence against a claim by [the petitioner] for judgment on the cheque, it does provide a basis for setting aside the statutory demand.
In my judgment that argument is correct. First, the difference between set-off on the one hand, and a cross-demand or counterclaim, on the other hand, is as follows.
A set-off is a claim which can be, as its name suggests, set off against another claim, i.e. in practice it operates as a defence to that other claim. On the other hand a counterclaim or cross-demand which is not a set-off is a claim or demand which, although perfectly valid in itself, cannot for some reason be invoked as a set-off or defence to another claim. In my judgment, the way in which the three words are used in r.6.5(4)(a) is such that they have that effect in the context of the rule.
Secondly, it is difficult to give the reference to counterclaim or cross-demand any sensible alternative meaning. If they are limited to counterclaims or cross-demands which act as set-offs there would have been no reason to refer to them. They would have been covered by the simple word ‘set-off’.
Thirdly, some support for this view is to be found in [paragraphs 3 and 4 of the 1987 Practice Direction, which were in identical terms to paragraphs 12.3 and 12.4 of the 1999 Practice Direction].’

Judges:

Neuberger J

Citations:

Gazette 31-Mar-1999, [1999] 2 BCLC 336

Statutes:

Insolvency Rules 1986 6.5(4)(a)

Jurisdiction:

England and Wales

Cited by:

Cited – Bryce Ashworth v Newnote Ltd CA 27-Jul-2007
The appellant challenged a refusal to set aside a statutory demand, in respect of his director’s loan account with the respondent company, saying the court should have accepted other accounts to set off against that debt.
Held: A statutory . .
Cited – Ezekiel and Another v Kohali and Another CA 30-Jan-2009
Each side sought specific performance of a contract set out in a Heads of Agreement document, but one sought an abatement in the price, saying that the seller was unable to deliver the title promised. The seller replied that the document did not . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 06 August 2022; Ref: scu.81424

Hollicourt (Contracts) Ltd (In Liquidation) v Bank of Ireland: ChD 17 Dec 1999

A company’s account was in credit at all times, but was, unknown to the bank, in winding up proceedings. The bank continued to honour cheques, and was found to have been making dispositions of the company’s assets under the section. Accordingly the payments were void and ineffective from the date of the commencement of the winding up.

Citations:

Times 30-Nov-1999, Gazette 17-Dec-1999

Statutes:

Insolvency Act 1986 127

Jurisdiction:

England and Wales

Citing:

Appealed to – Bank of Ireland v Hollicourt (Contracts) Limited CA 20-Oct-2000
A bank continued to pay on cheques presented to it against the company’s bank account even after the presentation of a petition for bankruptcy. The liquidator sought recovery of the amounts paid from the bank as well as the payees. It was held that . .

Cited by:

Appeal from – Bank of Ireland v Hollicourt (Contracts) Limited CA 20-Oct-2000
A bank continued to pay on cheques presented to it against the company’s bank account even after the presentation of a petition for bankruptcy. The liquidator sought recovery of the amounts paid from the bank as well as the payees. It was held that . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Banking

Updated: 06 August 2022; Ref: scu.81446

Gwembe Valley Development Co Ltd (In Receivership) v Koshy and Others: ChD 8 Feb 2000

A company could give several people the power to appoint a receiver in respect of different elements of its assets. If this was done there was no fundamental reason why such appointments should not be put in effect. The appointment of one receiver did not, in the absence of explicit limitations to the contrary exhaust the power to appoint receivers.

Citations:

Times 08-Feb-2000, Gazette 16-Mar-2000

Jurisdiction:

England and Wales

Citing:

See Also – Gwembe Valley Development Co Ltd (In Receivership) v Koshy and Others (No 2) ChD 30-Mar-2000
The new Civil Procedure Rules had not substantially affected the rules on costs following the event of a trial. The discretion in a judge as to the order for costs had been correctly stated in Elgindata, and approved in Phonographic Performance Ltd . .

Cited by:

See Also – Gwembe Valley Development Co Ltd (In Receivership) v Koshy and Others (No 2) ChD 30-Mar-2000
The new Civil Procedure Rules had not substantially affected the rules on costs following the event of a trial. The discretion in a judge as to the order for costs had been correctly stated in Elgindata, and approved in Phonographic Performance Ltd . .
Cited – Green and others v Gaul and Another; In re Loftus deceased ChD 18-Mar-2005
The claimants began an action in January 2003 to seek to set aside the appointment of an administrator from December 1991, and to have set aside transfers of property made within the estate.
Held: The limitation period against a personal . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Costs

Updated: 05 August 2022; Ref: scu.81095

Hardy v Focus Insurance Co (In Liquidation): ChD 19 Jul 1996

The Court has no power to direct the Official Receiver as to suspension of bankruptcy.

Citations:

Times 19-Jul-1996, [1997] BPIR 77

Statutes:

Insolvency Act 1986 303(1) 303(2)

Jurisdiction:

England and Wales

Cited by:

Cited – Bagnall QC v the Official Receiver ChD 18-Jun-2003
The bankrupt was to receive his automatic discharge. The receiver had applied ex parte to suspend the automatic discharge. The bankrupt appealed.
Held: The court had power to make such an order. The court had seen strong prima facie evidence . .
Cited – Jacobs v Official Receiver; In re Jacobs (a bankrupt) ChD 3-Apr-1998
The bankrupt was due to have his automatic discharge, but the Official Receiver applied on the day before for the discharge for an interim suspension of the discharge to allow consideration of his alleged lack of co-operation. The bankrupt said the . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 05 August 2022; Ref: scu.81234

In re Kaupthing Singer and Friedlander Ltd: ChD 2 Oct 2009

Judges:

Norris J

Citations:

[2009] EWHC 2308 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Cited by:

Appeal From – In re Kaupthing Singer and Friedlander Ltd CA 11-May-2010
The court was asked as to the set-off, in a company administration, of future debts owed by the company to its creditors and by those creditors to the company, and whether the effect of those provisions was that, after the future debts were . .
See Also – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Banking

Updated: 04 August 2022; Ref: scu.375620

German Graphics Graphische Maschinen Gmbh v Alice van der Schee, acting as liquidator of Holland Binding BV (Area Of Freedom, Security And Justice): ECJ 10 Sep 2009

ECJ Insolvency – Application of the law of the Member State of the opening of proceedings – Reservation of title – Situation of assets.

Citations:

C-292/08, [2009] EUECJ C-292/08

Links:

Bailii

European, Insolvency

Updated: 04 August 2022; Ref: scu.374764

Stein v Blake: HL 18 May 1995

Where A and B each have claims against each other and A is insolvent, the common amount is set off, and the net difference remains as a debt due.
Hoffmann L said: ‘It is a matter of common occurrence for an individual to become insolvent while attempting to pursue a claim against someone else. In some cases, the bankruptcy will itself have been caused by the failure of the other party to meet his obligations. In many more cases, this will be the view of the bankrupt. It is not unusual in such circumstances for there to be a difference of opinion between the trustee and the bankrupt over whether a claim should be pursued. The trustee may have nothing in his hands with which to fund litigation. Even if he has, he must act in the interests of creditors generally and the creditors will often prefer to receive an immediate distribution rather than see the bankrupt’s assets ventured on the costs of litigation which may or may not yield a larger distribution at some future date. The bankrupt, with nothing more to lose, tends to take a more sanguine view of the prospects of success. In such a case the trustee may decide, as in this case, that the practical course in the interests of all concerned (apart from the defendant) is to assign the claim to the bankrupt and let him pursue it for himself, on terms that he accounts to the trustee for some proportion of the proceeds.
It is understandable that a defendant who does not share the bankrupt’s view of the merits of the claim may be disappointed to find that notwithstanding the bankruptcy, which he thought would result in a practical commercial decision by an independent trustee to discontinue the proceedings, the action is still being pursued by the bankrupt. His disappointment is increased if he finds that the bankrupt as plaintiff in his own name has the benefit of legal aid which would not have been available to the trustee. Similar considerations apply to an assignment of a right of action by the liquidator of an insolvent company to a shareholder or former director. In such a case there is the further point that the company as plaintiff can be required to give security for costs. The shareholder assignee as an individual cannot be required to give security even if (either because he does not qualify or the Legal Aid Board considers that the claim has no merits) he is not in receipt of legal aid’.

Judges:

Lord Keith of Kinkel, Lord Ackner, Lord Lloyd of Berwick, Lord Nicholls of Birkenhead, Lord Hoffmann

Citations:

Independent 19-May-1995, Times 19-May-1995, [1996] 1 AC 243, [1995] UKHL 11, [1995] 2 All ER 961, [1995] 2 WLR 710, [1995] 2 BCLC 94

Links:

Bailii

Statutes:

Insolvency Act 1986 323

Jurisdiction:

England and Wales

Citing:

Appeal from – Stein v Blake CA 13-May-1993
The plaintiff argued that: ‘Nothing in the wording of section 323 changes the nature of set-off as it operates between solvent parties; it merely widens the categories of claim capable of being, and which must be, set off.’
Held: The decision . .

Cited by:

Applied – Circuit Systems Ltd (In Liquidation) and Another v Zuken Redac (Uk) Ltd CA 5-Apr-1996
The assignment of a debt by a company in liquidation to a significant shareholder, in order to allow him to make an application for legal aid, and to avoid having to give security for costs and to allow the action to proceed was not unlawful, but . .
Cited – Mulkerrins v Pricewaterhouse Coopers HL 31-Jul-2003
The claimant sought damages from her former accountants for failing to protect her from bankruptcy. The receiver had unnecessarily caused great difficulties in making their claim that such an action vested in them. The defendants had subsequently, . .
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.
Cited – Fuller v Happy Shopper Markets Ltd and Another ChD 6-Mar-2001
A tenant complained to the landlord about his failure to repair. He ceased paying rent, and the landlord eventually distrained for rent by direct action.
Held: The tenant was unable to claim a legal set-off because there was no context of . .
See Also – Stein v Blake and others CA 13-Oct-1997
The defendants challenged leave to appeal given to the plaintiff against dismissal of his claim following the Prudential Assurance case.
Held: The issue was whether the plaintiff can recover the loss which he has allegedly sustained by reason . .
See Also – Stein v Blake and others CA 13-Oct-1997
The defendants challenged leave to appeal given to the plaintiff against dismissal of his claim following the Prudential Assurance case.
Held: The issue was whether the plaintiff can recover the loss which he has allegedly sustained by reason . .
See Also – Stein v Blake ChD 31-Oct-2000
When a Legal Aid certificate was withdrawn, leading to an opposing party suffering abortive costs in continuing the action, it was not a duty of the Legal Services Commission to inform the opposing side. They would have no access to arrangements . .
Cited – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Legal Aid

Updated: 03 August 2022; Ref: scu.89537

Keene (Trustees of The Graphic Reproduction Federation) v Wellcom London Ltd and Others: ChD 30 Jan 2014

The Trustees sought (1) a declaration that the Federation was spontaneously dissolved at some stage between 1987 and now (2) alternatively an order dissolving the Federation pursuant to the Court’s inherent jurisdiction and (3) directions as to how and to whom the Federation’s assets should be distributed.

Judges:

Peter Smith J

Citations:

[2014] EWHC 134 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency

Updated: 28 July 2022; Ref: scu.520823

Scottish Lion Insurance Company Ltd v Goodrich Corporation and Others: SCS 8 Mar 2011

The object of the proceedings was to protect the confidentiality of documents disclosing certain identities, and an order designed to achieve that objective had previously been made by the court.
Held: The court permitted the identities of the applicants to be withheld from public disclosure. The disclosure of their identities would be inconsistent with that order and would undermine the confidentiality which the proceedings were intended to preserve.
The court must have regard not only to the justice of its decision, but also to the justice of the procedures by which it gives it. It therefore had the inherent power, in his opinion, to withhold the identity of a party where, regardless of the outcome of the case, the disclosure of that party’s identity would constitute an injustice to him.

Judges:

Lord Reed

Citations:

[2011] ScotCS CSIH – 18, 2011 GWD 12-272, 2011 SLT 733

Links:

Bailii

Statutes:

Companies Act 2006 899

Jurisdiction:

Scotland

Citing:

See Also – Scottish Lion Insurance Company Ltd v Goodrich Corporation and Others SCS 29-Jan-2010
. .
See Also – The Scottish Lion Insurance Company Ltd v Goodrich Corporation and Others SCS 28-Apr-2010
. .

Cited by:

Cited – A v British Broadcasting Corporation (Scotland) SC 8-May-2014
Anonymised Party to Proceedings
The BBC challenged an order made by the Court of Session in judicial review proceedings, permitting the applicant review to delete his name and address and substituting letters of the alphabet, in the exercise (or, as the BBC argues, purported . .
Cited – Cherry, Reclaiming Motion By Joanna Cherry QC MP and Others v The Advocate General SCS 11-Sep-2019
(First Division, Inner House) The reclaimer challenged dismissal of her claim for review of the recent decision for the prorogation of the Parliament at Westminster.
Held: Reclaim was granted. The absence of reasons allowed the court to infer . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Litigation Practice

Updated: 28 July 2022; Ref: scu.430401

In Re Sutton (Removal of Liquidator): ChD 17 Oct 1997

The insolvency practitioner held many appointments. His partnership in a large firm of accountants ended suddenly. He did not have the resources to handle the cases, and nor could acceptable arrangements be made for him to have access to the related files within the firm. An application was made by another partner in the firm for his removal.
Held: Removal of a liquidator was for cause shown. That cause could include a supervening inabilityy to conduct the case. The power to apply for the removal of liquidator from his position was not limited to the liquidator and or creditors. Here it was appropriate for an application to be made by a partner in the liquidator’s firm. That firm had day to day conduct of the insolvency. The order would avoid the need for a creditors’ meeting with the accompanying substantial costs.

Judges:

Blackburne J

Citations:

Times 03-Nov-1997, Gazette 12-Nov-1997

Statutes:

Insolvency Act 1986 108(2) 172(2)

Jurisdiction:

England and Wales

Citing:

Distinguished – In re Sankey Furniture Ltd, ex parte Harding; Re Calorifique Limited, ex parte Betts ChD 1995
Separate applications were made by liquidators of companies in variously voluntary or compulsory liquidation and otherwise. . .
Cited – In re Parkdawn Ltd ChD 1993
The section provided sufficient power to allow a court to appoint a new liquidator in the case of a company’s liquidation. Though there is no express power, one is assumed within the insolvency rules. . .
Cited – Re Bullard and Taplin Ltd ChD 1996
Tne question of whether there was at any time ‘pending court proceedings’ was answered by asking if there existed a court file. The section empowered a court itself to appoint another trustee in bankruptcy. Section 41 of the 1984 Act could be used . .
Cited – Re Bridgend Goldsmiths Limited and Others ChD 1995
The High court may not exercise its jurisdiction under section 263 of the 1986 Act within a voluntary arrangement within the county court. . .
Cited – John Abbott and others No 00137 of 1997 ChD 1997
Having exercised its power under s41 to remove liquidators and supervisors, the court had power itself to appoint replacement officers. The existing practitioner had ceased to hold the appropriate authorisation. . .
Cited – Re Adams (AB) Builders Limited 1991
An insolvency practitioner who had lost his power to act applied to the court to be removed from his positions as liquidator in several creditors voluntary liquidations. . .
Cited – Re Stella Metals Limited and Others (In liquidation) 1997
Application was made for the replacement of a number of insolvency practitioners by the Insolvency Practitioners Association Ltd.
Held: The association might as a recognised body, have locus standi to apply to the court, but it was not a . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 25 July 2022; Ref: scu.82212

In Re Norditrack (UK) Ltd: ChD 11 Nov 1999

A voluntary winding up is deemed to take place when the resolution for it was passed. The practice of passing such a resolution to take effect only upon the revocation of an administration order was ineffective. The correct way was for an order regarding the administration to be made but held pending notification of the passing of the resolution by the company.

Judges:

Arden J

Citations:

Times 11-Nov-1999

Statutes:

Insolvency Act 1986 86

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 25 July 2022; Ref: scu.82073

Visciano v Istituto nazionale della previdenza soziale: ECJ 2 Apr 2009

ECJ Social policy Approximation of laws Protection of employees in the event of employer insolvency – Directive 80/987 / EEC Obligation to pay claims arising from an employment relationship within the limit of a ceiling legal nature of the claims employed person in respect of the guarantee institution limitation periods general Principles of law Principles of equivalence and effectiveness of equality principle

Citations:

C-69/08, [2009] EUECJ C-69/08

Links:

Bailii

Statutes:

Directive 80/987/EEC

Cited by:

Opinion – Visciano v Istituto nazionale della previdenza soziale ECJ 16-Jul-2009
ECJ Social policy Protection of workers Insolvency of employer Directive 80/987/EEC Obligation to pay all outstanding claims up to a pre-established ceiling Nature of an employee’s claims against a guarantee . .
Lists of cited by and citing cases may be incomplete.

European, Employment, Insolvency

Updated: 24 July 2022; Ref: scu.342052

In Re A Company (No 007946 of 1993): ChD 18 Nov 1993

A Northern Ireland company can be wound up in England and Wales if its principal place of business had been in England and Wales. The company incorporated in Northern Ireland became insolvent. It sought to strike out the Secretary of State’s petition under 124A, and said it could not apply to a Northern Ireland Company.
Held: The definition of an incorporated company included a company incorporated anywhre in the UK.

Judges:

Morritt J

Citations:

Times 18-Nov-1993, Gazette 02-Mar-1994, [1994] 2 WLR 439

Statutes:

Insolvency Act 1986 124A 220

Jurisdiction:

England and Wales

Insolvency, Company, Northern Ireland

Updated: 24 July 2022; Ref: scu.81640

In Re Williams (A Bankrupt): ChD 25 Jun 1997

Repeated adjournments of a bankruptcy petition are inappropriate where there was no prospect of the bankrupt making full repayment within a reasonable time. This had the effect of creating an ad hoc voluntary arrangement.

Citations:

Gazette 25-Jun-1997, Times 16-Jul-1997

Jurisdiction:

England and Wales

Insolvency

Updated: 24 July 2022; Ref: scu.82293

In Re A Company (No 008174 of 1999): ChD 2 Nov 1999

Where a school made teachers redundant because of insolvency, and gave notice to teachers to the end of the summer term, that was to include the summer holidays, and the pay until the end of the holidays was properly claimable against the school, and if necessary against the Secretary of State. The holiday related to the preceding term and the contract made it payable.

Citations:

Times 02-Nov-1999

Statutes:

Insolvency Act 1986 19(6)

Jurisdiction:

England and Wales

Employment, Insolvency

Updated: 24 July 2022; Ref: scu.81643

In Re A Debtor (No 647-Sd-1999): ChD 10 Apr 2000

A statutory demand by the Inland Revenue, which was based upon a debt which was statute barred, was not supportable and had to be set aside. The demand was based upon the judgement obtained by the Inland Revenue, and not upon the underlying tax debt. The limitation arrangements were different.

Citations:

Times 10-Apr-2000

Statutes:

Limitation Act 1980 37(2)

Jurisdiction:

England and Wales

Insolvency

Updated: 24 July 2022; Ref: scu.81666

In Re A Debtor (No 90 of 1997): ChD 1 Jul 1998

Ordinarily the court would avoid two actions on similar facts where inconsistent decisions might be reached, but where issues on setting aside a statutory demand were genuinely separate, the separate actions could continue.

Citations:

Times 01-Jul-1998

Statutes:

Insolvency Rules 1986 (1986 No 1925) 6.5.4(d)

Jurisdiction:

England and Wales

Insolvency

Updated: 24 July 2022; Ref: scu.81672

In Re ASRS Establishment Ltd (In Administrative Receivership and Liquidation): ChD 17 Nov 1999

Although the parties should be free to make the agreement they wanted to, and the court should listen, that would not mean that assets which were incapable of being made subject to a fixed charge could be made so by the joint intention of the parties.

Citations:

Times 17-Nov-1999

Jurisdiction:

England and Wales

Cited by:

Cited – National Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
Lists of cited by and citing cases may be incomplete.

Banking, Insolvency

Updated: 24 July 2022; Ref: scu.81699

In Re Banco Nacional De Cuba: ChD 7 Jun 2001

Where it was alleged that shares in a UK company had been sold at an undervalue, so as to allow a challenge in insolvency proceedings, the leave of the court was still required if the pleadings were to be served abroad. When the court considered such an application, it had to look not just at the fact that the property to which the claim related is in the jurisdiction, but also at reality of the extent of the connection with the UK, and the difficulties if any of enforcement. Here the claimant had not demonstrated that the purpose of the transaction might be to defeat creditors, and one would, in its own jurisdiction, enjoy immunity from enforcement. Section 423 ‘extends to any claim for relief, whether for damages or otherwise, so long as it is related to property located within the jurisdiction’ and ‘the claim under section 423 relates to the shares and particularly the disposition of the shares.’ By CPR 6.20(10) the court may assume jurisdiction if the whole subject-matter of the claim relates to property situated in England.
Lightman J: ‘The critical differences between RSC, O 11, r 1(1)(g) and CPR 6.20(10) is the substitution for the words ‘land situate within the jurisdiction’ of the words ‘relates to property located within the jurisdiction’. The implications are that: (1) the rule is no longer limited to land and now extends to personal property; and (2) instead of the whole claim having to be confined to a claim to a proprietary or possessory interest, it is sufficient that the whole claim relates to property. The evident purpose of the new rule is to lay down a single rule in place of the three earlier rules which embraces and extends beyond the contents of those rules. It is to be noted that at p 128 of the Autumn 2000 Civil Procedure (‘White Book’) the comment is made on CPR 6.20(10): ‘This wide and new provision is no longer confined to land and the old cases are redundant.’ In my view on its proper construction the rule cannot be construed as confined to claims relating to the ownership or possession of property. It extends to any claim for relief (whether for damages or otherwise) so long as it is related to property located within the jurisdiction. This construction vests in the Court a wide jurisdiction, but since the jurisdiction is discretionary the Court can and will in each case consider whether the character and closeness of the relationship is such that the exorbitant jurisdiction against foreigners abroad should properly be exercised.’

Judges:

Lightman J

Citations:

Times 18-May-2001, Gazette 07-Jun-2001, [2001] 1 WLR 2039

Statutes:

Civil Procedure Rules 6.20., Insolvency Act 1986 423

Jurisdiction:

England and Wales

Cited by:

Cited – Shahar v Tsitsekkos and others ChD 17-Nov-2004
The defendant wished to make a claim against another party outside the jurisdiction and was granted permission to serve documents which were headed ‘defence and counterclaim’. The proposed defendant argued that such a document could be served in . .
Cited – Islamic Republic of Pakistan v Zardari and others ComC 6-Oct-2006
The claimant alleged that the defendants had funded the purchase of various properties by secret and unlawful commissions taken by them whilst in power in Pakistan. They sought to recover the proceeds. They now sought permission to serve proceedings . .
Cited – Ashton Investments Ltd. and Another v OJSC Russian Aluminium (Rusal) and others ComC 18-Oct-2006
The claimants sought damages for breach of confidence saying that the defendants had hacked into their computer systems via the internet to seek privileged information in the course of litigation. The defendants denied this and said the courts had . .
Lists of cited by and citing cases may be incomplete.

International, Civil Procedure Rules, Insolvency, Litigation Practice

Updated: 24 July 2022; Ref: scu.81730

In Re A Debtor (No 87 of 1999); Debtor v Johnston: ChD 14 Feb 2000

It was possible for a debtor, faced with a statutory demand, to seek to set up a debt against the creditor by way of a set-off and cross-demand even though the claim was against the creditor in a different capacity. Here the creditor claimed in person but the demand was against her as executor in an estate. A delay in litigating the cross-demand was not itself a bar to setting it up. There was nothing in the new rules, or the old ones, to prevent such a tactic.

Judges:

Rimer J

Citations:

Times 14-Feb-2000, Gazette 17-Feb-2000, [2000] BPIR 589

Jurisdiction:

England and Wales

Cited by:

Cited – Popely v Popely ChD 25-Jul-2003
The claimant appealed refusal to set aside a statutory demand served by the defendant. The parties had become embroiled in criminal proceedings and the defendant sought recovery of assets from the claimant. In those proceedings a costs order had . .
Cited – Dennis Rye Ltd v Bolsover District Council CA 6-May-2009
Right to raise claim against rates insolvency
The ratepayer company sought leave to appeal and to challenge the use of insolvency proceedings to recover council tax. It said that it had a valid counterclaim.
Held: Leave was refused. ‘A company is not prevented from raising a cross-claim . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 24 July 2022; Ref: scu.81669

National Insurance Corp v Winmark Ltd: PC 16 Mar 2009

(Saint Lucia) The Board considered the relative priorities of a fixed and floating charge over company assets and its obligations to pay national insurance contributions.

Judges:

Lord Hoffmann, Lord Rodger of Earlsferry, Lord Carswell, Lord Brown of Eaton-under-Heywood, Lord Mance

Citations:

[2009] UKPC 8

Links:

Bailii

Jurisdiction:

Commonwealth

Commonwealth, Insolvency

Updated: 23 July 2022; Ref: scu.320880

In re Frontsouth (Witham) Ltd and Another: ChD 30 Jun 2011

The court was asked to make a retrospective appointment of a company administrator.
Held: Henderson J (in a reserved judgement) said that he shared Morgan J’s misgivings, but like him regarded the jurisdiction as a useful one and was prepared to follow the practice.

Judges:

Henderson J

Citations:

[2011] EWHC 1668 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986, Insolvency Rules 1986 7.55

Jurisdiction:

England and Wales

Citing:

Cited – In re Blights Builders Ltd ChD 2-Oct-2006
An out of court appointment of joint administrators of the company, a one-man building company, had been made by the principal shareholder’s executors at a time when, unknown to them, a creditor’s petition for the winding up of the company had . .

Cited by:

Cited – In re Care Matters Partnership Ltd ChD 7-Oct-2011
An application was made for the appointment of administrators with retrospective effect.
Held: ‘there are two separate questions. The first question is whether an administration order should be made at all. This requires both the satisfaction . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 22 July 2022; Ref: scu.441409

Tarn Insurance Services Ltd v Kirby and others: CA 27 Jan 2009

Claim by company in administration against former directors for excess payments alleged to have been taken by them. There was now alleged a wilful failure to comply wih court orders for disclosure..
Held: Once non-compliance with an unless order was established, what is required in order to grant relief from sanctions is a material change in circumstances: ‘to relieve someone against such a default was sending ‘entirely the wrong message to those who face allegations of fraud’, and ‘In a case of deliberate and persistent non-compliance with orders to provide information and deliver documents made in order to safeguard proprietary claims, a proper administration of justice requires that, save in very exceptional circumstances, sanctions imposed should take effect. There were no exceptional circumstances in the present case.’

Judges:

Waller LJ VP, Thomas LJ, Sir John Chadwick

Citations:

[2009] EWCA Civ 19, [2009] CP Rep 22

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Applied – Thevarajah v Riordan and Others ChD 9-Aug-2013
The court was asked first whether the defendants had complied with an unless order made with respect to the disclosure of information required to be provided in aid and in order to ensure the proper release of a freezing order which had previously . .
Cited – Thevarajah v Riordan and Others ChD 10-Oct-2013
The court allowed the application of the first, second and fourth respondents for relief from sanction under CPR 3.9. . .
Cited – Thevarajah v Riordan and Others CA 16-Jan-2014
Defendants appealed against an order allowing the application of the first, second and fourth respondents for relief from sanction under CPR 3.9. The relief sought had previously been refused by Hildyard J, so this was the respondents’ second . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Litigation Practice, Torts – Other

Updated: 22 July 2022; Ref: scu.280416

Random House UK Ltd v Allason and others: ChD 11 Dec 2008

The now defendants had lost their action for copyright infringement, and the now claimant sought to enforce the costs order made in their favour. The defendant denied ownership of any assets, but the claimant said that various properties were held in trust for him.

Judges:

David Richards J

Citations:

[2008] EWHC 2854 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Costs, Trusts, Insolvency

Updated: 21 July 2022; Ref: scu.278968

Warner v Verfides: ChD 29 Oct 2008

The deceased bankrupt’s Autralian trustees sought disclosure of documents recording his dealings in the UK. Third party Swiss lawyers now sought to intervene to say that such disclosure would breach the confidence of many of their clients. Redactions were agreed, and the court now looked to the costs.
Held: The interveners’ human rights had been engaged by the request. The court considered the technical meaning of correspondence within article 8, saying ‘To construe the term as applying only to letters still in the possession of the writer or in the process of transmission to the intended recipient appears unduly restrictive. In ordinary parlance, the term would be expected to apply to exchanges of letters in whosever hands they happened to be. ‘ and the interveners’ Article 8 rights are engaged by an application for production of documents in the hands of Verfides that were generated in the course of, or otherwise relate to, the interveners’ business activities. After initial doubts, the interveners had conducted their objections properly. Trustees and interveners were to bear their own costs.

Judges:

John Martin, QC

Citations:

[2008] EWHC 2609 (Ch)

Links:

Bailii, Times

Statutes:

European Convention on Human Rights 8

Jurisdiction:

England and Wales

Wills and Probate, Insolvency, Costs, Human Rights

Updated: 19 July 2022; Ref: scu.277551

Power v Petrus Estates Ltd and others: ChD 31 Oct 2008

The chairman of the creditors meeting had marked the proof of Petrus as objected to but had allowed Petrus to resulting in the appointment of the joint liquidators. The claimant now challenged this saying that had Petrus not been allowed tp vote he would have been appointed.
Held: Lewison J set out the scheme: ‘The general scheme underlying the operation of this rule is the same as that underlying rule 5.22 in relation to personal insolvency (formerly rule 5.17) . . If the chairman decides to mark the claim as ‘objected to’, he must allow the alleged creditor to vote, but the vote is subject to being subsequently declared invalid if the objection to the proof is sustained. This is expressly provided for in rule 4. 70 (3) itself. It is not exactly as Harman J suggested; namely that the claim is admitted but marked as objected to. Rather the claim is objected to but the creditor is allowed to vote. This gives rise to a slight mismatch between the chairman’s powers and the right of appeal. What is contemplated is a quick decision by the chairman, with the possibility of a more leisurely examination of the objection to the proof by the court. Yet the only right of appeal is that contained in rule 4.70 (2) which allows an appeal against the chairman’s decision. Even if the objection to the proof is subsequently sustained, with the result that that creditor’s vote is invalidated, the chairman’s decision may have been entirely correct. It is an oddity if an appeal succeeds against an entirely correct decision, but that seems to be inherent in the way that the rule is framed. Mr Thompson, appearing for Petrus, says that rule 4.70 (2) can be read as eliminating any mismatch. The chairman only makes a decision if he decides to admit or reject a proof under rule 4.70 (1). If he acts under rule 4.70 (3) he does not decide anything: he merely records an objection and doubt. That is why rule 4.70 (4) is itself split into two parts: the first part dealing with the reversal or variation of the chairman’s decision (corresponding to a decision under rule 4.70 (1)); and the second dealing with invalidating a creditor’s vote (corresponding with action under rule 4.70 (3)). There is undoubtedly force in this submission, although rule 4.70 (2) only permits an appeal against the chairman’s decision. If his decision does not encompass action under rule 4.70 (3), it is difficult to see how an appeal can be mounted at all. No one argued for that conclusion.
Be that as it may, rule 4.70 (2) is the mechanism by which an objection to a proof may be tested. It is important to emphasise, however, that what is in issue at this stage is the validity of the proof for the purposes of voting; not the validity of the proof for the purposes of participating in a dividend. A subsequent meeting (or the liquidator) may take a different view of the validity of a proof.’

Judges:

Lewison J

Citations:

[2008] EWHC 2607 (Ch), [2009] 1 BCLC 250, [2009] BPIR 141

Links:

Bailii

Statutes:

Insolvency Act 1986 98, Insolvency Rules 1986 4.70

Cited by:

Cited – AB Agri Ltd v Curtis and Others Misc 22-Jul-2016
(Leeds County Court) The creditor sought to have a proof admitted for pounds 479k, but the chair admitted it only for pounds 1.00, and the IVA proposal was accepted again the wishes of the creditor. The creditor said that the IP had misunderstood . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 19 July 2022; Ref: scu.277396

Moriarty and others v Various Customers of BA Peters Plc (In Administration): ChD 29 Apr 2008

The company had acted as boat sales and brokerage. Claims were made on its insolvency as to the status of boats sold and unsold, and of deposits paid and held by the company.

Citations:

[2008] EWHC 2205 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See also – Moriarty and Another v Various Customers of BA Peters Plc (In Administration) ChD 22-Jul-2008
. .
See also – Moriarty and Another v Atkinson and Various Customers of BA Peters Plc CA 16-Dec-2008
The company, a boat sales agent, made a promise to its customers to hold the funds received from them in a trust account. In breach of that promise, it used the funds to pay its own debt. The customers now appealed against a refusal to allow them to . .
Cited – Brazzill and Others v Willoughby and Others CA 27-May-2010
The regulated bank Kaupthing Singer and Friedlander Ltd (KSF) was in financial difficulties. The Bank of England required KSF to credit to a trust account all future deposits. KSF later went into insolvency. Some deposits had been credited to the . .
Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 19 July 2022; Ref: scu.276664