Tag: Insolvency

Ellis-Carr v Levy (Home Rights : Requirements To Establish Interest): LRA 19 Nov 2013

LRA Family Law Act 1996 – home rights notice – meaning and effect of ‘intention’ in statute – Applicant’s evidence – property never occupied as a matrimonial home – whether husband ever had entitlement to occupy by virtue of a beneficial estate or interest or application – application opposed by Applicant’s husband’s trustee in bankruptcy – effect of orders relating to property made by Registrar Derrett in the bankruptcy upheld by Norris J on appeal – Mental Capacity Act 2005 – CPR 21 – s283A Insolvency Act – s261 Enterprise Act 2002

Judge Hargreaves
[2013] LRAD 2012 – 1122
Bailii
Family Law Act 1996

Registered Land, Family, Human Rights, Insolvency

Updated: 01 December 2021; Ref: scu.521988

Salliss v Hunt and Others: ChD 10 Feb 2014

The bankrupt appealed from a refusal of his challenge to the remuneration claimed by his trustees in that bankruptcy.
Held: On an an application for annulment of a bankruptcy, there was no need of principle why the court should allow for a debt due to a creditor, where that creditor knew of the bankruptcy but had not proved for it and had made a proper and commercial decision not to do so in the future.

Sir Terence Etherton Ch
[2014] EWHC 229 (Ch), [2014] 2 All ER 1002, [2014] BPIR 754, [2014] 1 WLR 2402, [2014] WLR(D) 56
Bailii, WLRD
Insolvency Act 1986, Insolvency Rules 1986
England and Wales

Insolvency

Updated: 29 November 2021; Ref: scu.521173

Bishop v Golstein: CA 5 Feb 2014

Maurice Kay LJ VP CA, Sullivan, Briggs LJJ
[2014] EWCA Civ 10, [2014] WLR(D) 75, [2014] 2 WLR 1448, [2014] 1 Ch 455, [2014] 3 All ER 397
Bailii
England and Wales
Citing:
See Also – Golstein v Bishop ChD 2-May-2013
. .

Cited by:
See Also – Golstein v Bishop and Another ChD 2-Sep-2016
Appeal against refusal of challenge to approval on an Individual Voluntary Arrangement. . .
See Also – Golstein v Bishop and Another ChD 7-Nov-2016
. .

Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 29 November 2021; Ref: scu.521042

Brown and Another (Joint Administrators of Oceancrown Ltd) v Stonegale Ltd: SCS 11 Dec 2013

Administrators sought to have set aside transactions made before the companies went into administration.
Held: Rejecting the director’s arguments, the Lord Ordinary said: ‘No one paid anything for 110, 210, 260 Glasgow Road and 64 Roslea Drive. The sellers, namely Oceancrown, Loanwell and Questway, did not receive anything in return for the dispositions under challenge. They gifted the properties to the dispones . . That the bank was prepared to discharge the standard securities over all five properties in return for the monies forwarded to it does not create a consideration given in return for the subsequent dispositions to Stonegale. No party gave the sellers anything in return for the conveyances under challenge. Any value received was the value paid in respect of number 278. That is what was transferred to McClure Naismith. In my view nothing else alters that basic fact. All that happened was that Strathcroft, on the direction of Mr Pelosi senior, paid the bank monies which were designed to, and did persuade the bank to discharge the standard securities over the five properties, all in order to facilitate the subsequent gratuitous sales. Neither that payment, nor any consequential reduction in indebtedness, was in consideration for the subsequent transactions. It was a mechanism for allowing the inter-company transfers which it was hoped would achieve the retention of the ‘profit’ on 278 within the group (and regarding Roslea Drive, Mr Pelosi junior) – and free of the bank’s securities.’ . . And ‘The dispositions under challenge were gratuitous alienations. Were it otherwise the bank would have received in excess of andpound;4m, and the overall indebtedness would have been reduced by that amount. The price obtained for 278 was used to allow the other Glasgow Road properties to be transferred without consideration to another company which, nominally at least, was owned and controlled by Mr Pelosi junior, and, in the case of 64 Roslea Drive, to him personally.’

Lord Ordinary Lord Malcom
[2013] ScotCS CSOH – 189
Bailii
Insolvency Act 1986 242
Cited by:
Appeal from – Brown and Another v Stonegale Ltd and Another SC 22-Jun-2016
The insolvent companies administrators sought reduction of alienations by the companies before entering into administration. It was said that their banker lenders had been misled as to the values of secured properties, agreeing to their release . .

Lists of cited by and citing cases may be incomplete.

Scotland, Insolvency

Updated: 27 November 2021; Ref: scu.519235

Re International Tin Council: ChD 1987

An order for the winding up of a foreign company operates universally, applies to all the foreign company’s assets and brings into play the full panoply of powers and duties under the Insolvency Act 1986 like any other winding up order. Millett J said: ‘The statutory trusts extend to [foreign] assets, and so does the statutory obligation to collect and realise them and to deal with their proceeds in accordance with the statutory scheme.’
The court said that it was to ask the question, ‘Could Parliament reasonably have intended that the International Tin Council should be subject to the winding-up process of the UK insolvency legislation?’
Millet J said of the nature of corporate insolvency: ‘Although a winding up in the country of incorporation will normally be given extra-territorial effect, a winding up elsewhere has only local operation. In the case of a foreign company, therefore, the fact that other countries, in accordance with their own rules of private international law, may not recognise our winding up order or the title of a liquidator appointed by our courts, necessarily imposes practical limitations on the consequences of the order. But in theory the effect of the order is world-wide. The statutory trusts which it brings into operation are imposed on all the company’s assets wherever situate, within and beyond the jurisdiction. Where the company is simultaneously being wound up in the country of its incorporation, the English court will naturally seek to avoid unnecessary conflict, and so far as possible to ensure that the English winding up is conducted as ancillary to the principal liquidation. In a proper case, it may authorise the liquidator to refrain from seeking to recover assets situate beyond the jurisdiction, thereby protecting him from any complaint that he has been derelict in his duty. But the statutory trusts extend to such assets, and so does the statutory obligation to collect and realise them and to deal with their proceeds in accordance with the statutory scheme.’

Millet J
[1987] Ch 419, [1987] 2 WLR 1229, [1987] 1 All ER 890
England and Wales
Citing:
See Also – Maclaine Watson and Co Ltd v International Tin Council ChD 1987
Millett J said: ‘The ITC contend there is no jurisdiction to make such an order [an order for discovery of assets] in the absence of a Mareva injunction. It is, however, fallacious to reason from the fact that an order for discovery can be made as . .

Cited by:
Appeal from – Re International Tin Council CA 1989
Creditors sought to treat the International Tin Council as an ‘association’ for the purposes of a provision under the Companies Act 1985 allowing for unregistered companies to be wound up.
Held: The decision in Re a Company was binding. The . .
Cited – Hackney v Side By Side (Kids) Ltd QBD 14-Jul-2003
The defendant sought a stay of a warrant for possession. It had submitted to an order for possession by consent in return for a promise of alternative accomodation. They sought a stay under section 89, saying that the claimant had not complied with . .
Cited – McGrath and Honey v McMahon and Others, Re HIH Casualty and General Insurance Ltd and others CA 9-Jun-2006
The insurance company was to be wound up. It operated internationally but was registered in Australia. The Australian liquidator now sought an order for the transfer of assets held here to Australia.
Held: It was inevitable that cross border . .
Cited – McGrath and others v Riddell and others HL 9-Apr-2008
(Orse In Re HIH Casualty and General Insurance Ltd)
HIH, an Australian Insurance company, became insolvent. An order was sought for the collection and remission of it assets in England under a letter of request from the Australia Court.
Cited – Bilta (UK) Ltd and Others v Nazir and Others ChD 30-Jul-2012
The company was said to have engaged in a fraud based on false European Trading Scheme Allowances, and had been wound up by the Revenue. The liquidators, in the company name, now sought recovery from former directors and associates.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Jurisdiction

Updated: 19 November 2021; Ref: scu.185746

Clarke v Cognita Schools Ltd (T/A Hydesville Tower School): ChD 1 Apr 2015

The claimants sought to have set aside statutory demands served to enforce judgmens, they said under a discrepancy. The order refusing their application should they said, have notified them of their right to appeal.
Held: None of the applicable rules expressly required otification that an appeal was available.

Newey J
[2015] EWHC 932 (Ch), [2015] WLR 3776, [2015] 2 All ER (Comm) 663, [2015] BPIR 444, [2015] WLR(D) 164, [2015] 1 WLR 3776, [2016] 1 All ER 477
Bailii, WLRD
Insolvency Act 1986 264, Insolvency Rules 1986, Civil Procedure Rules 3.3(5)
England and Wales

Insolvency, Civil Procedure Rules

Updated: 12 November 2021; Ref: scu.545433

Horton v Henry: CA 7 Oct 2016

No obligation on bankrupt to draw on pension fund

The trustee in bankruptcy appealed against a decision dismissing his application for an income payments order pursuant to section 310 of the 1986 Act in respect of income which might become payable to the respondent from his personal pension policies, were he to exercise his contractual rights under those policies to draw down a lump sum or other payments.
Held: The trustee’s appeal failed. The bankrupt could not be obliged to take a lump sum from his pension funds so that it could to be treated as an income to supprot an Income Payment Order. Section 310 did not allow a reading which characterises a pension holder’s contractual rights under their pension to elect, after reaching a certain age, to draw down, or ‘crystallise’ that pension, in the form of a lump sum or income payments. Such an entitlement was after acquired property, and not available to the trustee.
The judge in Raithatha had failed properly to allow for the depth of changes introduced by the 1999 Act.

McFarlane, Gloster LJJ, Sir Stanley Burnton
[2016] EWCA Civ 989, [2016] WLR(D) 506
Bailii, WLRD
Insolvency Act 1986 310, Welfare Reform and Pensions Act 1999 11
England and Wales
Citing:
Cited – Raithatha v Williamson ChD 4-Apr-2012
A bankrupt’s present entitlement to compel payment of pension benefits fell to be included in the assessment of his income within the meaning of section 310(7) of the Insolvency Act. . .
Cited – Horton v Henry ChD 17-Dec-2014
The trustee in bankruptcy sought to oblige the bankrupt to make a capital draw on pension fund assets in order to support an Income Payment Order.
Held: The judge dismissed the application for an IPO. The court had no power under section 310 . .
Cited – In Re Landau (A Bankrupt) ChD 1-Dec-1996
At the date of the bankruptcy the bankrupt was entitled to a pension, payable in the future on his attaining the age of 65 years. He was aged 61 when the bankruptcy order was made, and 64 when it was discharged. The trustee claimed to be entitled to . .
Cited – Dennison v Krasner, Lesser, Lawrence CA 6-Apr-2000
A retirement annuity or personal pension was part of a bankrupt’s estate before the recent Act, and vested immediately in the trustee on the bankruptcy. As such there was no need to make application to the court under s310 for an income payment . .
Cited – Blight and Others v Brewster ChD 9-Feb-2012
A judgment creditor, applied for an order requiring Mr Brewster, his judgment debtor, to elect to draw down a lump sum from his pension in order to enable the judgment creditor to obtain a third party debt order against the pension trustees.
Cited – In the Estate of Borger Deceased 1912
Supreme Court Victoria – Will – Construction – Legacy, lapse of – Death of beneficiary ‘before he shall have become entitled,’ meaning of.
A testator devised his real estate to trustees upon trust for his brother J until his youngest surviving . .
Cited – Barclays Bank Plc v Holmes and others ChD 21-Nov-2000
. .
Cited – Westminster City Council v National Asylum Support Service HL 17-Oct-2002
The applicant sought assistance from the local authority. He suffered from spinal myeloma, was destitute and an asylum seeker.
Held: Although the Act had withdrawn the obligation to provide assistance for many asylum seekers, those who were . .

Lists of cited by and citing cases may be incomplete.

Insolvency

Updated: 11 November 2021; Ref: scu.570113

Williams v Glover and Another: ChD 4 Jun 2013

The company’s liquidator had refused to assign to its former directors a claim for a reduction in corporation tax which they were funding.
Held: Such a claim did not constitute property within section 436, and was not a chose capable of assignment. All that could be assigned would be the right to appeal. Since the former directors were no longer officers of the company they could not act in its name to pursue the appeal.

Pelling QC HHJ
[2013] EWHC 1447 (Ch), [2014] 1 WLR 166, [2013] BPIR 576, [2014] 1 BCLC 474, [2013] WLR(D) 223, [2014] 2 All ER 448
Bailii, WLRD
Insolvency Act 1986 436
England and Wales
Citing:
Cited – Torkington v Magee 11-Jul-1902
Chose in Action defined
The effect of the 1873 Act was essentially procedural and it did not render choses in action that had not previously been assignable in equity capable of assignment.
Channell J defined a debt or other legal chose in action: ”Chose in Action’ . .
Cited – Heath v Tang, Stevens v Peacock CA 11-Aug-1993
The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Leading Case

Updated: 11 November 2021; Ref: scu.510171

Lewis and Another v Metropolitan Property Realizations Ltd: ChD 21 Nov 2008

Nothing in the 2003 changes to the 1986 Act operated so that a trustee in bankruptcy who sold an interest of the bankrupt for a deferred payment had not realised the interest. Accordingly, on the bankrupt’s release, that interest had been assigned out of the bankrupt’s estate and did not revert to him.

Proudman J
[2008] EWHC 2760 (Ch), Times 09-Dec-2008
Bailii
Insolvency Act 1986 283A(3)(a), Enterprise Act 2002 8261
England and Wales

Insolvency

Updated: 11 November 2021; Ref: scu.278233

In re Horsley and Weight Ltd: CA 1892

The liquidator sought to set aside a pension policy acquired by the company for the benefit of a retiring director. The question was whether the decision to acquire the pension had been ratified by the shareholders.
Held: There had been no misfeasance by the directors.
A company is bound in a matter which is intra vires the company by the unanimous agreement of its members, even where that agreement is given informally and without any meeting.
Templeman LJ said: ‘There could have been gross negligence, amounting to misfeasance. If the company could not afford to pay out andpound;10,000 and was doubtfully solvent so that the expenditure threatened the continued existence of the company, the directors ought to have known the facts and ought at any rate to have postponed the grant of the pension until the financial position of the company was assured.’
Cumming-Bruce LJ referred to a suspicion that at the time of the decision the company was not in a position to pay the money to the respondent. But that evidence ‘fell far short of proof that the directors should at the time have appreciated that the payment was likely to cause loss to the creditors’.
Buckley LJ emphasised that the good faith of the directors was not questioned and there was no suggestion that they had failed to apply their minds honestly to the question whether the decision was a fair and proper thing for the company to do in the light of the company’s financial state as known to them at the time.

Templeman, Cumming-Bruce LJ
[1982] Ch 442, [1982] 3 WLR 431, [1982] 3 All ER 1045
England and Wales

Company, Insolvency

Leading Case

Updated: 11 November 2021; Ref: scu.570504

Wright and Another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd: ChD 6 Mar 2018

IVA is a special form of contract

Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on its cessation. The liquidators challenged the clause as a penalty.
Held: The additional sums falling due to Prudential upon the termination of the CVA were payable as an administration expense or administration expenses for the period during which the (original) administrators were in possession of the premises for the purposes of the administration. Although the arrangement was a contract, not all laws applicable to contracs applied to it. The law of penaties applied to protect a party suffering after some oppressive contract creation circumstance. An IVA was a creature of statute, and its terms set by the company’s representatives, and no element of negotiation arose and therefore there was no opportunity to argue repression of for a penalty.

Christopher Pymont QC
[2018] EWHC 402 (Ch), [2018] WLR(D) 143
Bailii, WLRD
Insolvency Act 1986 112
England and Wales
Citing:
Cited – Johnson and Another v Davis and Another CA 18-Mar-1998
The court was asked: ‘whether or not the appellants were released from their obligation under a covenant to indemnify the respondents against claims arising under a lease by reason of the terms of an individual voluntary arrangement made under part . .
Cited – Commissioners of Inland Revenue v Adam and Partners Ltd ChD 2000
. .
Cited – Lloyds Bank Plc v Ellicott CA 8-Feb-2002
A voluntary arrangement has contractual effect. . .
Cited – Cooden Engineering Co Ltd v Stanford CA 1953
A payment to be made on a wrongful termination of a lease by a tenant, will attract consideration of the law of penalties, for notwithstanding the requirement for acceptance of it, the amount to be paid is, ‘plainly a sum to be paid in consequence . .
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 – Tanner v Everitt ChD 2004
Mann J discussed the status of an IVA in contract law: ‘The arrangement is therefore contractually based, with the statute providing the consent or deemed consent of the otherwise dissenting parties’ . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Cited – Thompson v Hudson HL 1869
An agreement is not penalty if it simply reserves to a creditor the right to have his debt paid in full in the event that his debtor does not pay on a due date a smaller sum that he has agreed to accept in satisfaction
Lord Hatherley said: ‘I . .
Cited – Everitt v Budhram and Another ChD 20-May-2009
The trustee in bankruptcy appealed against rejection of his claim for the sale of the home in which the bankrupts each held a one half share. The bankruptcies arose from non payment of council tax. The principle sums had been repaid, and the . .
Cited – Cavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
Cited – Philips (Hong Kong) Ltd v The Attorney General of Hong Kong PC 9-Feb-1993
After referring to two Australian cases on penalty clauses in contracts: ‘These statements assist by making it clear that the court should not adopt an approach to provisions as to liquidated damages which could, as indicated earlier, defeat their . .
Cited – Sea Voyager Maritime Inc and Others v Bielecki trading as Hughes Hooker and Co ChD 23-Oct-1998
The creditor alleged a right to recover against the estate citing an unfair prejudice from the IVA.
Held: He had been unfairly prejudiced. The IVA precluded him, like all the other unsecured creditors, from suing the debtor for the full amount . .
Cited – Welsby v Brelec Installations Limited ChD 2001
The CVA provided for the payment by the company of contributions to the supervisors for distribution to creditors. The company went on into a creditors’ voluntary liquidation.
Held: The sums held by the supervisors in trust for the CVA . .
Cited – In re Lundy Granite Co; Ex parte Heavan CA 1871
The landlord of Lundy Island, which was let to a third party, distrained upon goods of the company which had been left upon the tenant’s property. The distraint was for rent which had fallen due more than a year after the winding up order. The . .
Cited – In re Smith and Hartogs 1895
A landlord agreed to a reduction of the rent payable for the time being, with the balance in effect being added to the rent payable later in the term. The tenant failed to pay the reduced rent.
Held: The landlord was entitled to distrain for . .
Cited – In re ABC Coupler and Engineering Co Ltd (No 3) ChD 1970
The liquidator when appointed closed down the business which had been conducted on the premises, had the company’s plant and machinery valued and thought about what he should do.
Held: The rent did not become a liquidation expense until some . .
Cited – In re Downer Enterprises Ltd ChD 1974
The company was the assignee of a lease. The rent appears to have been payable in advance on the usual quarter days. The company went into liquidation in November 1971. At some time before April 1972 the liquidator instructed agents to market the . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Cited – Pillar Denton Ltd and Others v Jervis and Others CA 24-Feb-2014
The corporate tenant became insolvent, but the administrators continued in occupation. The parties now disputed whether the rent (payable in advance) was a provable debt or an administration expense.The court was asked whether a company in . .
Cited – Oakrock Ltd v Travelodge Hotels Ltd and Others TCC 16-Jan-2015
Application by the first defendant for summary judgment against the claimant for the whole of the claim on the ground that the claim has no real prospect of success and that there is no other compelling reason why the case should be disposed of at . .
Cited – Narandas-Girdhar and Another v Bradstock CA 16-Feb-2016
Appeal from rejection of claim to have set aside Individual Voluntary Arrangement . .
Cited – In re Silkstone and Dodworth Coal and Iron Co ChD 1881
A mining lease provided that the rent was payable half-yearly in arrears. Rent became payable after presentation of the winding-up petition and a winding-up order was made after the rent became payable. The lease was subject to a proviso for . .
Cited – Shackell v Chorlton 1895
. .
Cited – Re HH Realisations Ltd ChD 1975
The liquidator of a company ceased to be liable to pay the rent under the company’s lease in full from the time it gave notice to the landlord that it was seeking authority to disclaim the lease, even though it remained in occupation for nearly two . .
Cited – Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd CA 6-Apr-2006
Moore-Bick LJ discussed whether the court should give effect to a non-reliance clause in a contract saying: ‘It is common to include in certain kinds of contracts an express acknowledgement by each of the parties that they have not been induced to . .
Cited – Trident Turboprop (Dublin) Ltd v First Flight Couriers Ltd Comc 17-Jul-2008
Trident entered into Aircraft Operating Lease Agreements in identical terms with First Flight in respect of two ATP model aircraft. The leases represented the culmination of negotiations between a representative of the manufacturer, BAE Systems . .

Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Insolvency

Updated: 10 November 2021; Ref: scu.605847

Harms Offshore AHT Taurus Gmbh and Co KG v Bloom and Others: CA 26 Jun 2009

The court had granted to the liquidators of a company a mandatory injunction requiring the appellant German companies to attempt to obtain the release of assets from attachment by the court in new York.
Held: The appeal was dismissed. The statutory prohibition against creditors bringing proceedings against a company being wound up by the court is not extra-territorial. The protection of the assets of a company in administration is not to be regarded by the Court as differing in substance from the protection of the assets of a company in compulsory liquidation. In both cases, the assets of the company are dealt with by an officer appointed by the Court in accordance with statutory duties.
The conduct of the Appellants and the circumstances of the attachments brought it into the exceptional category in which the grant of injunctive relief is justified, notwithstanding comity and notwithstanding the outstanding application of the Administrators in New York.

Lord Justice Ward, Lord Justice Stanley Burnton and Sir John Chadwick
[2009] EWCA Civ 632, Times 10-Jul-2009, [2009] Bus LR 1663, [2010] 1 Ch 187, [2010] 2 WLR 349
Bailii
Insolvency Act 1986
England and Wales
Citing:
Cited – In Re Oriental Inland Steam Company ex parte Scinde Railway Company CA 1874
The liquidator obtained an order requiring a creditor who had attached assets in India to return them to the company in liquidation.
Sir W M James LJ said: ‘The winding-up is necessarily confined to this country. It is not immaterial to . .
Cited – Mitchell v Carter ChD 1997
Section 183 of the 1986 Act, which precludes a creditor who levies execution or attaches a debt after commencement of a winding up, from retaining the benefit of his execution or attachment, does not apply to executions or attachments in foreign . .
Cited – Re Vocalion (Foreign) Ltd 1932
The section only applies only to proceedings pending in the UK, and not to proceedings in a foreign Court. The Court has an equitable jurisdiction in personam to restrain a respondent properly served in this country from proceeding with an action . .
Cited – Societe Nationale Industrielle Aerospatiale v Lee Kui Jak, Yong Joon Kim and, Lee Kui Jak (F) PC 14-May-1987
Brunei Darussalam – The Board was asked where a civil claim should be tried.
Held: The court stated some principles governing the grant of anti-suit injunctions restraining foreign proceedings. The inconvenience of a forum is of itself not a . .
Cited – Polly Peck International Plc v The Marangos Hotel Company Ltd and Others CA 7-May-1998
Leave had been given for the insolvent plaintiff company to bring proceedings. The defendant now challenged that leave.
Held: A claim that a massively insolvent company had wrongfully occupied Turkish Cypriot property would not allow a claim . .
Cited – Barclays Bank v Homan CA 1993
If the conduct of a creditor can be castigated as oppressive or vexatious the Court can and should grant relief in order to protect the performance by administrators of their functions and duties. . .

Lists of cited by and citing cases may be incomplete.

Jurisdiction, Insolvency

Leading Case

Updated: 09 November 2021; Ref: scu.347220

USDAW And Wilson v WW Realisation 1 Ltd, in liquidation: ECJ 30 Apr 2015

ECJ (Judgment) Reference for a preliminary ruling – Social policy – Collective redundancies – Directive 98/59/EC – Article 1(1)(a) – Meaning of ‘establishment’ – Method of calculating the number of workers made redundant

T von Danwitz, P
C-80/14, [2015] EUECJ C-80/14, ECLI:EU:C:2015:291
Bailii
Directive 98/59/EC 1(1)(a)
European

Employment, Insolvency

Updated: 09 November 2021; Ref: scu.546229

Williams v Lawrence and Another: ChD 28 Jul 2011

The claimant, as trustee for the deceased’s insolvent estate, sought a declaration that a transfer of the deceased’s share in property made by the executors was void as being at an undervalue. The property was subject to a right of occupation in favour of one of the purchaser, one of the defendants, and therefore reduced in value.
Held: The effect of Regulation 12 was to allow such an application to go back much further than could happen in a normal insolvency, but in this case, at the time of the transfer, the parties knew of the estate’s debts. On the facts, no common intention to create a binding right was established, and therefore the sale was at a gross undervalue, and was to be set aside.

David Cooke J
[2011] EWHC 2001 (Ch)
Bailii
Administration of Insolvent Estates of Deceased Persons Order 1986 (SI 1986/1999)
England and Wales
Citing:
Cited – Lloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
Cited – Pascoe v Turner CA 1-Dec-1978
The defendant had been assured by the plaintiff that ‘the house is yours and everything in it.’ In reliance on that assurance she carried out improvements to the house. Although the improvements were modest, their cost represented a large part of . .
Cited – Kernott v Jones CA 26-May-2010
The unmarried couple bought a property together. Mr K appealed against an award of 90% of the property to his former partner. The court was asked, whether, following Stack v Dowden, it was open to the court to find that the parties had agreed that . .
Cited – James v Thomas CA 23-Nov-2007
The claimant sought an interest in the property registered in the sole name of the respondent. The respondent had inherited a share in the property, and then bought out the interests of his siblings with support of a loan. The claimant had made no . .
Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
Cited – Oxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Insolvency, Trusts

Updated: 09 November 2021; Ref: scu.442271

In re Brightlife Ltd: ChD 1987

Parties contractual freedom to be respected

A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not authorise the selling, factoring or discounting . . of its book debts or other negotiable instruments’
Held: Whilst purporting to create a fixed charge over present and future book debts and imposing restrictions on the sale, factoring or discounting of book debts, the debenture did not require the chargor to pay them into an account with the chargee. Reference to a ‘first specific charge’ over book debts had to yield to the only conclusion from the rights in fact granted that the charge over book debts was a floating charge only.
Hoffmann J said: ‘But a floating charge is consistent with some restriction upon the company’s freedom to deal with its assets. For example, floating charges commonly contain a prohibition upon the creation of other charges ranking prior to or pari passu with the floating charge. Such dealings would otherwise be open to a company in the ordinary course of its business.’ and
‘I do not think that the bank balance falls within the term ‘book debts or other debts’ as it is used in the debenture. It is true that the relationship between banker and customer is one of debtor and creditor. It would not therefore be legally inaccurate to describe a credit balance with a banker as a debt. But this would not be a natural usage for a businessman or accountant. He would ordinarily describe it as ‘cash at bank’: compare the balance sheet formats in Part I, section B of Schedule 4 to the Companies Act 1985′ and ‘In this debenture, the significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The significant feature of the Brightlife debenture was that the company was free to collect its debts and pay the proceeds into its bank account: ‘Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The company had given a charge over its book debts to te bank. The bank asserted that it was a first specific charge and purported to restrict the company’s right to factor its debts without the bank’s consent. A debenture holder then gave notice to fix the charge, but only a week before a voluntary winding up resolution.
Held: The charge on the book debts was a floating charge, and having crystallised a week before, it had priority over the other debts.
Although clause 3(A)(ii)(a) referred to a ‘first specific charge’ over book debts and others, ‘the rights over the debts created by the debenture were in my judgment such as to be categorised in law as a floating charge.’ . . And a ‘significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge . . I do not think that it is open to the courts to restrict the contractual freedom of parties to a floating charge on such grounds. The floating charge was invented by Victorian lawyers to enable manufacturing and trading companies to raise loan capital on debentures . . without inhibiting its ability to trade. . The public interest requires a balancing of the advantages to the economy of facilitating the borrowing of money against the possibility of injustice to unsecured creditors . . arguments for and against the floating charge are matters for Parliament rather than the courts.’

Hoffmann J
[1987] 1 Ch 200, [1988] VLY 306
England and Wales
Citing:
Distinguished – Siebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .
Distinguished – In Re Keenan Bros Ltd 1986
(Supreme Court of the Republic of Ireland) A debenture conferred a fixed charge on book debts. It specifically provided that withdrawals from the account to which the proceeds of the book debts had to be credited might only be made with the prior . .

Cited by:
Applied – Agnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle PC 5-Jun-2001
(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
Considered – Re: A Company (No. 005009 of 1987), ex parte Copp ChD 1988
MC Bacon Ltd had borrowed money from a bank. The loan was unsecured. The company got into financial difficulty. The bank commissioned a report on the company’s financial affairs; and insisted on the grant of a debenture to secure the company’s . .
Applied – Re: New Bullas Trading Ltd ChD 5-Apr-1993
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge. . .
Cited – Buchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
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 . .
Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Cited – In Re Westmaze Ltd (In Administrative Receivership) ChD 15-May-1998
Westmaze were mechanical engineers. They gave a charge to secure borrowings, which described itself as a fixed charge.
Held: A Charge over a company’s book and trading assets was in fact floating even though described as a fixed charge unless . .

Lists of cited by and citing cases may be incomplete.

Banking, Company, Insolvency

Leading Case

Updated: 09 November 2021; Ref: scu.181234

Federatie Nederlandse Vakvereniging and Others: ECJ 22 Jun 2017

Employee protection limited on pre-pack insolvency

ECJ Reference for a preliminary ruling – Directive 2001/23/EC – Articles 3 to 5 – Transfers of undertakings – Safeguarding of employees’ rights – Exceptions – Insolvency proceedings – ‘Pre-pack’ – Survival of an undertaking : Judgment

[2017] WLR(D) 417, ECLI:EU:C:2017:489, [2017] EUECJ C-126/16
WLRD, Bailii
Council Directive 2001/23/EC
European

Insolvency, Employment

Updated: 09 November 2021; Ref: scu.588266

Wilson v United Counties Bank Ltd: HL 1920

Bank’s duty to client’s reputation and credit

Major Wilson had left England on active service soon after the beginning of the Great War, leaving his business affairs, in a fairly precarious state, with his bank. The jury found that the bank had failed in its duty to supervise his business affairs and to take reasonable steps to maintain his credit and reputation. Major Wilson was made bankrupt and he and his trustee in bankruptcy joined in an action against the bank. The jury awarded damages of about andpound;45,000 for depreciation in the bankrupt’s business and estate caused by the bank’s negligence (although the House was not unanimous as to whether this finding was justified on the evidence) and andpound;7,500 for damage to his credit and reputation.
Held: The former sum was recoverable by the trustee in bankruptcy, and the latter by the bankrupt personally, even though the damages arose from the same breach of contract.
Lord Birkenhead applied Rolin, saying: ‘The defendants undertook for consideration to sustain the credit of the trading customer. On principle the case seems to me to belong to that very special class of cases in which a banker, though his customer’s account is in funds, nevertheless dishonours his cheque. The ratio decidendi in such cases, is so obviously injurious to the credit of the trader that the latter can recover, without allegation of special damage, reasonable compensation for the injury due to his credit.’
Lord Atkinson said: ‘If one man inflicts an injury upon another the resort by the sufferer to reasonable expedients for the bona fide purpose of counteracting, curing or lessening the evil effects of the injury done him, does not necessarily absolve the wrongdoer, even though the sufferer’s efforts should, in the result, undesignedly aggravate the result of injury.’

Lord Atkinson, Lord Birkenhead LC
[1918-19] All ER Rep1035, [1920] LR AC 102, [1920] AC 102
England and Wales
Citing:
Cited – Beckham v Drake HL 11-Jul-1849
Non-property assets do not pass on bankruptcy
An action was brought on a contract for hiring and service, where the plaintiff was to serve for seven years, and the defendant to pay weekly wages during that time; and the breach was a dismissal during the seven years. The plaintiff, after this . .
Followed – Rolin And Another v Steward, Public Officer of The East of England Bank 8-May-1854
Substantial damages may be recovered against a banker, for dishonouring an acceptance and cheques of a customer, there being sufficient assets in his hands at the time to meet them. . .

Cited by:
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 – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Shah and Another v HSBC Private Bank (UK) Ltd QBD 26-Jan-2009
The claimants sought damages after delays by the bank in processing transfer requests. The bank said that the delays were made pending reports of suspected criminal activity. The bank’s delay had stigmatised the claimant causing further losses. The . .
Cited – Kpohraror v Woolwich Building Society CA 10-Jan-1996
The defendants had wrongfully refused payment of the claimant’s cheque for pounds 4,550. The error was realised on the same day, and corrected. The master awarded damages of pounds 5,550 as general damages to the claimant’s credit by reason of the . .
Cited – Kpohraror v Woolwich Building Society CA 1996
The Society, acting as a bank, had at first failed to pay its customer’s cheque for andpound;4,550, even though there were sufficient funds. The bank said that it had been reported lost. The customer sought damages to his business reputation.
Insolvency, Damages, Banking

Leading Case

Updated: 02 November 2021; Ref: scu.185413

Ralph Schmid (Acting As Liquidator of The Assets of Aletta Zimmermann) v Lilly Hertel: ECJ 16 Jan 2014

ECJ Reference for a preliminary ruling – Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Insolvency proceedings – Action to set a transaction aside by virtue of the debtor’s insolvency – Defendant resident in a third country – Jurisdiction of the court of the Member State where the debtor has the centre of his main interests

A. Tizzano, P
[2014] EUECJ C-328/12, [2014] 1 WLR 633, [2014] BPIR 504, [2014] WLR(D) 5, [2014] CEC 846, ECLI:EU:C:2014:6, [2014] 1 WLR 633, [2014] ILPr 11
Bailii, WLRD
Regulation (EC) No 1346/2000
European
Citing:
Opinion – Ralph Schmid (Acting As Liquidator of The Assets of Aletta Zimmermann) v Lilly Hertel ECJ 10-Sep-2013
ECJ Opinion – Judicial co-operation in civil matters – Insolvency proceedings – Regulation (EC) No 1346/2000 – Jurisdiction of the court of the Member State in which the centre of the debtor’s main interests is . .

Cited by:
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.

Insolvency

Leading Case

Updated: 02 November 2021; Ref: scu.520760

McGrath and others v Riddell and others: HL 9 Apr 2008

(Orse In Re HIH Casualty and General Insurance Ltd)
HIH, an Australian Insurance company, became insolvent. An order was sought for the collection and remission of it assets in England under a letter of request from the Australia Court.
Held: Once it was accepted that an English court may order the liquidator here to remit funds to a foreign liquidator, it was clear that that foreign liquidator would apply the local rules for distribution: ‘the court had jurisdiction at common law, under its established practice of giving directions to ancillary liquidators, to direct remittal of the English assets, notwithstanding any differences between the English and foreign systems of distribution. These differences are relevant only to discretion.’
Lord Hoffmann (with whom Lord Walker was in full agreement) said that remission could be ordered at common law. He referred to a ‘general principle of private international law that bankruptcy (whether personal or corporate) should be unitary and universal. There should be a unitary bankruptcy proceedings in the court of the bankrupt’s domicile which receives worldwide recognition and it should apply universally to all the bankrupt’s assets.’ this was ‘a principle rather than a rule . . heavily qualified by exceptions on pragmatic grounds.’ and ‘The primary rule of private international law which seems to me applicable to this case is the principle of (modified) universalism, which has been the golden thread running through English cross-border insolvency law since the 18th century. That principle requires the English courts, so far as is consistent with justice and UK public policy, co-operate with the courts in the country of the principal liquidation to ensure that all the company’s assets are distributed to its creditors under as single system of distribution.’
Lord Scott, whilst agreeing that it is desirable as a general proposition that there should be one universally applicable scheme of distribution of the assets of an insolvent company, did not agree with Lord Hoffmann that the court had power to remit the assets to Australia other than pursuant to the statutory power.
Lord Neuberger’s speech was to the same effect in this regard.
Lord Phillips agreed that it was in accordance with international comity and the principle of universalism that the assets should be remitted to Australia pursuant to the statutory power but did not stray into the ‘controversial area’ of whether, in the absence of statutory jurisdiction, the same result could have been reached under a discretion available under the common law

Lord Hoffmann, Lord Phillips of Worth Matravers, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Neuberger of Abbotsbury
Times 09-Apr-2008, [2008] UKHL 21, [2008] 1 WLR 852, [2008] BPIR 581, [2008] Lloyd’s Rep IR 756, [2008] BCC 349, [2008] 3 All ER 869, [2008] Bus LR 905
Bailii, HL
Insolvency Act 1986 426
England and Wales
Citing:
Cited – Re Matheson Brothers Ltd 1884
The court appointed a provisional liquidator to protect the English assets of a New Zealand company which was being wound up in New Zealand. Kay J said: ‘[What] is the effect of the winding up order which it is said has been made in New Zealand? . .
Cited – Re International Tin Council ChD 1987
An order for the winding up of a foreign company operates universally, applies to all the foreign company’s assets and brings into play the full panoply of powers and duties under the Insolvency Act 1986 like any other winding up order. Millett J . .
Appeal from – McGrath and Honey v McMahon and Others, Re HIH Casualty and General Insurance Ltd and others CA 9-Jun-2006
The insurance company was to be wound up. It operated internationally but was registered in Australia. The Australian liquidator now sought an order for the transfer of assets held here to Australia.
Held: It was inevitable that cross border . .
Cited – Cambridge Gas Transport Corp v Official Committee of Unsecured Creditors (of Navigator Holdings Plc and Others) PC 16-May-2006
(Isle of Man) A scheme of arrangement was proposed for a company with involvement in several jurisdictions. An order in New York sought assistance in the vesting of shares and assets in the Isle of Man in the creditors committee. Cambridge was a . .
Cited – In the Matter of Drax Holdings Limited and in the Matter of InPower Limited ChD 17-Nov-2003
A company incorporated in Jersey comes within the Act for the purposes of the section. An English court has jurisdiction to wind up a foreign company if it has assets here or some other sufficient connection with this country. . .
Cited – Re Bank of Credit and Commerce International SA (No 10) ChD 1997
An English court has power in an ancillary liquidation (provisional or final) to authorise the English liquidators to transmit the English assets to the principal liquidators in the company’s home country. The bases for this are the principles of . .
Cited – Forster v Wilson 1843
English law regards insolvency set off as a way of achieving substantial justice between the parties. . .
Cited – 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 . .
Cited – England v Smith CA 8-Dec-1999
A liquidator of an Australian company sought damages from a ‘world-wide’ company Arthur Andersen’ and sought in particular to examine a partner in the UK. Examination was at first refused since an English court would not make a similar order. That . .
Cited – Re Paramount Airways Ltd (In Administration) CA 8-Apr-1992
It was said that there had been a transction at an undervalue within section 238. It was given effect by a transfer to a bank in Jersey, from which recovery was no sought. The bank claimed that the section did not have extra-territorial effect.
Cited – In re English, Scottish and Australian Chartered Bank 1893
Vaughan Williams J said: ‘One knows that where there is a liquidation of one concern the general principle is – ascertain what is the domicile of the company in liquidation; let the court of the country of domicile act as the principal court to . .
Cited – Ayerst (Inspector of Taxes) v C and K (Construction) Ltd HL 1976
A resolution or order for winding up of a company divests it of the beneficial interest in its assets. They become a fund which the company thereafter holds in trust to discharge its liabilities. Where a company is wound up in this country, its . .
Cited – Re Suidair International Airways Ltd 1951
Insolvency law may enable the court to apply a foreign law. Wynn-Parry J said: ‘It appears to me that the simple principle is that this court sits to administer the assets of the South African company which are within its [i.e. the English court’s] . .

Cited by:
Cited – Global Distressed Alpha Fund 1 Ltd Partnership v Pt Bakrie Investindo ComC 17-Feb-2011
Action on an instrument of guarantee.
Held: judgment for the Claimant in respect of the principal sum of US$2m. and such interest payments as were due. . .

Lists of cited by and citing cases may be incomplete.

Insolvency, International

Leading Case

Updated: 02 November 2021; Ref: scu.266540

Regina v Kearns: CACD 22 Mar 2002

The defendant had failed to account for the disappearance of a substantial part of his estate to the official receiver following his bankruptcy. He appealed his conviction for failing to provide an account, saying that the requirement to provide information infringed his right of silence and to a fair trial.
Held: The provisions were not an infringement of the defendant’s rights. The offence was one of strict liability, but the onus of proof remained upon the prosecution. At the time when the demand for information was made, there was no charge against the defendant, and it was not an attempt to obtain evidence to support a criminal charge by ‘coercion or oppression in defiance of the will of the accused’ within Saunders, and evidence received could not be used in criminal proceedings. In any event the right to silence is not absolute, and the provision was proportionate and necessary.
Aikens J said: ‘There is a distinction between the compulsory production of documents or other material which had an existence independent of the will of the suspect or accused person and statements that he has had to make under compulsion. In the former case there was no infringement of the right to silence and the right not to incriminate oneself. In the latter case there could be, depending on the circumstances.’

Lord Justice Kennedy, Mr Justice Aikensand Mr Justice Pitchford
Times 04-Apr-2002, Gazette 10-May-2002, [2002] EWCA Crim 748, [2002] 1 WLR 2815, [2003] 1 CAR 7, [2002] BPIR 1213, [2003] 1 Cr App R 7, [2002] Crim LR 653
Bailii
Insolvency Act 1986 354(3)(a), European Convention on Human Rights 6
England and Wales
Citing:
Cited – Saunders v The United Kingdom ECHR 17-Dec-1996
(Grand Chamber) The subsequent use against a defendant in a prosecution, of evidence which had been obtained under compulsion in company insolvency procedures was a convention breach of Art 6. Although not specifically mentioned in Article 6 of the . .
Cited – Attorney-General’s Reference (No 7 of 2000) CACD 29-Mar-2001
The defendant had been convicted of offences under the Insolvency Act. Evidence of his gambling was found in cheque stubs, bank statements, returned cheques and a betting file containing loose gambling statements by way of computer print outs . .

Cited by:
Cited – C Plc and W v P and Secretary of State for the Home Office and the Attorney General ChD 26-May-2006
cplc_pChD2006
The claimant sought damages from the first defendant for breach of copyright. An ex parte search order had been executed, with the defendant asserting his privilege against self-incrimination. As computer disks were examined, potentially unlawful . .
Cited – C Plc v P and Attorney General Intervening CA 22-May-2007
The respondent had been subject to a civil search, which revealed the existence of obscene images of children on his computer. He appealed against refusal of an order that the evidence should not be passed to the police as evidence. He said that the . .
Approved – Hundal and Dhaliwal, Regina v CACD 3-Feb-2004
The defendants appealed against conviction and sentence for membership of an organisation proscribed under the 2000 Act. The defendants said that at the time they joined the organisation was not proscribed, and had left before it became proscribed. . .
Cited – Regina v S and A CACD 9-Oct-2008
The defendant appealed against his conviction under the 2000 Act for failing to disclose the key used to encrypt a computer file. He was subject to a control order as a suspected terrorist. As the police raided his house, they found the key had been . .
Cited – Greater Manchester Police v Andrews Admn 23-May-2011
The CC appealed by case stated against a refusal of an order under the 2000 Act for the disclosure by the defendant of a cryptography key. The defendant had a history of sexual offences against children and had failed to keep to the terms of a . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Human Rights, Crime

Leading Case

Updated: 02 November 2021; Ref: scu.169830

Arbuthnot Leasing International Ltd v Havelet Leasing Ltd (No 2): ChD 1990

Complaint was made that before the insolvency, the director of the compay had put its assets beyond the creditors. He replied that had acted so on legal advice: ‘Mr Maughan stressed . . that what he did he did on legal advice from solicitors and counsel and without any dishonest intent. . . however, seem to me that it is by itself an answer to a sec. 423 application. Subsection (3) refers to the requirement, if relief under the section is to be granted, that the court must be satisfied that the transaction was entered into for the purpose of putting assets beyond the reach of a person who is making, or may at some time make, a claim against the company. The fact that lawyers may have advised that the transaction is proper or can be carried into effect does not by itself mean that the purpose of the transaction was not the subsec. (3) purpose. It seems to me that, beyond any argument, that was the purpose for which these transactions were made. Mr Maughan formed the view that the litigation against Leasing and the judgments that were liable to be obtained would ruin Leasing’s business and would be detrimental to Leasing’s creditors, not simply Arbuthnot but the other banks as well. Mr Maughan’s motive of saving Leasing’s business was not necessarily a dishonest motive, but is consistent with an intention to put Leasing’s assets out of the reach of Arbuthnot. But for the transfers that Mr Maughan put into effect. Leasing would have had a business and assets to which recourse could have been had in satisfaction or part-satisfaction of the judgment debt that, at the time of the transfers, Arbuthnot was seeking and that shortly thereafter it succeeded in obtaining. Execution against those assets probably would, I accept, have done very great damage to Leasing’s business. It may have done damage also to the underlying interests of the other creditors, such as the other banks. But, nonetheless, Leasing’s assets were deliberately put out of the reach of Arbuthnot. The only asset left against which execution could be levied was Leasing’s right to receive quarterly-in-arrears payments from Finance.
Was the transaction at an undervalue? Subsection (1) provides that a transaction is at an undervalue if the consideration is ‘significantly less than the value, in money or money’s worth, of the consideration provided’ by the transferor. The consideration provided by the transferor in respect of the transfers of the LPs was the benefit of the income stream. The consideration coming back to Leasing consisted of the quarterly-in-arrears payments. In addition, the capital assets of Leasing, apart from the LPs, were transferred to Finance for the purpose of enabling Finance to carry on an ongoing business. It is right, in my judgment, to regard the transactions whereby Leasing’s business was transferred to Finance as one transaction. This transaction was, in my judgment, a transaction at an undervalue within the meaning of that expression in subsec. (1) of sec. 423 .’

Scott J
[1990] BCC 636
Insolvency Act 1986 423
England and Wales

Insolvency

Leading Case

Updated: 02 November 2021; Ref: scu.570506

Armstrong v Onyearu and Another: CA 11 Apr 2017

Exoneration of partner’s equity on insolvency

The court considered the equity of exoneration, where property jointly owned by A and B is charged to secure the debts of B only, A is or may be entitled to a charge over B’s share of the property to the extent that B’s debts are paid out of A’s share.
Held: The trustee’s appeal failed. The equity of exoneration was part of the relief generally made available to sureties against a principal debtor, subject to exceptions supported by evidence that a contrary intention existed or where it could be inferred from the circumstances that the equity should not apply. It had in the past been applied to family units outside marriage.

Vos Ch, David Richards LJJ, Sir Patrick Elias
[2017] EWCA Civ 268, [2017] WLR(D) 271,
Bailii, WLRD
Married Women’s Property Act 1882
England and Wales
Citing:
Cited – Paget v Paget CA 1898
The plaintiff wife was ‘a lady of fortune’, with the bulk of her property settled on her for life for her separate use without power of anticipation. They ‘moved in good society and, large as their income was, they lived far beyond it.’ They were . .
Cited – Gee v Liddell ChD 1913
A co-mortgagor has an ‘interest in [and] a charge upon the estate of the principal debtor’. An equity of exoneration was applied as between brothers.
An equity of exoneration operates in the nature of ‘a charge upon the estate of the principal . .
Cited – Re a debtor (No 24 of 1971), ex parte Marley (J) v Trustee of the property of the debtor ChD 1976
The court will look to the realities of the relationship between the mortgagors and will not be governed by the terms of the mortgage instrument if they do not accord with the actual facts.
Held: the court accepted that an equity of . .
Cited – in Re Berry (a bankrupt) 1978
A married couple opened a joint bank account. H’s business fell into difficulties and overdraft facilities were arranged, secured by a mortgage over their jointly-owned house. The account was used both for the husband’s business and for household . .
Cited – Parsons v McBain 5-Apr-2001
Federal Court of Australia – BANKRUPTCY – constructive trust – transfer of property to beneficiary – whether void as against trustee in bankruptcy
EQUITY – equity of exoneration – how defeated
TRUSTS – ‘common intention constructive . .
Cited – Day v Shaw and Another ChD 17-Jan-2014
Mr and Mrs Shaw had granted a second charge over their jointly-owned matrimonial home to secure the personal guarantee given by their daughter and by Mr Shaw in respect of a bank loan to a company (Avon). Their daughter and Mr Shaw were the . .
Approved – Hall v Hall ChD 1911
An equity of exoneration in favour of a wife arises ‘at the time she charges her estate’. The doctrine of exoneration is based on an inference in each case from all the facts of that particular case. Where one co-habitee joins in granting a charge . .
Cited – In Re Pittortou (a bankrupt) ChD 1985
H and W charged the property to secure the H’s overdrawn bank account. The account was used both for his business and for payment of expenses relating to the matrimonial home. H was adjudicated bankrupt. W sought her equity to be exonerated from H’s . .
Cited – Cadlock v Dunn and Another ChD 13-May-2015
The equity of exoneration could be applied for a wife who had charged her beneficial half share of the matrimonial property to secure a loan to her husband to enable him to re-acquire his half share from his trustee in bankruptcy. The wife obtained . .
Cited – Graham-York v York and Others CA 10-Feb-2015
The claimant challenged a possession order made in respect of the house she occupied, alleging a constructive trust in her favour. The house had been occupied by the unmarried co-habiting couple for nearly 25 years before the death of one of them. . .
Cited – Re Chawda (in bankruptcy) 2014
Mr Chawda and his wife jointly owned a residential property which they charged to secure a loan, part of which refinanced the original purchase loan. The case concerned the balance of about 78,000 pounds. Mr Chawda and his brother carried on . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Equity

Updated: 02 November 2021; Ref: scu.581738

In re Hydrodam (Corby) Limited: ChD 1994

ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator brought claims under section 214 of the 1986 Act for wrongful trading against 14 defendants, including ET, one of its subsidiaries and all its directors. Two of those directors were Mr Thomas and Dr Hardwick, who applied for the proceedings against them to be struck out.
Held: The liquidator had failed to plead or adduce any evidence to support the allegation that the directors of Eagle Trust were at any material time directors of Hydrodam, and the proceedings were struck out.
Directors may be of three kinds: ‘de jure directors, that is to say those who have been validly appointed to the office; de facto directors, that is to say, directors who assume to act as directors without having been appointed validly or at all; and shadow directors who are persons falling within the definition I have read [‘a person in accordance with whose directions or instructions the directors of the company are accustomed to act’]’
Millett J then explained that liability under section 214 extended to de facto as well as to de jure and shadow directors, but the statutory liability was ‘imposed exclusively upon directors of one or other of the three kinds that I have mentioned.’ That meant that the liquidator had to plead and prove against each defendant that he was such a director of HCL.
He explained the difference between a shadow and a de facto director, saying that the latter ‘is one who claims to act and purports to act as a director, although not validly appointed as such.’ A shadow director does not so claim or purport. HCL had two titular directors, namely the two Channel Island companies, a fact that might itself justify the inference that they were accustomed to act in accordance with the directions of others, in which case those others would be shadow directors. But no such case was pleaded.
Millett J said: ‘The liquidator submitted that where a body corporate is a director of a company, whether it be a de jure, de facto or shadow director, its own directors must ipso facto be shadow directors of the company. In my judgment that simply does not follow. Attendance at board meetings and voting, with others, may in certain limited circumstances expose a director to personal liability to the company of which he is a director or its creditors. But it does not, without more, constitute him a director of any company of which his company is a director.’

Millett J
[1994] 2 BCLC 180
Insolvency Act 1986 214
England and Wales
Cited by:
Cited – Holland v Revenue and Customs and Another CA 2-Jul-2009
The appellant supported IT workers. Through his own company, he set up companies in which his company was a director, and which companies in turn employed the IT workers securing substantial savings in higher rate Corporation Tax.
Held: The . .
Cited – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Leading Case

Updated: 02 November 2021; Ref: scu.377315

Eurofood IFSC (Area Of Freedom, Security and Justice): ECJ 2 May 2006

ECJ Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Insolvency proceedings – Decision to open the proceedings – Centre of the debtor’s main interests – Recognition of insolvency proceedings – Public policy.
The centre of a debtor’s main interests must be identified by reference to criteria that are both objective and ascertainable by third parties, in order to ensure legal certainty and foreseeability concerning the determination of the court with jurisdiction to open the main insolvency proceedings. That requirement for objectivity and that possibility of ascertainment by third parties may be considered to be met where the material factors taken into account for the purpose of establishing the place in which the debtor company conducts the administration of its interests on a regular basis have been made public or, at the very least, made sufficiently accessible to enable third parties, that is to say in particular the company’s creditors, to be aware of them.

V. Skouris, P
C-341/04, [2006] EUECJ C-341/04, [2006] 3 WLR 309, [2006] BCC 397, [2006] ILPr 23, [2006] Ch 508, [2006] ECR I-3813, [2006] BPIR 661, [2006] All ER (EC) 1078, [2007] 2 BCLC 151, ECLI:EU:C:2006:281
Bailii
Regulation (EC) No 1346/2000
European
Cited by:
Cited – Olympic Airlines Sa Pension and Life Insurance Scheme v Olympic Airlines Sa CA 6-Jun-2013
The court considered the the jurisdiction under EU law to commence a secondary winding-up in England of a company whose main liquidation is taking place in Greece. That depended upon whether the company, registered in Greece had a sufficient . .

Lists of cited by and citing cases may be incomplete.

Insolvency

Leading Case

Updated: 02 November 2021; Ref: scu.241362

York Buildings Co v Mackenzie: SCS 8 Mar 1793

Purchase by Common Agent at Auction Voidable

The defendant was the ‘common agent’ for the sale of the assets of an insolvent partnership and purchased some of the assets at a judicial auction.
Held: The purchase was voidable, even though it was made at a sale by auction.
Who bears the Expense of a Ranking and Sale? – Election of the Common Agent. – Can the Common Agent be a Purchaser? – Expense of an interim Warrant. The Common agent in a ranking is disqualified from purchasing at the judicial sale carried on under his direction.

Lord Cranworth
3 Paton 378, (1795) 3 ER 432
Commonlii
Scotland
Cited by:
Cited – Newgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
At Court of Session – The Governor And Company of Undertakers For Raising Thames Water In York Buildings v Alexander Mackenzie, Writer, To The Signet PC 15-May-1795
Who bears the Expense of a Ranking and Sale? – Election of the Common Agent. – Can the Common Agent be a Purchaser? – Expense of an interim Warrant. . .

Lists of cited by and citing cases may be incomplete.

Equity, Insolvency

Leading Case

Updated: 01 November 2021; Ref: scu.220725

Heath v Tang, Stevens v Peacock: CA 11 Aug 1993

The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to pursue an appeal; in the second, no trustee had been appointed.
Held: A bankrupt may not personally appeal against the judgment on which the bankruptcy order made. The court set out the duties of court in supervising actions for and against a bankrupt. The jurisdiction conferred by s.303(1) protects a bankrupt from injustice which might otherwise be caused by his inability to bring proceedings outside the bankruptcy jurisdiction and, in an appropriate case, permits a bankrupt to apply for an order that the trustee must make an application or bring a claim or allow the bankrupt to conduct proceedings in the name of the trustee.
Hoffmann LJ noted that the bankrupt’s estate vests in his trustee when appointed under section 306 of the 1986 Act, and, under section 285(3) no creditor has, after the making of a bankruptcy order, any remedy against the property or person of the bankrupt in respect of debts provable in the bankruptcy. The effect is ‘that the bankrupt ceases to have an interest in the either his assets or his liabilities except in so far as there may be a surplus to be returned to him upon his discharge.’

Hoffmann LJ
Independent 14-Oct-1993, Times 11-Aug-1993, [1993] 4 ALL ER 694, [1993] 1 WLR 1421
Insolvency Act 1986 306 285(3)
England and Wales
Cited by:
Cited – Coulter v Chief Constable of Dorset Police CA 13-Jul-2005
An appeal was made against an order refusing to set aside a second statutory demand. The demand was to enforce payment of an order for costs made in proceedings between the parties. The first statutory demand had been upheld, and the judge found . .
Cited – Thames Chambers Solicitors v Miah QBD 16-May-2013
The solicitors appealed against a wasted costs order. They had accepted instructions to act for a bankrupt in pursuing a debt before his discharge and without the debt having been assigned to him by the trustee in bankruptcy.
Held: The order . .
Cited – Williams v Glover and Another ChD 4-Jun-2013
The company’s liquidator had refused to assign to its former directors a claim for a reduction in corporation tax which they were funding.
Held: Such a claim did not constitute property within section 436, and was not a chose capable of . .
Cited – Wordsworth v Dixon CA 1997
The bankrupt had been a defendant in the action brought by the plaintiff. The court considered his standing to appeal.
Held: The right to appeal vested in the trustee. Sir Thomas Bingham MR referred to the case of Heath v Tang and said: ‘that . .
Cited – Singh v HM Revenue and Customs UTTC 15-May-2010
UTTC JUDICIAL REVIEW – the concession of ‘equitable liability’ known as the Noble practice – standing to bring judicial review proceedings – no.
The bankrupt objected to the attempted proof by the Revenue in . .
Cited – BPE Solicitors and Another v Gabriel SC 17-Jun-2015
Application for directions in a pending appeal. The claimant alleged negligence against his former solicitors. After his successful claim was substantially overturned on appeal, he was made bankrupt.
Held: If the trustee adopted and pursued . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Litigation Practice

Leading Case

Updated: 01 November 2021; Ref: scu.81297

Alderson and Others, Assignees v Temple: 1746

Payment Anticipating Bankruptcy was Void

A debtor may not pay a creditor on the eve of his bankruptcy, with the intention of preferring that creditor over others – to do so is void as a fraud on the bankruptcy laws and n creditors generally because ‘it is defeating the equality that is introduced by the statutes of bankruptcy and the criminal (for the bankrupt is considered as a criminal) is taking upon himself to prefer whom he pleases’.

Lord Mansfield
[1746] EngR 5, (1746-1779) 1 Black W 660, (1746) 96 ER 384, (1768) 1 Wm Bl 660
Commonlii
Fraudulent Conveyances Act 1571
England and Wales

Insolvency

Leading Case

Updated: 02 November 2021; Ref: scu.380393

Re County Marine Insurance Co (Rance’s Case): 1870

The directors of an insurance company had declared a bonus by means of a an account of receipts which failed to deal properly with the risks underwritten. They then sought to have the company wound up voluntarily.
Held: The Directors could be ordered to repay the bonuses declared and paid.
Where a bonus was decided upon after a proper investigation and account, the court should be slow to iinterfere, but where there had been no such investigation it was able to intervene.

(1870) LR 6 Ch App 104, (1870) 40 LJ Fh 277, (1870) LT 828, (1870) WR 291 LJ
England and Wales
Cited by:
Cited – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Leading Case

Updated: 01 November 2021; Ref: scu.467095

Poulton v Ministry of Justice: CA 22 Apr 2010

The claimant was trustee in bankruptcy but the court failed to register the bankruptcy petition at the Land Registry as a pending action. The bankrupt was therefore able to sell her land, and the trustee did not recover the proceeds. The trustee sought to recover from the defendant who was responsible for the court service.
Held: The defendant’s appeal succeeded. The obligation under rule 6.13 and the court’s practice of complying with it, and would not imply that the court would serve the request itself. The contrasting provisions of the various Acts suggested an obligation to compensate: ‘Parliament had in mind the possibility that creditors might suffer from a failure on the part of the Land Registry to comply with its duties under section 61, and considered that a private claim against the Registry should not be permitted but that compensation should be provided for out of the insurance fund. By contrast, no such provision was made in the Land Charges Act, so that the Chief Land Registrar might be taken to be open to suit for failure under that Act. Equally there was no immunity for the court under rule 149A, so, again, a breach of that duty might be taken to be actionable.’ However, ‘The fact that occasionally there may be a failure due to oversight does not seem to me to be a sufficient reason to find a private remedy for breach of the obligation created by this rule.’ The freedom of the applicant to make an application indicated against giving a private right.
There was no basis for an assertion of a common law duty: ‘this is not a question of a duty of care; it would be a duty to do an act, which is either done or not done, and the complaint would be of failure to do it at all, not of doing it but without proper care and attention. Another is that, absent the obligation imposed by the rule, the petitioning creditor would have every reason to make the request itself, as it would be entitled to do. The only basis for saying that the creditor places reliance on the court is that the rule requires the court to give the notice.’

Pill, Lloyd, Pitchford LJJ
[2010] EWCA Civ 392, [2010] 3 WLR 1237, [2010] BPIR 775, [2011] 1 Ch 1
Bailii
Land Registration Act 2002, Insolvency Act 1986 284, Insolvency Rules 1986 6.13, Land Charges Act 1972
England and Wales
Citing:
Cited – Cutler v Wandsworth Stadium Ltd HL 1949
The Act required the occupier of a licensed racetrack to take all steps necessary to secure that, so long as a totalisator was being lawfully operated on the track, there was available for bookmakers space on the track where they could conveniently . .
Cited – X (Minors) v Bedfordshire County Council; M (A Minor) and Another v Newham London Borough Council; Etc HL 29-Jun-1995
Liability in Damages on Statute Breach to be Clear
Damages were to be awarded against a Local Authority for breach of statutory duty in a care case only if the statute was clear that damages were capable of being awarded. in the ordinary case a breach of statutory duty does not, by itself, give rise . .
Cited – Ministry of Housing and Local Government v Sharp CA 1970
Mr Sharp was the local land registrar with statutory duty to maintain the local registry, issuing certificates in response to search requests. A clerk who had been seconded by another Council to assist him negligently issued an inaccurate . .
Cited – Smith (a bankrupt) v Braintree District Council HL 1989
The House considered the effects of bankruptcy on the imposition of a committal to imprisonment in default of paying rates.
The purpose of section 285 is to preserve the estate of the bankrupt for the benefit of his unsecured creditors.
Cited – HM Customs and Excise v Barclays Bank Plc HL 21-Jun-2006
The claimant had served an asset freezing order on the bank in respect of one of its customers. The bank paid out on a cheque inadvertently as to the order. The Commissioners claimed against the bank in negligence. The bank denied any duty of care. . .
Cited – Gorringe v Calderdale Metropolitan Borough Council HL 1-Apr-2004
Statutory Duty Not Extended by Common Law
The claimant sought damages after a road accident. The driver came over the crest of a hill and hit a bus. The road was not marked with any warning as to the need to slow down.
Held: The claim failed. The duty could not be extended to include . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Negligence

Updated: 01 November 2021; Ref: scu.408567

Simmonds v Pearce: Admn 1 Dec 2017

Own compulsory statements used against bankrupt

Application to commit the Respondent to prison for breaches of various provisions of the Insolvency Act which are said to constitute deliberate, repeated, and serious contempt of court.
Held: Such applications should be dealth with under CPR r81.15 in Chancery. Statements obtained under compulsion via Section 433 might be set against the bankrupt without infringing his privilege against self incrimination.

Gloster DBE LJ, Andrews DBE J
[2017] EWHC 3126 (Admin), [2017] WLR(D) 803
Bailii, WLRD
Insolvency Act 1986 433(1)
England and Wales

Insolvency

Updated: 01 November 2021; Ref: scu.602596

Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd: CA 16 Jan 1976

The seller sold aluminium to the defendant, but included a clause under which they retained title in the materials sold, even if mixed in with manufactured goods, until they had been paid for the metal. The defendants appealed a finding that the receivers held the proceeds of sale of the manufactured goods on trust for the plaintiffs.
Held: The appeal failed. The intention of the clause was to secure for as long as possible payment of the purchase price of the aluminium. There had to be read into the contract a duty on the defendant to act under the fiduciary relationship of principal and agent, bailor and bailee, as was contemplated in the clause. The plaintiffs could trace the proceeds of the sub-sales, and recover them.

Megaw, Roskill and Goff L.JJ
[1976] 1 WLR 676
lip
England and Wales
Citing:
Cited – In re Hallett’s Estate; Knatchbull v Hallett CA 1880
Where a trustee of a policy used money received from others to make payment of premiums on an insurance policy, they would be entitled to a lien on the policy. Where an asset was acquired exclusively with trust money, the beneficiary could either . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Equity, Agency

Leading Case

Updated: 01 November 2021; Ref: scu.174733

Staubitz-Schreiber (Area of Freedom, Security and Justice): ECJ 17 Jan 2006

ECJ Judicial cooperation in civil matters – Insolvency proceedings – Regulation (EC) No 1346/2000 – Temporal application – Court having jurisdiction

V. Skouris, P
Case-1/04, [2006] EUECJ C-1/04, [2006] BCC 639, [2006] ILPr 30, [2006] ECR I-701
Bailii
Council Regulation (EC) 1346/2000
Cited by:
Cited – Olympic Airlines Sa Pension and Life Assurance Scheme v Olympic Airlines Sa ChD 29-May-2012
Olympic Airlines, incorporated in Greece, but with headquarters in London, went into liquidation. The pensions scheme had been run with a deficit. The trustees no sought the winding up of the company under British law.
Held: To be an . .

Lists of cited by and citing cases may be incomplete.

European, Insolvency

Leading Case

Updated: 01 November 2021; Ref: scu.565706

Radlinger and Radlingerova v Finway AS: ECJ 21 Apr 2016

Remedy for breach of consumer credit agreement

ECJ (Judgment) Reference for a preliminary ruling – Directive 93/13/EEC – Article 7 – National rules governing insolvency proceedings – Debts arising from a consumer credit agreement – Effective judicial remedy – Point 1(e) of the annex – Disproportionate amount of compensation – Directive 2008/48/EC – Article 3(l) – Total amount of credit – Point I of Annex I – Amount of drawdown – Calculation of the annual percentage rate – Article 10(2) – Obligation to provide information – Ex officio examination – Penalty

M Ilesic P
C-377/14, [2016] EUECJ C-377/14, [2016] WLR(D) 203, ECLI:EU:C:2016:283, [2016] Bus LR 886
Bailii, WLRD
Directive 93/13/EEC 7, Directive 2008/48/EC
England and Wales

European, Insolvency

Leading Case

Updated: 31 October 2021; Ref: scu.562824

Revenue and Customs v SED Essex Ltd: ChD 14 Jun 2013

Liquidator confirmed despite VAT challege

The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The decision to appoint the provisional liquidator was maintained.
The court in the Rochdale Drinks case had now modified the test for the appointment of a provisional liquidator so that: ‘ the law now is that a judge dealing with such an application should consider it in 2 stages. The first and threshold stage is to consider whether the petitioner and applicant has demonstrated that it is likely to obtain a winding-up order on the hearing of the petition. Any views the judge may express about that will of course be provisional, because the petition itself is not being tried at the time of the application. If such likelihood is not demonstrated, it would not, at least ordinarily, be right to appoint a provisional liquidator. If on the other hand it is demonstrated, and the threshold thus crossed, then the second stage is to consider whether in the circumstances of the particular case, it is – as a matter of judicial discretion – right that a provisional liquidator should be appointed (or, where as here one has already been appointed, should be maintained in office) pending the hearing of the petition.’
The Revenue had satisfied the court that ‘both:
(a) there was fraudulent evasion of VAT connected (at whatever stage) to the Company’s purchases during the relevant 12 months, and
(b) the Company, in the person of Holly Sawyer, either knew that its purchases during that period were connected with the fraudulent evasion of VAT, or should have known that the only reasonable explanation for the circumstances in which they took place was that they were so connected or ignored obvious inferences to that effect from the facts and circumstances in which the Company had been trading’ and ‘the evidence in this case does raise real questions as to the integrity of the Company’s management, and the quality of the Company’s business documentation, and accounting and record keeping functions.’ Both stages of the test were satisfied.

John Randall QC
[2013] EWHC 1583 (Ch)
Bailii
Insolvency Act 1986 122(1)(e) 123
England and Wales
Citing:
Cited – Revenue and Customs v Rochdale Drinks Distributors Ltd CA 13-Oct-2011
The revenue appealed against refusal of its petition for the winding up of the company for non-payment of a VAT assessment. The company said that the assessment was disputed. The revenue said that the company had been run for the purpose of . .
Cited – Re Union Accident Insurance Co Ltd ChD 1972
A provisional liquidator cannot be appointed on a baseless petition. There are two conditions to be met. The first was that the petition must disclose a prima facie case, the second was that there were circumstances that require that a provisional . .
Cited – The Niedersachsen ChD 1983
In order to obtain, or to enlarge a freezing order, the applicant must show that in considering the evidence as a whole he has, at a minimum, a ‘good arguable case’, and also the existence of a real risk of dissipation or secretion of assets. . .
Cited – Mobilx Ltd and Others v HM Revenue and Customs; Blue Sphere Global Ltd v Same and similar CA 12-May-2010
Each company sought repayment of input VAT. HMRC refused, saying that the transactions were the end-product of a fraud on it, and that even if the taxpayer did not know that a fraud was involved, it should have been aware that one was and acted . .
Cited – Axel Kittel v Belgian State; Belgian State v Recolta Recycling SPRL ECJ 6-Jul-2006
ECJ Sixth VAT Directive – Deduction of input tax – ‘Carousel’ fraud – Contract of sale incurably void under domestic law.
The right of a taxpayer to deduct Input Tax may be refused if: ‘it is ascertained, . .
Cited – Commissioners of Customs and Excise v Anglo German Breweries Limited ChD 29-Nov-2002
The respondents appealed against imposition of assessments for the diversion of alcohol products from bonded warehouses without payment of duties. Pretence had been made of deliveries abroad, but the goods were later diverted. The company was . .
Cited – The Commissioners for Customs and Excise, The Arena Corporation Limited v The Arena Corporation Limited / Schroeder ChD 12-Dec-2003
. .
Cited – Customs and Excise v Anglo Overseas Ltd ChD 5-Oct-2004
. .
Cited – In re The Arena Corporation Limited; Commissioners for Customs and Excise v The Arena Corporation Limited; the Arena Corporation Limited v Schroeder CA 25-Mar-2004
Sir Andrew Morritt V-C said that in the context of winding up proceedings the test for whether there is a genuine triable issue in a disputed claim, is whether the debt is bona fide disputed on substantial grounds, which, for practical purposes, is . .
Cited – HM Customs and Excise v Jack Baars Wholesale, Baars, and Baars CmpC 16-Jan-2004
. .
Cited – Re Autotech Design Ltd, HMRC v Autotech Design Ltd ChD 2006
Michael Briggs QC summarised the approach to be adopted by the court at the hearing of for the appointment of an interim liquidator pending the hearing of an insolvency petition brought by the Revenue: ‘Although the formulations of the approach to . .
Cited – Red 12 Trading Ltd v Revenue and Customs ChD 20-Oct-2009
Appeal against refusal to allow reclaim of input tax in case of alleged ‘Missing Trader Intracommunity Fraud’.
Held: Christopher Clarke J said: ‘Examining individual transactions on their merits does not, however, require them to be regarded . .
Cited – Payless Cash and Carry Ltd v Patel and Others ChD 29-Jul-2011
The claimant company, in liquidation, claimed large sums from the first defendant as a director who wrongfully and fraudulently caused it to incur a liability to HMRC for wrongfully claimed input tax on various liquor purchases.
Held: Mann J . .

Lists of cited by and citing cases may be incomplete.

Insolvency, VAT, Company

Leading Case

Updated: 31 October 2021; Ref: scu.510872

Bradley-Hole v Cusen: CA 1953

The creditor was a tenant of rent-controlled premises who had been charged too much rent by his landlord. The bankrupt landlord’s trustee argued that the claim in respect of overpaid rent had been converted into a right to prove the debt in the bankruptcy, and that therefore any other method of recovery was barred.
Held: The trustee’s argument was rejected. The property passed to the trustee ‘in the same plight and condition in which it was in the bankrupt’s hands’ and that included the right of the tenant to live there rent free until the overpaid rent had been recouped. The tenant’s rights included the right to be considered as having paid rent in advance up to the amount of the excess. A tenant’s right under the statute to deduct earlier overpayments of rent from a future rent payable by him was not an ordinary case of set-off and could continue to be exercised after the bankruptcy of the landlord.

Jenkins LJ
[1953] 1 QB 300, [1953] 1 All ER 87
Increase of Rent and Mortgage Interest (Restrictions) Act 1920 14(1)
England and Wales
Cited by:
Cited – Mulvey v Secretary of State for Social Security HL 20-Mar-1997
The appellant had had repayable awards from the social fund and also income support benefit. Deductions were made from the benefit to repay the awards. Her estate was sequestrated. She argued that the awards should no longer be deducted.
Held: . .
Applied – Regina v Secretary of State for Social Security, Ex parte Taylor and Chapman ChD 5-Feb-1996
The applicants were in turn the recipient of a Social Fund loan and a claimant who had been overpaid benefit. Both were later declared bankrupt. The Secretary of State then began to recover the loan and overpayment by deduction from their current . .
Cited – Secretary of State for Work and Pensions v Payne and Another SC 14-Dec-2011
The appellant sought to recover overpayments of benefits and Social Fund Loans, after the respondent had had a Debt relief order.
Held: The Secretary of State’s appeal failed. The ‘net entitlement principle’ argued for did not exist. The . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Landlord and Tenant

Leading Case

Updated: 31 October 2021; Ref: scu.184748

Christopher Moran Holdings Limited v Bairstow and Ruddock: ChD 1996

(Orse: Park Air Services) The tenant company went into a members’ solvent liquidation, and disclaimed the lease. At the time, the rental value had fallen very much below the contractual rent. The landlord sought to prove the balance of the rent with no allowance for being accelerated. The liquidator said the claim should be discounted for having been accelerated.
Held: The claim was correct as submitted.
Ferris J
[1996] 1 WLR 649
Insolvency Act 1986 178(2)
England and Wales
Cited by:
Appeal from – Park Air Services Plc; Christopher Moran Holdings Limited v Bairstow and Ruddock CA 1-May-1997
If a lease is determined or treated as determined in a winding up or in a bankruptcy, the landlord is entitled to prove in principle for all the rent and other payments which he would have been entitled to recover from the tenant for the residue of . .

Lists of cited by and citing cases may be incomplete.
Updated: 10 October 2021; Ref: scu.197012

Park Air Services Plc; Christopher Moran Holdings Limited v Bairstow and Ruddock: CA 1 May 1997

If a lease is determined or treated as determined in a winding up or in a bankruptcy, the landlord is entitled to prove in principle for all the rent and other payments which he would have been entitled to recover from the tenant for the residue of the term, had the lease not been determined.
Lord Justice Nourse Lord Justice Potter And Lord Justice Mummery
[1997] EWCA Civ 1590
Insolvency Act 1986
England and Wales
Citing:
Appeal from – Christopher Moran Holdings Limited v Bairstow and Ruddock ChD 1996
(Orse: Park Air Services) The tenant company went into a members’ solvent liquidation, and disclaimed the lease. At the time, the rental value had fallen very much below the contractual rent. The landlord sought to prove the balance of the rent with . .
Cited – In re New Oriental Bank Corporation (No.2) 1895
Where a tenancy continues after the insolvency of the tenant, the landlord is entitled (i) to prove for all the arrears of rent; (ii) to enter a claim for all future rent; and (iii) as rent accrues due, to submit proofs in the liquidation from time . .
Cited – Re A E Realisations Ltd 1988
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. . .
Cited – 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 . .
Cited – In re London and Colonial Co.; Horsey’s claim 1868
. .
Cited – Gooch v London Banking Association ChD 1886
On the application of a landlord, the court had jurisdiction to restrain the liquidators of a solvent company in voluntary liquidation from distributing assets of the company amongst its shareholders, without setting aside sufficient assets to . .
Cited – Re Panther Lead Company 1896
There was no surrender of a lease to the landlord and the tenant’s liquidator did not have the power to disclaim the lease. In the voluntary winding up of an insolvent company the landlord sought to prove for the liabilities of the company under the . .
Cited – Ex parte Llynvi Coal and Iron Co; In re Hide 1871
The trustee in bankruptcy disclaimed an agreement for a lease under Section 23. The landlord claimed to prove as creditor under the section.
Held: Where one party has repudiated a contract and the other party has accepted that repudiation as . .

Cited by:
Appeal from – In Re Park Air Services Plc; Christopher Moran Holdings Ltd v Bairstow and Another HL 4-Feb-1999
The tenant company went into liquidation, the receiver disclaimed the lease, and the landlord claimed compensation under the Act. The question concerned how the compensation was to be calculated.
Held: Where a solvent tenant under an onerous . .

Lists of cited by and citing cases may be incomplete.
Updated: 08 October 2021; Ref: scu.141986

Re Mineral Resources Limited; Environment Agency v Stout (Chd; Apr 1998): ChD 24 Jun 1998

A waste management licence was property, but public policy required that such licences should not be disclaimable by liquidators. There is a need to preserve responsibilities of those taking such licences.
Gazette 24-Jun-1998
Environmental Protection Act 1990, Insolvency Act 1986 178
England and Wales

Updated: 01 October 2021; Ref: scu.85837

Re: New Bullas Trading Ltd: ChD 5 Apr 1993

A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge.
Knox J
Ind Summary 05-Apr-1993, [1993] BCC 251
Insolvency Act 1986 40
England and Wales
Citing:
Appealed to – In Re New Bullas Trading Ltd CA 12-Jan-1994
A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be . .
Applied – In re Brightlife Ltd ChD 1987
Parties contractual freedom to be respected
A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not . .

Cited by:
Appeal from – In Re New Bullas Trading Ltd CA 12-Jan-1994
A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be . .
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.
Updated: 01 October 2021; Ref: scu.85909

Re Dennis: ChD 15 Jul 1992

Property was held in joint names. The husband failed to comply with a statutory demand, and so committed an act of bankruptcy. The wife later died, and the husband was then made bankrupt a month later.
Held: An act of bankruptcy did not operate as an involuntary act to sever the joint tenancy and the bankrupt inherited the jointly held property. On his bankruptcy the entire property was then vested in the trustee and was available to the creditors. ‘the effect of section 38(a) is not to vest title in the trustee retrospectively in the sense that under the Act he is deemed to have had title at the commencement of the bankruptcy: the effect of Section 38(a) is to vest in the trustee, when adjudication occurs, title to property which is identified by reference to the property which belonged to the bankrupt at the commencement of the bankruptcy. The consequence of this may be, and in some cases will be, to divest a third party of title to property which since the commencement of the bankruptcy he has acquired from the bankrupt. That divesting occurs when the adjudication order is made, not before.’
Browne-Wilkinson J
Gazette 15-Jul-1992, [1993] Ch 72
Bankruptcy Act 1914 18 37 38A
England and Wales
Citing:
Appealed to – Re Dennis (A Bankrupt) CA 22-May-1995
A joint tenancy was severed (under the former law) on the event of an act of bankruptcy, and not only by the later actual adjudication of bankruptcy. The vesting of the debtor’s property in the trustee which occurred on adjudication was automatic; . .

Cited by:
Appeal from – Re Dennis (A Bankrupt) CA 22-May-1995
A joint tenancy was severed (under the former law) on the event of an act of bankruptcy, and not only by the later actual adjudication of bankruptcy. The vesting of the debtor’s property in the trustee which occurred on adjudication was automatic; . .
Not followed – In Re Palmer, Deceased (A Debtor) ChD 25-Mar-1994
The court considered the effect of the doctrine of relation back on a property of which the bankrupt was formerly a joint tenant where the bankrupt had died after the act of bankruptcy but before adjudication.
Held: A deceased’s share in . .

Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.85751

BPE Solicitors and Another v Gabriel: SC 17 Jun 2015

Application for directions in a pending appeal. The claimant alleged negligence against his former solicitors. After his successful claim was substantially overturned on appeal, he was made bankrupt.
Held: If the trustee adopted and pursued the action, but lost, he would not become personally liable for the costs in the lower courts.
Lord Mance, Lord Sumption, Lord Carnwath, Lord Toulson, Lord Hodge
[2015] UKSC 39, [2015] 4 Costs LO 467, [2015] WLR(D) 259, [2015] AC 1663, [2015] 4 All ER 672, [2015] BPIR 779, [2015] 3 WLR 1, UKSC 2014/0026
Bailii, Bailii Summary, WLRD, SC, SC Summary, SC Video
Constitutional Reform Act 2005 40(5), upreme Court Rules 2009 46
England and Wales
Citing:
Appeal from – Gabriel v Little and Others CA 22-Nov-2013
The claimant sought repayment of sums loaned to the defendant by them under a facility letter supported by a legal charge. The charge had been enforced but the sums realised had been insufficient. . .
Cited – Borneman v Wilson CA 1884
The Wilsons, father and son, had acted as commercial agents of one Borneman. He began an action against them in the Chancery Division for an account of their dealings with his goods and obtained interlocutory relief on motion including an injunction . .
Cited – School Board for London v Wall Brothers CA 1891
. .
Cited – Heath v Tang, Stevens v Peacock CA 11-Aug-1993
The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to . .
Cited – Trustee of Property of Vickery (a Bankrupt) v Modern Security Systems Limited CA 15-Oct-1997
A trustee in bankruptcy will be treated as the party if he has in fact adopted the proceedings by conducting the litigation, even if there has been no formal substitution . .
Cited – In re Bluck, Ex parte Bluck 1887
The discretionary character of a costs order meant that it was not even a contingent liability until the order had actually been made . .
Cited – In re A Debtor (No 68 of 1911) 1911
. .
Cited – In re Pitchford 11-Jan-1924
. .
Cited – Aiden Shipping Co Ltd v Interbulk Ltd (The ‘Vimeira’) HL 1986
Wide Application of Costs Against Third Party
A claim had been made against charterers by the ship owners, and in turn by the charterers against their sub-charterers. Notice of motion were issued after arbitration awards were not accepted. When heard, costs awards were made, which were now . .
Cited – Glenister v Rowe CA 21-Apr-1999
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which . .
Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .

Cited by:
Cited – Plevin v Paragon Personal Finance Ltd SC 29-Mar-2017
The court had ordered the respondent to pay the claimant’s costs. These were high because the solicitors had acted under a conditional fee agreement, and disproportionate to the funds at issue. The respondents challenged assignments of the original . .

Lists of cited by and citing cases may be incomplete.
Updated: 27 September 2021; Ref: scu.549064

Harvey v Dunbar Assets Plc: CA 13 Feb 2017

This appeal raises an issue of principle in the law of bankruptcy on which there is no previous authority directly in point. If:
(a) a debtor’s application to set aside a statutory demand (‘SD1’) is dismissed on the merits, by application of the familiar test that the debtor has no reasonable prospect of establishing a defence or cross claim which would either extinguish the debt or reduce it below the minimum bankruptcy level of andpound;750; but
(b) SD1 is subsequently set aside on appeal, on an unrelated ground;
(c) the unrelated ground is then disposed of in the creditor’s favour, in other proceedings to which the debtor is not a party; and
(d) the creditor then serves a second statutory demand (‘SD2’) on the debtor, relying on precisely the same debt as he did when he served SD1:
Is it open to the debtor to apply to set aside SD2 on the same grounds which he unsuccessfully raised in opposition to SD1, and which he never sought to uphold on the appeal from SD1?
Held: The debtor’s appeal failed. He could show no proper prospect of defending the claim under the guarantee he had signed.
The court set out the principles of promissory estoppel: ‘Where, by his words or conduct one party to a transaction, (A) freely makes to the other (B) a clear and unequivocal promise or assurance that he or she will not enforce his or her strict legal rights, and that promise or assurance is intended to affect the legal relations between them (whether contractual or otherwise) or was reasonably understood by B to have that effect, and, before it is withdrawn, B acts upon it, altering his or her position so that it would be inequitable to permit the first party to withdraw the promise, the party making the promise or assurance will not be permitted to act inconsistently with it. B must also show that the promise was intended to be binding in the sense that (judged on an objective basis) it was intended to affect the legal relationships between the parties and A either knew or could have reasonably foreseen that B would act on it. Yet B’s conduct need not derive its origins solely from A’s encouragement or representation. The principal issue is whether A’s representation had a sufficiently material influence on B’s conduct to make it inequitable for A to depart from it.’
Gross, Henderson LJJ, Sir Stephen Tomlinson
[2017] EWCA Civ 60
Bailii
England and Wales
Citing:
Cited – Barnes v Whitehead ChD 2004
Where a party seeks to run an argument which might have been made earlier, it will inquire why those arguments were not run at the time when they could and should have been run. However, a failure to apply to set aside the statutory demand does not . .
Appeal from – Harvey v Dunbar Assets Plc ChD 26-Nov-2015
Renewed application by Mr Harvey for permission to appeal the dismissal of his application to set aside a statutory demand served on him by the respondent, Dunbar Assets plc . .

Cited by:
Cited – Jones and Another v Lydon and Others ChD 23-Aug-2021
No Estoppels Established to Override Majority
The parties were former members of a band, the Sex Pistols. They disputed the continued duty to accept the decision of the majority of its members as set out in a Band Membership Agreement. Mr Lydon asserted that over the years the obligation had . .

Lists of cited by and citing cases may be incomplete.
Updated: 28 August 2021; Ref: scu.574296

Hunt and Another v Conwy County Borough Council: ChD 8 May 2013

The claimant bankrupt and his mother sought a vesting order under the 1986 Act in respect of the pier at Colwyn Bay and its associated dwelling which had been disclaimed by the trustee as onerous property.
Held: The court had power to hear an application under the section for the vesting a dwelling in its occupants even though that he might occupy only a part of the disclaimed property as his dwelling house and on such an application, it could make an order relating to only a part of the disclaimed property.
Sir William Blackburne
[2013] EWHC 1154 (Ch), [2014] 1 WLR 254, [2013] WLR(D) 205, [2013] BPIR 790
Bailii, WLRD
Insolvency Act 1986 320(2)(a)
England and Wales

Updated: 29 June 2021; Ref: scu.503477

Re Yagerphone Ltd: 1935

A sum recovered from a creditor who has been wrongly preferred enures for the benefit of the general body of creditors, not for the benefit of the company or the holder of the floating charge. It does not become part of the company’s assets but is received by the liquidator impressed with a trust in favour of those creditors amongst whom he has to distribute the assets of the company.
[1935] Ch 392
England and Wales

Updated: 21 June 2021; Ref: scu.196015

Re Arrows Ltd (In Liquidation); Chd 1 Jul 1992

References: Times 01-May-1992, Gazette 01-Jul-1992
Ratio: Liquidators seeking information from directors were allowed to undertake not to disclose any information gathered to the Serious Fraud Office. Such an undertaking having been given a former company director was not able to refuse to answer questions put to him.
Statutes: Insolvency Act 1986 236(2)
This case is cited by:

  • Appeal from – Re Arrows Ltd (No 4) CA (Independent 08-Apr-93, Gazette 09-Jun-93)
    A Civil Court cannot stop the Serious Fraud Office using evidence which had been gathered under compulsion during Insolvency interviews under s236. Any element of confidentiality was overriden. . .

(This list may be incomplete)

Last Update: 03-Sep-16
Ref: 85714

Re Ashwell ex parte Salaman; Chd 1912

References: [1912] 1 KB 390
Coram: Phillimore J
Ratio: After the presentation of a bankruptcy petition against him, the debtor obtained an adjournment of the petition by paying the petitioning creditors money which he falsely represented to be that of a third party. The debtor was afterwards adjudicated bankrupt, and the trustee claimed repayment of the money from the petitioning creditors, relying on the doctrine of relation back. The petitioning creditors submitted that the debtor was estopped by his misrepresentation from saying that the money was his, and that the trustee in bankruptcy could be in no better position.
Held: Repayment was ordered. The money had become the trustee’s money by reason of the doctrine of relation back before the representation was made. He had a higher title and could not be estopped from claiming repayment of his own money by a later misrepresentation about it. The doctrine of relation back was taken literally.
Phillimore J said: ‘No doubt, when a bankrupt is estopped by some representation of his made in the course of carrying on his business, his trustee who takes his estate would be, just as much as an executor, bound, quoad the estate, by the representation, and be estopped. But here the trustee takes by a higher title. This £125 was the trustee’s money by reason of the doctrine of relation back, and any statement made at the time of payment on behalf of Ashwell [the bankrupt] that it was not Ashwell’s money cannot estop the trustee from claiming the money. For this purpose, Ashwell and the trustee are different persons, and it is just the same as if Ashwell had represented that it was the money of somebody else . . This was not Ashwell’s money to make any representation about at all. It was in the contemplation of the law the trustee’s money, and, therefore, there is no estoppel.’
This case is cited by:

  • Cited – Re Dennis (A Bankrupt) CA (Ind Summary 22-May-95, [1995] 3 All ER 171, [1995] 3 WLR 367)
    A joint tenancy was severed (under the former law) on the event of an act of bankruptcy, and not only by the later actual adjudication of bankruptcy. The vesting of the debtor’s property in the trustee which occurred on adjudication was automatic; . .

(This list may be incomplete)

Last Update: 28-Aug-16
Ref: 186762

International Air Transport Association v Ansett Australia Holdings Ltd; 6 Feb 2008

References: [2008] HCA 3, (2008) 234 CLR 151, (2008) 242 ALR 47, (2008) 82 ALJR 419, (2008) 65 ACSR 1, (2008) 26 ACLC 38
Links: Austlii
Coram: Gleeson CJ
Ratio: (High Court of Australia) The rules of the clearing house scheme had been modified following the British Eagle decision so as to exclude any liability or right of action for payment between member airlines.
Held: (by a majority, Kirby J dissenting) The rule changes were effective to make the IATA the sole creditor of Ansett, and that the revised system did not have the effect of administering debts due to an insolvent company otherwise than in accordance with the mandatory pari passu rule. The court referred to Ex p Mackay and suggested that Lord Cross’ speech in British Eagle was based in part on the anti-deprivation principle; and that there was no need for recourse to the rule that a contract which is contrary to public policy is void, because the statute was an overriding one which applied according to its terms.
This case cites:

  • Cited – British Eagle International Airlines Ltd v Compagnie National Air France HL ([1975] 1 WLR 758, [1975] 2 All ER 390)
    British Eagle, which had gone into liquidation. The parties disputed a contract attempting to reset the ranking of debts. The House was asked whether there was a debt due to the insolvent company at the commencement of its winding-up, to which the . .

(This list may be incomplete)
This case is cited by:

(This list may be incomplete)

Last Update: 10-Aug-16
Ref: 442611

Kitchen v Bartsch; 22 Nov 1805

References: [1805] EngR 345, (1805) 7 East 53, (1805) 103 ER 21
Links: Commonlii
Ratio:It is a good plea to an action on a promissory note and for money lent, that the plaintiff is an uncertificated bankrupt, and that his assignees required the defendant to pay to them the money claimed by the plaintiff: and it is no good replication that the causes of action accrued after the plaintiff became bankrupt, and that the defendant treated with the plaintiff as a person capable of receiving credit in those behalves, and that the commissioners had made no new assignment of the said notes and money : for the general assignment of the commissioners passes to the assignees of the bankrupt all his after-acquired as well as present personal property and debts.

Last Update: 23-Jul-16
Ref: 343418

Cotton v James; 30 Jun 1830

References: (1830) 1 B & Ad 128, [1830] EngR 713, (1830) 1 B & Ad 128, (1830) 109 ER 735
Links: Commonlii
Ratio:The burden of proof can shift during the course of a trial. Silence in circumstances in which a party would be expected to answer might convert evidence into proof.
This case cites:

  • See Also – Cotton v James, Gent One & C (Commonlii, [1829] EngR 293, (1829) M & M 273, (1829) 173 ER 1157)
    In trespass for entering plaintiff’s dwelling-house and taking his goods on a plea justifying the trespass by proceedings under a commission of bankruptcy, and replication taking issue on the act of bankruptcy, the defendant is entitled to begn. . .
  • See Also – Cotton v James, Gent One, & C (Commonlii, [1829] EngR 296, (1829) 3 Car & P 505, (1829) 172 ER 522)
    . .

(This list may be incomplete)
This case is cited by:

  • Cited – Gibbs and others -v- Rea PC (Times 04-Feb-98, Bailii, [1998] UKPC 3, [1998] AC 786)
    (Cayman Islands) The respondent worked for a bank. He disclosed a business interest, but that interest grew in importance to the point where he resigned in circumstances amounting to constructive dismissal. His home and business officers were raided . .
  • See Also – James, Gent, One &C, v Cotton (, Commonlii, [1831] EngR 127, (1831) 7 Bing 266, (1831) 131 ER 103)
    . .

(This list may be incomplete)

Last Update: 13-Jul-16
Ref: 184695

Cotton v James, Gent One and C; 17 Jan 1829

References: [1829] EngR 293, (1829) M & M 273, (1829) 173 ER 1157
Links: Commonlii
Ratio:In trespass for entering plaintiff’s dwelling-house and taking his goods on a plea justifying the trespass by proceedings under a commission of bankruptcy, and replication taking issue on the act of bankruptcy, the defendant is entitled to begn. Letters, bearing postmarks before the act of bankruptcy, and found in the alleged bankrupt’s possession after it, containing statements of maters material to the act of bankruptcy, are admissible without calling the writer, as evidence against the alleged bankrupt, to shew that he received iintimation of these facts, though not to prove their truth A fraudulent delivery of goods is not an act of bankruptcy, unless it be in the nature of a gift or transfer, so that when goods are removed with intent to delay a creditor, but the party to whose custody they are given has no claim given to him over them, this is not an act of bankruptcy At all events such delivery of goods by his agent, carrying on his business, without his direction, is no act of bankruptcy.
This case is cited by:

  • See Also – Cotton v James, Gent One, & C (Commonlii, [1829] EngR 296, (1829) 3 Car & P 505, (1829) 172 ER 522)
    . .
  • See Also – Cotton v James ((1830) 1 B & Ad 128, Commonlii, [1830] EngR 713, (1830) 1 B & Ad 128, (1830) 109 ER 735)
    The burden of proof can shift during the course of a trial. Silence in circumstances in which a party would be expected to answer might convert evidence into proof. . .
  • See Also – James, Gent, One &C, v Cotton (, Commonlii, [1831] EngR 127, (1831) 7 Bing 266, (1831) 131 ER 103)
    . .

(This list may be incomplete)

Last Update: 13-Jul-16
Ref: 322161

Cotton v James, Gent One, and C; 18 Jan 1829

References: [1829] EngR 296, (1829) 3 Car & P 505, (1829) 172 ER 522
Links: Commonlii
Ratio:
This case cites:

  • See Also – Cotton v James, Gent One & C (Commonlii, [1829] EngR 293, (1829) M & M 273, (1829) 173 ER 1157)
    In trespass for entering plaintiff’s dwelling-house and taking his goods on a plea justifying the trespass by proceedings under a commission of bankruptcy, and replication taking issue on the act of bankruptcy, the defendant is entitled to begn. . .

(This list may be incomplete)
This case is cited by:

  • See Also – Cotton v James ((1830) 1 B & Ad 128, Commonlii, [1830] EngR 713, (1830) 1 B & Ad 128, (1830) 109 ER 735)
    The burden of proof can shift during the course of a trial. Silence in circumstances in which a party would be expected to answer might convert evidence into proof. . .
  • See Also – James, Gent, One &C, v Cotton (, Commonlii, [1831] EngR 127, (1831) 7 Bing 266, (1831) 131 ER 103)
    . .

(This list may be incomplete)

Last Update: 13-Jul-16
Ref: 322164

In re Pitchford; 11 Jan 1924

References: [1924] 2 Ch 260
Ratio:
This case is cited by:

  • Cited – In re Nortel Companies and Others SC (Bailii, [2013] UKSC 52, [2013] 4 All ER 887, [2013] Bus LR 1056, [2013] 2 BCLC 135, [2013] Pens LR 299, [2013] BCC 624, [2013] BPIR 866, [2013] WLR(D) 300, [2014] 1 AC 209, WLRD, Bailii Summary, UKSC 2011/0259, SC Summary, SC, [2013] 3 WLR 504)
    The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
    Held: Liabilities which arose from financial support directions or contribution notices . .
  • Cited – General Dynamics Information Technology Ltd -v- Carranza EAT (Bailii, [2014] UKEAT 0107_14_1010)
    EAT DISABILITY DISCRIMINATION – Reasonable adjustments
    UNFAIR DISMISSAL – Reasonableness of dismissal
    The Employment Tribunal, by a majority, found that the Respondent was in breach of a duty to make . .
  • Cited – BPE Solicitors and Another -v- Gabriel SC (Bailii, [2015] UKSC 39, [2015] 4 Costs LO 467, [2015] WLR(D) 259, [2015] AC 1663, [2015] 4 All ER 672, [2015] BPIR 779, [2015] 3 WLR 1, Bailii Summary, WLRD, UKSC 2014/0026, SC, SC Summary, SC Video)
    Application for directions in a pending appeal. The claimant alleged negligence against his former solicitors. After his successful claim was substantially overturned on appeal, he was made bankrupt.
    Held: If the trustee adopted and pursued . .

(This list may be incomplete)

Last Update: 06-Jul-16
Ref: 537714

Fletcher et al v Dominam Sedley et al; 6 Mar 1704

References: [1704] EngR 42, (1704) 2 Vern 490, (1704) 23 ER 913
Links: Commonlii
Ratio:A makes a bill of sale of his goods to a trustee, for one who lived with him as his wile, and so reputed. Bill of sale set aside as fraudulent against creditors. A purchases a lease of a house in the name of B., and takes a declaration of trust to permit A. to enjoy for life, and then in trust for one who lived with him as his wife, and was so reputed. This lease is not assets of A. nor liable to his creditors after his death ; for when a man purchases, he may settle the estate as he pleases.

Last Update: 20-Jun-16
Ref: 392137

Singh v HM Revenue and Customs; UTTC 15 May 2010

References: [2010] UKUT 174 (TCC), [2010] BPIR 933, [2010] BTC 1548, [2010] STI 1723, [2010] STC 2020
Links: Bailii
Coram: Warren J P
Ratio: UTTC JUDICIAL REVIEW – the concession of ‘equitable liability’ known as the Noble practice – standing to bring judicial review proceedings – no.
The bankrupt objected to the attempted proof by the Revenue in his bankrupty. He now renewed his application to bring judicial review.
Held: He had no standing to bring judiial review proceedings. Warren J approved the aproach suggested in Hurren, that agreement should be sought between the bankrupt and the inspector, with the trustee ensuring that any agreement was proper.
This case cites:

  • Cited – Smith (a bankrupt) -v- Braintree District Council HL ([1989] 3 All ER 897, [1989] 3 WLR 1317, [1990] 2 AC 215)
    The House considered the effects of bankruptcy on the imposition of a committal to imprisonment in default of paying rates.
    The purpose of section 285 is to preserve the estate of the bankrupt for the benefit of his unsecured creditors.
  • Cited – Heath -v- Tang, Stevens -v- Peacock CA (Independent 14-Oct-93, Times 11-Aug-93, [1993] 4 ALL ER 694, [1993] 1 WLR 1421)
    The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to . .
  • Cited – Wordsworth -v- Dixon CA ([1997] BPIR 337)
    The bankrupt had been a defendant in the action brought by the plaintiff. The court considered his standing to appeal.
    Held: The right to appeal vested in the trustee. Sir Thomas Bingham MR referred to the case of Heath v Tang and said: ‘that . .
  • Cited – Re a Debtor, ex parte the Debtor -v- Dodwell ChD ([1949] Ch 236)
    Harman J held that it was for the bankrupt’s trustee alone to settle with the Crown in a case where the bankrupt had been discharged and there was no tax assessment. . .
  • Cited – Re Hurren (a bankrupt) ChD ([1983] 1 WLR 183)
    There might have been a surplus after paying the debts due to the Inland Revenue (the major creditor).
    Held: The way forward was for the trustee to agree the tax liability with the Revenue but only with the consent of the bankrupt. Walton J . .
  • Cited – Sivasubramaniam -v- Wandsworth County Court, Management of Guildford College of Further & Higher Education and Another CA (Gazette 23-Jan-03, Bailii, [2002] EWCA Civ 1738, [2003] 1 WLR 475, [2003] CP Rep 27, [2003] 2 All ER 160)
    Having had various claims made in county courts rejected, the applicant was then refused leave to appeal. He sought judicial review of the refusal to give leave to appeal, and now appealed the refusal of leave to apply for a judicial review.

(This list may be incomplete)

Last Update: 07-Jun-16
Ref: 428155

Russell v Ross’s Creditors; Pierse v Ross; 31 Jan 1792

References: 31 January 1792 FC, 1792 M 10300, 3 Ross’s LC 177
Coram: Lord Braxfield, Lord Monboddo’s
This case cites:

(This list may be incomplete)
This case is cited by:

  • Cited – Burnett’s Trustee -v- Grainger and Another HL (2004 SCLR 433, 2004 SC (HL) 19, 2004 SLT 513, 2004 GWD 9-211, House of Lords, [2004] UKHL 8, Bailii, Times 08-Mar-04, [2004] 11 EGCS 139)
    A flat was sold, but before the purchasers registered the transfer, the seller was sequestrated, and his trustee registered his interest as trustee. The buyer complained that the trustee was unjustly enriched.
    Held: The Act defined the estate . .

(This list may be incomplete)
Last Update: 05-Dec-15 Ref: 194239

Surtees And Another, Assignees Of The Estate And Effects Of A Bankrupt, v Ellison; 6 Jul 1829

References: [1829] EngR 594, (1829) 9 B & C 750, (1829) 109 ER 278
Links: Commonlii
Evidence of a trading which ceased before the 6 G. 4, c. 16, took effect, will not support a commission of bankrupt issued after that time.
This case is cited by:

(This list may be incomplete)
Last Update: 19-Oct-15 Ref: 322462

In Re Cabletel Installations Ltd; 1 Jul 2004

References: [2005] BPIR 28
Coram: Chief Registrar Baister
The court criticised the remuneration claimed by the insolvency office-holder were work had been carried out at too senior a level, and the calculation was an uncritical application of the time spent, and where there were more and lengthier meetings and excessive reviews than the administration warranted. Chief Registrar Baister set out the approach he would adopt to fixing the applicant administrators’ remuneration: ‘I shall examine the main work streams and some of their subcategories and consider the time spent and whether it was justified; I shall have regard, insofar as I can, to the level at which work has been done; I shall consider the benefit of the work done and, to any extent appropriate, whether it was necessary. I shall then look at the larger picture and consider the case in terms of value. In doing so I shall have regard to the factors set out in the rules and to other factors peculiar to this case. I shall bear in mind that time spent is a measure not of the value of the service rendered but of the cost of rendering it. I do not propose, therefore, to allow myself to be influenced to any real extent by the final figures which the administrators claim, since, it seems to me that, prima facie, they reflect the cost of time rather than the value of the service provided. I shall resolve any doubts I have against the administrators.’
This case cites:

  • Cited – In Re Independent Insurance Co Ltd (No 2) ([2003] 1 BCLC 640)
    Ferris J was required to consider the insolvency office-holders’ remuneration, assisted by a solicitor with wide insolvency experience, whose report sets out the general principles then accepted by the insolvency profession as the yardstick for . .
  • Cited – Mirror Group Newspapers Plc -v- Maxwell and Others (No 2) ChD (Times 15-Jul-97, [1998] 1 BCLC 638)
    Court reminded insolvency practitioners of fiduciary duties to creditors when refusing application for further payment on account of costs. Ferris J considered the principles applicable to fixing the remuneration of receivers of the estate of Robert . .

This case is cited by:

  • Cited – Brook -v- Reed CA (Bailii, [2011] EWCA Civ 331)
    The court was asked ‘What relation should the costs and remuneration bear to the circumstances, and in particular the size, of the bankruptcy?’
    Held: Though the judge should have made express reference to and placed reliance upon the Practice . .
  • Cited – Brook -v- Reed CA ([2012] 1 BCLC 379, [2011] BPIR 583, Bailii, [2011] BCC 423, [2011] EWCA Civ 331, [2012] BCLC 379, [2012] 1 WLR 419, [2011] 3 All ER 743, [2011] NPC 34, [2011] 4 Costs LR 622)
    The court was asked: ‘What relation should the costs and remuneration bear to the circumstances, and in particular the size, of the bankruptcy?’ The bankrupt had considered that the costs first awarded to the trustee in bankruptcy and the trustee’s . .

Last Update: 24-Sep-15 Ref: 430875

Leake v Loveday And Brooks; 21 Nov 1842

References: [1842] EngR 1063, (1842) 4 Man & G 972, (1842) 134 ER 399
Links: Commonlii
A in 1837 bought goods of B, and allowed B to remain in possession of them up to 1839, when B became bankrupt. B’s assignees made no claim, and B. retained possession of the goods until 1841, when the sheriff under a fi fa against B seized and sold the goods. After the sale B’s assignees gave notice of their claim to the sheriff, who upon receiving an indemnity handed over the proceeds to them. In trover brought by A against the sheriff, held :-that, under the plea of not possessed, the sheriff might set up the title of the assignees.

Pemberton v Topham; 15 Nov 1838

References: , [1838] EngR 936, (1838) 1 Beav 316, (1838) 48 ER 962
Links: Commonlii
Commonlii In a creditor’s suit instituted by the Plaintiff on behalf of himself and all other creditors, the Defendant is entitled on motion, at any time before decree, to have the bill dismissed, on payment of the demand of the Plaintiff and his costs as between party and party; but if there be other defendants their costs must also be paid.

Utterson v Vernon And Others; 5 Feb 1790

References: (1790) 3 Term Reports 539, [1790] EngR 2276, (1790) 3 TR 539, (1790) 100 ER 721
Links: Commonlii
Coram: Lord Kenyon Ch J, Grose, Buller, Ashurst JJ
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 provable debt. It was argued that the agreement did not provide for payment of a sum certain but only for the replacement of the stock at some indefinite point in the future. It was therefore a claim for unliquidated damages.
Held: (Majority) There was a provable debt.
Lord Kenyon thought that there was a provable debt in an amount equal to the value of the stock on the day of bankruptcy.
Ashurst J said that the only provable debts were those which could be recovered in the form of an indebitatus assumpsit, thus excluding any claim in damages.
Buller J said that the form of action was not determinative and the real question was whether the amount of the debt could be ascertained without the intervention of a jury.
Grose J said that a creditor could prove for a claim in damages provided that they were in a liquidated sum.
Lord Kenyon CJ said: ‘The question in this case depends on a simple principle of law, which cannot be doubted. It is clear, that where one person, previous to his bankruptcy, is indebted to another in a precise sum which is ascertained, the latter may prove his debt under the commission: but it is as clear, that where there is only a cause of action existing, where the debt is to arise on a stipulation which has not been broken previous to the time of the bankruptcy, and where the debt remains to be inquired into, there the creditor cannot prove his debt under the commission, and the demand will remain undischarged by the certificate.’
This case is cited by:

  • Cited – McGuinness -v- Norwich and Peterborough Building Society CA (Bailii, [2011] EWCA Civ 1286, [2012] BPIR 145, [2011] NPC 117)
    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 . .

HM Customs and Excise v Jack Baars Wholesale, Baars, and Baars; CmpC 16 Jan 2004

References: [2004] EWHC 18 (Ch), [2004] BPIR 543
Links: Bailii
Coram: Mr Justice Lindsay
Statutes: Insolvent Partnerships Order 1994
This case is cited by:

  • Cited – Re Autotech Design Ltd, HMRC -v- Autotech Design Ltd ChD ([2006] EWHC 1596 (Ch))
    Michael Briggs QC summarised the approach to be adopted by the court at the hearing of for the appointment of an interim liquidator pending the hearing of an insolvency petition brought by the Revenue: ‘Although the formulations of the approach to . .
  • Cited – Revenue & Customs -v- SED Essex Ltd ChD (Bailii, [2013] EWHC 1583 (Ch))
    The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
    Held: The . .

Patrick v Shedden; 29 Apr 1853

References: [1853] EngR 496, (1853) 2 El & Bl 14, (1853) 118 ER 674
Links: Commonlii
S raised an action against P before the Lords of Session in Scotland, who dismissed the action, and found P entitled to his expenses. S appealed to the House of Lords. Pending the appeal, P petitioned the Lords of Session for decree arid interim execution, under stat, 48 G 3, c 151, s. 17, for the expences. The Lords of Session allowed the decree, pronouncing an interlocutor and interim decree for payment upon security to repay (‘caution to repeat’}in the event of a reversal of the original judgment in the House of Lords, with warrant, in failure of payment after a time named, to poind S’s goods. – Security having been given, and the time havirig expired, P now sued for the amount of the expences.
Held: The action was not maintainable, the decree for payment not being in the nature of a final judgment.

Ex Parte Job Broadhurst In The Matter Of Job Broadhurst; 7 Dec 1852

References: (1832) 22 LJ Bank 21, [1852] EngR 1101, (1852) 2 De G M & G 953, (1852) 42 ER 1145
Links: Commonlii
Coram: Maule J
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 contractual liability to pay a stated or liquidated sum but as a liability for unliquidated damages. The court an appeal against the refusal of the Commissioner to set aside the adjudication of bankruptcy.
Maule J said: ‘The question now before the Court is, whether the debt or alleged debt or demand asserted to be due is one which will be sufficient, as a petitioning creditor’s debt, to support an adjudication in bankruptcy. I am of opinion that it is not. It is clear from the recitals in the deed of partnership which contains the covenant in question, that the engagement entered into was one entered into for the benefit of Mr Walker. The covenant was with Mr Walker for the benefit of Mr Walker, and was not a covenant with Mr Walker for the benefit and on behalf of Walker, Perry & Broadhurst. They had, in fact, no interest in it, but Mr Walker was alone interested; it was a covenant to pay the difference between the debts due from the old firm stated in the schedule and any further debts; it was to pay the excess of one set of debts-over the amount of debts due to the firm. That being so, it seems to me impossible to turn the covenant into a covenant to pay a liquidated sum, or any sum, to Walker. The covenant could not be performed by doing that; the object of the parties was to put the firm in the same position in which they would be if the debts, active and passive, were to the amount stated in the covenant, and there is no specific sum engaged to be paid to Walker. It cannot be treated at law as a specific sum of money to be received, for the right to receive would be co-extensive only with the demand sustained; and this cannot be so made the subject of computation as to be a fit ground for a petitioning creditor’s debt. No action could be framed upon it. I do not mean to say that a covenant to pay to A. for the benefit of A, B. and C. may not make a good petitioning creditor’s debt. In the present case there might not be a sufficient damage to constitute the debt; or, even suppose that damage to the amount of 100l, was shewn, still it does not follow that the money could have been recovered, as anything to be recovered must be in the shape of damage, and such damage is not of a character to amount to a petitioning creditor’s debt.’
This case is cited by:

  • Cited – McGuinness -v- Norwich and Peterborough Building Society CA (Bailii, [2011] EWCA Civ 1286, [2012] BPIR 145, [2011] NPC 117)
    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 . .

HM Revenue and Customs v GMAC UK Plc, BT Plc v HM Revenue and Customs; UTTC 3 Aug 2012

References: [2012] UKUT 279 (TCC)
Links: Bailii
UTTC VAT Bad debt relief – Insolvency Condition, Property Condition – whether valid under EU law – No; whether repayment claim resulted in a windfall contrary to EU law – need for reference – Yes; Time limit for making claims – whether time-barred as a result of overriding provisions of EU law.

Re Doran Constructions Pty Ltd (in liq); 27 Mar 2002

References: [2002] NSWSC 215, 168 FLR 116, (2002) 194 ALR 101, 20 ACLC 909
Links: Austlii
Coram: Campbell J
Austlii (Supreme Court of New South Wales) CORPORATIONS – winding up – liquidator’s examination – circumstances in which liquidator entitled to ask questions relating to legal advice given to company in liquidation – EVIDENCE – liquidator’s examinations – whether evidence given at is governed by Evidence Act 1995 (NSW) – EVIDENCE – legal professional privilege – circumstances in which joint retainer of solicitor exists – EVIDENCE – procedure to adopt when deciding whether legal professional privilege does not exist – EVIDENCE – waiver of client legal privilege – disclosure of substance of advice – disclosure made knowingly and voluntarily – disclosure by agent or employee authorised to make it – disclosure made under compulsion of law
This case is cited by:

BT Plc v HM Revenue and Customs; UTTC 3 Aug 2012

References: [2012] UKUT 278 (TCC)
Links: Bailii
Coram: Warren J P, Hellier TJ
UTTC VAT Bad debt relief – Insolvency Condition, Property Condition – whether valid under EU law – No; whether repayment claim resulted in a windfall contrary to EU law – need for reference – Yes; Time limit for making claims – whether time-barred as a result of overriding provisions of EU law.

Wagstaff v Read; 20 Nov 1683

References: [1683] EngR 80, (1683) 2 Chan Cas 156, (1683) 22 ER 892 (C)
Links: Commonlii
Purchaser not hurt in Chancery – Portman became bankrupt, the commissioners assign his Estate, whereof the Plaintiff made Title to some Goods, and exhibits his Bill. against the Defendant to discover the Goods, and their Value, and what and how much he paid for them, because the Plaintiff charges, they came to the Defendant’s possession after the bankrupt broke : The Defendant sets forth, for what Goods did ever come to his Hands, he bought of Portman bona fide, for a full and valuable consideration, nor did not know, nor had any Notice that at the Time of buying until the now Bill, was a bankrupt, or of any Account of his Bankruptcy, and pleads this Matter against any Discovery.

Pritchard v Hitchcock; 6 Jun 1843

References: (1843) 6 Man & G 151, [1843] EngR 760 (B)
Links: Commonlii
P (the plaintiff) had drawn bills requiring WH to pay P a sum of money three months after date. WH accepted them, but to gain more time for WH, GH (the defendant) guaranteed payment of the bills. P pressed for payment. WH did ultimately pay P but was declared bankrupt. WH’s assignees in bankruptcy brought an action against P and obtained recovery of the sum paid as a fraudulent preference. P then sued GH on the guarantee. One defence of GH was that P had been paid and the debt discharged. GH contended that the judgment in favour of the assignees was not admissible to prove non-discharge of the debt.
Held: P was entitled to prove in the circumstances payment by WH had not discharged the debt, but GH was not a party to the assignee action. The matter was ordered to be retried as to whether there had been ‘a real and genuine payment of the bills by the bankrupt.’
This case cites:

This case is cited by:

  • Cited – Lloyds Bank Plc -v- Independent Insurance Co Ltd CA (Times 03-Dec-98, Bailii, [2000] 1 QB 110, [1998] EWCA Civ 1853)
    The bank had made an electronic transfer of funds for a customer in satisfaction of that customer’s proper debt, but it was done under a mistake of fact as to the cleared status of funds received.
    Held: The appeal was turned down. The bank was . .

Cook And Others, Assignees Of Williams Hitchcock, A Bankrupt, v Pritchard; 15 Jan 1843

References: [1843] EngR 182, (1843) 5 Man & G 329, (1843) 134 ER 590
Links: Commonlii
This case is cited by:

  • See Also – Pritchard -v- Hitchcock ((1843) 6 Man & G 151, [1843] EngR 760 (B), Commonlii)
    P (the plaintiff) had drawn bills requiring WH to pay P a sum of money three months after date. WH accepted them, but to gain more time for WH, GH (the defendant) guaranteed payment of the bills. P pressed for payment. WH did ultimately pay P but . .

Re Swissair; Chd 6 Aug 2009

References: [2009] EWHC 2099 (Ch)
Links: Bailii
Coram: David Richards J
The main company had been liquidated in Switzerland, The liquidators of the assets in the UK sought directions as to the payment of the proceeds of the liquidation in view of the fact that many creditors here had sought payment in Switzerland.
Statutes: Insolvency Act 1986

Kaneria, Kaneria v Patel, Kaneria, Kaneria, Kaneria, Kaneria, Guidezone Ltd Sub Nom In The Matter Of Guidezone Ltd (2000); 13 Jul 2000

References: (2000) 2 BCLC 321
Coram: Jonathan Parker J
cw The petitioners’ case was that they had a legitimate expectation that the company’s business would be sold, either by virtue of an agreement to that effect or at their request, was not made out on the facts.
This case is cited by:

  • Approved – Anderson -v- Hogg IHCS (Times 22-Jan-02, ScotC)
    The appellant sought an order under the section for repayment to the company of sums paid to a director by way of extra redundancy payments. He said the payments were improper. His application had been refused, in part because he had not chosen the . .

Nickel and Goeldner Spedition GmbH v ‘Kintra’ UAB: ECJ 4 Sep 2014

References: C-157/13, [2014] EUECJ C-157/13
Links: Bailii
Coram: A. Tizzano, P
ECJ (Judgment) Reference for a preliminary ruling – Judicial cooperation in civil matters – Regulation (EC) No 1346/2000 – Article 3(1) – Concept of an ‘action related to insolvency proceedings and closely connected with those proceedings’ – Regulation (EC) No 44/2001 – Article 1(2)(b) – Concept of ‘bankruptcy’ – Action for payment of a debt brought by the insolvency administrator – Debt arising out of the international carriage of goods – Relationship between Regulations Nos 1346/2000 and 44/2001 and the Convention for the International Carriage of Goods by Road (CMR)
Statutes: Regulation (EC) No 1346/2000 3(1), Regulation (EC) No 44/2001 1(2)(b), Convention for the International Carriage of Goods by Road

Wilson v Greenwood; 17 Jul 1818

References: [1818] EngR 607, (1818) 1 Swans 471, (1818) 36 ER 469
Links: Commonlii
Coram: Lord Eldon LC
Articles of partnership having provided, that on dissolution by death, notice, or misconduct, of a partner, the remaining partners should have the option of taking his share at a valuation, payable by yearly instalments in the course of seven years: and that on the bankruptcy or insolvency of a partner, the partnership should be immiediately void as to him ; by a deed, four years subsequent, the partners declared (after a recital that such was their intention in the articles), that in the event of bankruptcy or insolvency, the same arrangement should be practised as on dissolution by death, notice, or misconduct : one of the partners having become bankrupt within a few months after the execution of the latter deed, his assignees are not bound by it. Whether a provision in articles of partnership, that on the bankruptcy of a partner his share shall be taken by the solvent partners, at a sum to be fixed by valuation, and payable by installments in a course of years, is not void by the statutes concerning bankrupts.
An owner of property may, on alienation, qualify the interest of his alienee, by a condition to take effect on bankruptcy; but cannot, by contract or otherwise, qualify his own interest by a like condition, determining or controlling it in the event of his own bankruptcy, to the disappointment or delay of his creditors.
This case is cited by:

Capita Financial Group Ltd v Rothwells Ltd; 20 Apr 1989

References: (1989) 15 ACLR 348
Links: NSW
Coram: Rogers CJ
(New South Wales) The parties had guaranteed borrowings of a third party. The plaintiff had paid on call, and now sought a contribution from the defendant. After issue, the defedant began a winding up petition. The plaintiff sought leave to continue the action.
Held: It was a given that a plaintiff in this position must demonstrate a prima facie case. It had not done so here, but an arguable case had been shown, and this could be supplemented later by affidavit evidence. The claim could proceed.
This case is cited by:

Slack v Tolson; 4 Aug 1826

References: [1826] EngR 1119, (1826) 1 Russ 553, (1826) 38 ER 213
Links: Commonlii
A, having previously borrowed £1000 of B, executes to him a bond for that sum, and B, two days afterwards, executes a deed, whereby he covenants that the bond shall not be enforced: some years afterwards, B having become bankrupt, his assignees bring an action on the bond, and file a bill to have the deed of covenant declared fraudulent. Held, that the Court will not interfere against the legal operation of the deed; there being nothing to shew that B was insolvent when he executed it; and there being evidence, that A. had also at that time pecuniary claims on E, and that the execution of the bond was accompanied by an agreement, that payment of it should not be enforced.

Robert Hull Terrell v James Button; 16 Mar 1854

References: [1854] EngR 361, (1854) 4 HLC 1091, (1854) 10 ER 790
Links: Commonlii
The intention of the 11th and 12th Vict. c. 45 (the Winding Up Act of 1848), was to provide for debts recoverable only in equity, as well as for those recoverable at law ; and the Master has an uncontrolled discretion (subject to appeal) to allow or disallow, or to allow as a claim only, according to the proofs adduced before him, any demand against a Company.
Certain persons proposed to form a company; they employed A. as their solicitor; he was so named, on provisional registration, under the joint Stock Company’s Act; the Directors were not to be personally liable to the officers of the Company ; the solicitor was continuously employed, until after the company had been completely formed and registered, and until it was wound up. The 44th article of the deed of settlement declared, that ‘a sufficient part of the funds of the Company should, upon complete registration, be appropriated in payment of the expenses of and incidental to the formation of the Company, including those of or having reference to the preparation and execution of that deed.’ When the Company was before the Master on the Winding-up Act, the solicitor presented a demand for services from the earliest period up to that time. The Master allowed the demand as a claim only, and not as a debt, leaving the solicitor to proceed at law : Held, reversing an order of Vice Chancellor Kindersley which had permitted the order of the Master to stand, that the Master ought to have allowed this demand as a debt, but subject to proof that the items came under the description contained in the 44th article, and subject also to taxation. As the solicitor had omitted to bring the 44th article to the notice of the Vice Chancellor, his order, though reversed, was reversed without costs.
Statutes: Winding Up Act of 1848