Truex v Toll: ChD 6 Mar 2009

The bankrupt appealed against an order in bankruptcy made against her on application by her former solicitors in respect of their unpaid costs. The bankrupt said that since the bill was yet untaxed, it might be altered and could not base a statutory demand.
Held: The bankrupt’s appeal was allowed. A claim for solicitors’ fees not as yet judicially assessed or determined is not a claim for a liquidated sum which can be the subject of a bankruptcy petition under section 267 of the Insolvency Act 1986, even if the period for challenge under the 1974 Act has expired. An agreement converting an unliquidated debt into a liquidated one must be a binding agreement. That would mean an agreement for consideration, that is to say an agreement as to a fixed amount, or an agreement as to hourly rates and time spent in consideration of future services, or a compromise agreement, or conduct giving rise to an estoppel according to established principles.

Proudman J
[2009] 2 FLR 250, [2009] PNLR 21, [2009] Fam Law 474, [2009] 1 WLR 2121, [2009] BPIR 692, [2009] 4 All ER 419, [2009] EWHC 396 (Ch), [2009] WLR (D) 85
Bailii, WLRD
Insolvency Act 1986 267
England and Wales
CitedIn Re Laceward Ltd ChD 1981
The expression ‘proceedings to recover costs’ in the Solicitors’ Remuneration Order 1972 . . includes a winding up petition even though such a petition does not lead to an order for payment of the sum in question. It may well be, and I incline to . .
CitedRe a debtor No 833 of 1993 and No 834 of 1993 ChD 1994
The court allowed a solicitor’s statutory demand to lie despite the debtors’ argument based on the right to taxation of the underlying bill. ‘Solicitors would be placed in an intolerable position if no statutory demand could be served as long as it . .
CitedIn Re a Debtor No 32 of 1991 (No 2) ChD 1994
It was an abuse of process for a firm of accountants to serve a statutory demand for the amount of their bill. Vinelott J said of the situation where a demand is made for payment of reasonable remuneration for services rendered: ‘I do not say that a . .
CitedRe Le Winton ChD 31-Jul-2007
Registrar Simmonds considered that: ‘in order to convert what is clearly an unliquidated sum to a liquidated sum there must be . . clear and unequivocal conduct or agreement on the part of the debtor to demonstrate acceptance of those bills of costs . .
CitedThomas Watts and Co (a Firm) v Smith CA 16-Mar-1998
The court considered the status of an untaxed solicitor’s bill of costs against a client for whom he had acted in defamation proceedings. Sir Richard Scott V-C said: ‘It is a fact that [the client] never entered into any contract to pay the sums as . .
CitedO Palomo Sa v Turner and Co; Turner and Co v O Palomo Sa CA 28-Jul-1999
A solicitor’s bill could only be taxed within one year of its delivery, but the common law right to challenge a bill on the grounds that the amount charged was unreasonable could continue after that time limit. The common law right to object to . .
CitedJoseph, Regina (on the Application Of) v Manches and Co CA 29-Jan-2002
. .
CitedConnolly v Harrington (Liquidator of Chelmsford City Football Club (1980) Ltd 17-May-2002
An application for the assessment of a solicitors bill may be made informally. . .

Cited by:
CitedMcGuinness v Norwich and Peterborough Building Society ChD 23-Nov-2010
The claimant appealed against his bankruptcy saying that it had followed as statutory demand based upon his alleged default under a guarantee of his brothers mortgage borrowings. He said that such a claim was not a liquidated sum within the 1986 . .
CitedMcGuinness v Norwich and Peterborough Building Society CA 9-Nov-2011
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 . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Legal Professions

Updated: 02 November 2021; Ref: scu.316600