The applicant applied to strike out a winding up petition that had been presented against it. The parties had entered into two construction contracts under which the applicant had subcontracted the fabrication and erection of steelworks to the respondent in relation to two separate sites. The contracts failed to provide an adequate mechanism for payment such that the Housing Grants, Construction and Regeneration Act 1996 (as amended) (HGCRA 1996) and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended) applied.

Picard, a trustee in bankruptcy, launched proceedings under the anti-avoidance provisions of the US Bankruptcy Code against Vizcaya, a BVI investment fund which had invested approximately $330m with Bernard Madoff via his New York firm. Prior to his fraud being discovered in late 2008, Vizcaya had been repaid $180m.Picard obtained a judgment against Vizcaya and its shareholders in the New York Bankruptcy Court. The judgment against Vizcaya was for $180m, $74m of which had been transferred to its Gibraltar holdings.

OTL was placed into compulsory liquidation. Prior to this it transferred monies to a trust located in HK of which N was perceived to be the principal trustee. The OR as liquidator applied for an order under s 236(3) of the Insolvency Act 1986 (IA 1986) that N produce a witness statement with supporting documents in relation to the company’s affairs. The primary question for HHJ Hodge QC was whether s 236(3) of the IA 1986 could have extra-territorial effect as N was resident in HK.

Held

The Court of Appeal upheld the finding at trial of HHJ Bird (sitting in the High Court) that save where there is fraud, a debtor is not legally obliged to volunteer information to an assignee regarding his arrangement with the assignor. The dispute arose because Bibby, a factor (and ‘Assignee’), purchased debts from Morleys Ltd (‘the Assignor’), owed to it by HFD Ltd and MCD Ltd (the ‘Customers’/‘Debtors’). The contract between the Assignor and Customers was such that the latter were entitled to a rebate, at the beginning of each calendar year, on purchases made.

The serious consequences of an adjudication of bankruptcy against an individual has long justified the strict requirement that bankruptcy petitions be personally served. Rule 6.14 of the Insolvency Rules 1986 requires as much, and says that ‘service shall be effected by delivering to [the debtor] a sealed copy of the petition’. But what constitutes delivery where the debtor declines to accept the petition from the process server?

Summary

Having successfully obtained judgment for your client in a case where your firm of solicitors is acting under a conditional fee agreement (CFA), it is only natural that thoughts will turn to the firm’s own impending financial reward. But the terms of a CFA, negotiated at the outset of the case, can prove to be a barrier to their underlying commercial purpose: payment by result.

Section 262(1) of the IA 1986 provides that a debtor, creditor or nominee may apply to the court where: (a) a voluntary arrangement approved by a creditors’ meeting summoned under section 257 unfairly prejudices the interests of a creditor of the debtor, or (b) there has been some material irregularity at or in relation to such a meeting. 

Khandanpour v Chambers [2019] EWCA Civ 570

Should relief from sanctions be granted where a judgment debtor purports to appropriate monies paid to satisfying a procedural condition for setting aside a default costs order, but the creditor purports to appropriate the monies instead to the judgment debt?

Background

How deep is the “pool of facts in which it is permissible to fish for the basis of the new cause of action” if a party wishes to benefit from the ‘relation back’ doctrine when calculating limitation periods? The Court of Appeal gives guidance on the meaning of “the same or substantially the same facts” for the purpose of CPR r 17.4(2).