In our update this month we take a look at some recent decisions that will be of interest to those involved in insolvency litigation. These include:
A party on the receiving end of an adjudication is usually in a difficult position. Its situation is only made worse if the referring party is insolvent.
In such a situation, if the adjudicator makes an award in favour of the insolvent company the chances of subsequently recovering any sums awarded in litigation are very limited. While a stay to enforcement may be available, there are costs associated with obtaining a stay which will probably also be irrecoverable.
In Callidus Capital Corporation v. Her Majesty the Queen,[1] the Supreme Court of Canada overturned a troubling 2017 decision of the Federal Court of Appeal. The Supreme Court held unanimously that the bankruptcy of a debtor extinguishes the deemed trust for unremitted GST and HST created in favour of the Crown (“CRA”) by section 222 of the Excise Tax Act (“ETA”).
APPLICATIONS FOR LEAVE TO APPEAL DISMISSED
38144 Ronald Baldovi v. Her Majesty the Queen
(Man.)
Courts – Judges – Reasonable apprehension of bias
2018 was the "year of the CVA", slashing rents and forcing landlords to get to grips with long-winded CVA proposal documents in an attempt to allow struggling tenants to manage their debts, turn around their businesses and avoid terminal insolvency situations.
The unfortunate reality is that even if they are approved by landlords and other creditors, not all these CVAs will be successful and many tenants are likely to end up in administration.
A trustee in bankruptcy lost all rights to the proceeds of sale of a freehold property after he disclaimed title to it
Background
Mr Sleight was the trustee in bankruptcy of an insolvent estate. The deceased’s assets included several freehold properties that were charged to banks where the value of the property was less than the amounts due under the charges. Given the negative equity, the trustee in bankruptcy disclaimed title to these properties as they constituted “onerous property”.
Creditor not obliged to take steps in foreign proceedings to preserve security
Pensions New (PN) has often had cause to ask himself what he knows. A similar sort of question was frequently posed by the French essayist, Michel de Montaigne. Montaigne lived between 1533 and 1592 and he answered this question over the course of a period of time during which he produced several volumes of great essays. In those volumes, Montaigne covered many subjects however he never covered the subject of the occupational defined benefit pension scheme. So far PN knows, this is the first article ever written about Montaigne’s relationshi
On 31 October 2018 the Supreme Court issued its Judgment in the appeal of Dooneen Ltd (t/a McGinness Associates) and another (Respondents) v Mond (Appellant) (Scotland) [2018] UKSC 54.
The appeal had been brought by Mr Mond who had sought to overturn the decision of the Inner House of the Court of Session (Dooneen Ltd & Others V Mond [2016] CSIH 59).
Factual background