Mistaken discharge of land mortgages and rectification atthe Land Registry – can a discharged mortgage secure asubsequent advance?

It is well-established law that a mortgage can be used to secure further advances made by a lender. What happens when a registered mortgage is mistakenly discharged at the Land Registry however? Can it be rectified and used as security for a subsequent advance? NRAM Plc v Evans and another - 2015 EWHC 1543 explores the issues.

The recent decision in Brooks and Willetts (Joint Liquidators of Robin Hood Centre plc) v Armstrong and Walker [2015] EWHC 2289 sets out guidance on the burden of proof for directors in wrongful trading claims when seeking to establish that they have taken every step to minimise the potential loss to creditors. We explore the issues raised for practitioners.

The background to the case

The question of appropriate action in the face of directors’ duties to creditors in the pre-insolvency “twilight zone” is a perennial one. In particular, the question of preservation of asset value (given all the hoo- ha about pre-packs), and whether to transfer out assets before insolvency has an impact on value, is fraught with difficulty. Two recent cases offer contrasting versions of how to go about it.

Background – Re French UK plc

We all know that statutory demand can be issued for undisputed debts in excess of £750, and if not satisfied for 21 days, the stat demand is prima facie evidence of insolvency. What happens where there are multiple dents of less than £750 each however? Howell v Lerwick Commercial Mortgage Corporation Ltd [2015] EWHC 1177 (Ch) provides an insight.

The background

In Mark Howell v Lerwick Commercial Mortgage Corporation Limited, the High Court has held that statutory demands will not necessarily be set aside if the undisputed debt is less than £750, where there other debts which would take the cumulative total over this limit.

Facts

Mr Howell obtained finance from Lerwick in 2010 to develop a property and paid £2,750 to Lerwick to obtain a valuation. Mr Howell claimed that the valuation provided was sub-standard, and as a result there were delays in the development and its subsequent sale.

The Tribunal has upheld HMRC's decision that a company (Danesmoor Ltd) should not be entitled to recover input VAT incurred on professional fees for a corporate restructuring. HMRC had not allowed the recovery of the input VAT on the grounds that the services were not provided to the company. The appellant argued that the advisors had been engaged and paid for by the company directly in connection with the restructuring and as such the input VAT should be recoverable.

On 20 May 2015, the European Parliament adopted a new version (the "Revised Regulation") of Regulation 1346/2000 on insolvency proceedings (the "Original Regulation").

According to the statement of the Council's reasons, the Revised Regulation is aimed at making cross-border insolvency proceedings more effective with a view to ensuring the smooth functioning of the internal market and its resilience in economic crises.

Recent weeks have seen a number of decisions concerning liquidations – in this article we explore three of the more interesting ones.

1)  Overseas application of s.213 - Jetivia SA and another v Bilta (UK) Ltd (in liquidation) and others [2015] UKSC 23

The past three months have seen the publication of a spate of forthcoming regulatory and legislative changes. In this bulletin we investigate some of the more significant developments.

Insolvency Act 1986 (Amendment) Order 2015 – threshold for bankruptcy petitions

This order, which comes into effect on 1 October 2015, makes amendments to section 267(4) IA 1986, increasing the threshold for bankruptcy petitions to £5,000 (currently £750).

En date du 20 mai 2015, le Parlement Européen a adopté une nouvelle mouture (le Règlement Révisé) du Règlement 1346/2000 relatif aux procédures d’insolvabilité (le Règlement Original).

Aux termes de l’exposé des motifs du Conseil, l’objectif du Règlement Révisé était de rendre les procédures d’insolvabilité transfrontières plus efficaces avec l’intention plus large d’assurer le bon fonctionnement du marché intérieur et sa résilience lors des crises économiques.