The High Court has granted three insolvent Cayman companies (each in liquidation) a worldwide freezing order in support of proceedings against Mr Terrill, an individual who operated behind the companies' respective corporate directors as their sole director and shareholder.  The court exercised its discretion to grant the injunction despite there being a delay of more than a year between the discovery of suspicious transactions linked to Mr Terrill and a Letter of Request applying for a freezing order being sent by the Cayman court together with the companies' liquidators to the Englis

Introduction

The European Commission has published the VAT gap report for 2013 for 26 member states (Cyprus and Croatia are not included). The VAT gap is an estimate of VAT lost due to fraud and evasion, avoidance, bankruptcies/insolvencies and miscalculations. According to the report, VAT revenue collection in 2013 failed to show significant improvement across member states compared with 2012.

In September 2013 we reported on the Enterprise and Regulatory Reform Act 2013 which provided the Government with the power to extend the law regarding the supply of essential services to insolvent customers. These reforms were anticipated to come into force in April 2014. It has now been announced that the changes will come into force on 1 October 2015.

Extension of essential supplies

In Winnington Networks Communications Ltd v HMRC^[1], the Chancery Division Companies Court (Nicholas Le Poidevin QC) refused the taxpayer company's application to have HMRC's winding-up petitions dismissed, as it had failed to provide evidence that it had a real prospect of successfully disputing the debt claimed by HMRC.

Background

In Smailes and another v McNally and another^[i]the High Court refused the claimant's application for relief from sanctions, finding the claimant's failure in respect of its disclosure obligations under the relevant provisions of the Civil Procedure Rules (CPR 31) amounted to a significant and serious breach of an "unless order".

On 22 April 2015 the Supreme Court handed down its judgment in the case of Jetivia SA and another v Bilta (UK) Ltd (in liquidation) and others [2015] UKSC 23, which was heard in October last year.  In short it decided that: 1) defendant directors cannot raise illegality as a defence to a claim by a company where the directors themselves acted wrongfully; and 2) a claim in fraudulent trading under Section 213 of the Insolvency Act 1986 (Section 213)has extra-territorial effect.

Background

In SwissMarineCorporation Ltd v OW Supply & Trading[1], the High Court refused to grant an anti-suit injunction restraining Danish insolvency proceedings. This case provides a useful discussion of the circumstances in which the court are likely to grant an anti-suit injunction, and in particular where there are jurisdiction issues involving elements of both civil and insolvency proceedings.

In the recent case of HMRC v Munir & Others[1], HMRC successfully applied to the Court for committal of three company officers for contempt of court where an order appointing a provisional liquidator was knowingly breached.

 Background

Removal of requirement for sanction

Previously under section 165 IA 86, liquidators in a voluntary winding up would have to seek sanction of the company (in members’ voluntary liquidation) or of the court or liquidation committee (in creditors’ voluntary liquidation) in order to exercise their powers to pay debts, compromise claims etc. SBEEA removes this requirement so that liquidators can exercise those powers freely. This will aid expeditious winding up of companies. Equivalent provisions have also been put into place for trustees in bankruptcy.