The Court of Appeal has recently considered whether an LPA Receiver owes a duty of care to a bankrupt mortgagor in connection with the way the Receiver deals with the mortgaged property. In a decision which will be welcomed by Receivers and their insurers, the court decided that a Receiver owes no such duties.

The facts

This case concerned whether a fee payable by a tenant for assigning the lease involved the provision of “credit” for the purposes of the Consumer Credit Act 1974 (CCA).

In the recent case of Bank of Cyprus UK Limited v Menelaou, the Supreme Court showed the flexibility of the equitable remedy of unpaid vendor's lien.

Facts of the case

It was anticipated that more radical thoughts would emerge from Lord Justice Jackson’s latest speech last night to the Insolvency Practitioners’ Association on the subject of rolling out more fixed costs, and so it proved.

In Sharma v Top Brands Ltd [2015] EWCA Civ 1140, the Court of Appeal refused to allow a former liquidator of a company (which was a vehicle for VAT fraud) to rely on the illegality defence to avoid liability for a claim brought against her for breach of duty under section 212 of the Insolvency Act 1986 (IA 1986).

Background

In the case of Bibby Factors Northwest Limited v HFD Limited and MCD Group Limited the Court of Appeal has ruled that there is ordinarily no duty on a company whose debt has been purchased (the Debtor) to inform the purchasing company (the Funder) of any pre-existing contractual arrangements it has with the company assigning the debt (the Assignor).  If the Funder wants this information it must directly request it.

Implications

Key point

Whilst a winding up petition is not the appropriate forum to conduct a “mini trial”, the court is not bound to dismiss the petition if the dispute raised by the debtor company lacks substance.

The facts

Key point

The Court has discretion to suspend time for the purposes of limitation periods when exercising its jurisdiction to restore a company to the register.

The facts

The former director of a dissolved company applied for an order restoring the company and, so that it could then bring claims against third parties that had expired, suspending the running of time during the period when it was dissolved.

The decision

A major consideration for any Claimant in an action seeking monetary damages is whether the Defendant to an action has the assets to meet a judgment, whether that be a claim against an individual or a limited company backed by the personal guarantee of an individual. That consideration should extend to a scenario where the Defendant has a judgment made against them and then either refuses to pay or cannot pay on time. The Claimant may have to seek their bankruptcy to achieve some payment.

http://www.bailii.org/ew/cases/EWHC/Ch/2015/3721.html

Two insurance intermediaries entered into administration. Although heavily insolvent, they had significant funds held in client accounts. Those funds represented insurance premiums collected from customers but not yet paid on to the insurers. The issue therefore arose as to whether the insurers, the customers or the unsecured creditors of the intermediaries were entitled to those funds.