Question

We have discovered a serious structural defect in a development we completed about seven years ago. All the indications are that this is due to defective design by the design and build contractor. The contractor is insolvent. Is there anything that we can do?

Answer

1. On 29th September 2004 the Trustees of the Ashtead United Charity allocated Mrs Janet Watts accommodation in an almshouse, in fact one of 14 residential flats the Charity owned at Ashstead in Surrey. In May 2015 they issued proceedings for possession based on the allegations that Mrs Watts had acted in an anti-social manner, swearing, spitting, and aggression. This was a breach of the terms of the Appointments Letter under which she was allocated the property.

Permission to request a warrant and reissue of warrant 

After three years in the making the new insolvency rules[1] will come into force on 6 April 2017. The new rules create a consolidated, restructured and modernised take on the 1986 rules to take account of various legislative changes[2]. 

A Trustee in Bankruptcy is granted a wide statutory power under section 366 of the Insolvency Act 1986 (“the Act”) to ask the Court, at any time after the Bankruptcy Order has been made, to privately examine any person believed to be in possession of the Bankrupt’s “property” or of information relating to his affairs, to assist with his or her statutory investigations.

There have been a number of decisions over the past decade concerning the interpretation of section 310 of the Insolvency Act 1989 (“IA 1986”) together with section 11 of the Welfare Reform and Pensions Act 1999 (“WRPA”) in respect of whether a trustee in bankruptcy has the ability to compel a bankrupt to draw down payments from his personal pensions where he was eligible to make such an election but had not done so.

The legal position

On 11 October 2016, the High Court10 held that statutory interest payable on an insolvency (under rule 2.88(7) IR 1986) is not “yearly interest” for UK tax purposes. Such statutory interest is therefore not subject to UK withholding tax (20%).

The facts of the case are somewhat unusual in that there was a substantial surplus in the administration and the statutory interest was estimated at £5bn. However the decision is a welcome clarification of the position. It also confirms HMRC’s previous guidance on the taxation of statutory interest (subsequently withdrawn).

On 29 November 2016, the First-tier Tribunal9 held that the issue of growth shares to certain key employees had inadvertently caused an existing class of ordinary shares to carry a preferential right to assets on a winding up. The effect of this was that both prior ordinary share issues, and future share issues, failed to meet the requirement of the Enterprise Investment Scheme (EIS) rules.

The Football League has announced the toughening up of its insolvency rules.  Football League clubs will face stricter sanctions and be forced to repay the majority of their debts to unsecured creditors under new rules agreed at the competition’s annual conference.

Parties in the construction sector seeking to enforce an adjudicator’s decision against a

company with the benefit of a statutory moratorium were given fresh guidance in the recent case of South Coast Construction Ltd v Iverson Road Ltd [2017] EWHC 61.

Facts

In September 2013 Iverson Road Ltd (“Iverson”) engaged South Coast Construction Ltd (“SCC”) to complete various building works in London. In June 2016 SCC halted the work for non-payment of sums due by Iverson.