Bankruptcy Annulment. The appellants had successfully applied for annulment of bankruptcy orders made against them on the ground that those orders should not have been made. The annulment order was made conditional on the appellants' paying the costs of the trustee in bankruptcy. The Court of Appeal, Civil Division, held that, in circumstances where neither the appellant nor the trustee had acted improperly, interference with the way in which the judge had addressed the issue of the trustee's costs could not be justified.
Equity Marshalling. The Court of Appeal, Civil Division, gave consideration to the established authorities around the principle of marshalling and its extended form.
Company Director. The defendant was the former director of a company to which the claimants were appointed joint liquidators. The Chancery Division held that the claimants had been entitled to relief against the defendant for sums paid out of the company in breach of his duties as a director, in circumstances where the company had substantial creditors and liabilities and without the defendant giving any consideration to the best interests of the company's creditors as a whole.
Company Winding up. The claimant sought permission to bring a claim against the defendant in liquidation for a declaration that the claim that the defendant had issued against him had been released by the defendant and could not be brought. The defendant's liquidators contended that the court should not interfere with their strategy of seeking to negotiate and mediate all claims. The Companies Court, in allowing the application, held that the liquidators' opposition to the application was unjustifiable, given the failure of negotiations and that case management considerations favoured the grant of permission.
Company Company going into administration. The administrators of a company in administration applied for the court to approve proposals in circumstances where the creditors of the company had failed to attend the creditors' meeting or to vote approving the proposals. The Chancery Division held that the purpose of the court's powers, under para55.2 of to the Insolvency Act 1986, was to give directions to the administrator in circumstances where there might be some real question as to the course that he should follow. It unnecessarily incurred expenditure in the administration if the court was asked to give directions when no effective purpose was to be served by those directions. In the circumstances of the case, no directions would be given and it was not appropriate for the court to make any order under para 55.2 of Sch B1 to the Act, save to approve the basis of remuneration.
Trust and trustee Constructive trust. The claimants brought a claim against its former director and the controller of the claimant company and its subsidiary on the basis that P's misconduct as the companies' controller had exposed it to the petitioners' claim for which he was accountable as constructive trustee to the claimant. The claim followed the compulsory wind up of the claimant following a petition by the petitioners, who had served statutory demands on the claimant in respect of paymentsmade as part of an intended investment. The Chancery Division held, amongst other things, that the claimant had held sums paid by the petitioners on constructive trust for the petitioners, that P was in breach of fiduciary duties and that P had to fully indemnify the claimant in relation to payments to the claimant, once the petitioners' proof of the tranches was admitted.
Company Director. The liquidators of the claimant company issued proceedings against its directors and third party companies alleging that the defendants had perpetrated a fraudulent conspiracy which had amounted to a breach of fiduciary duty on the part of the directors dishonestly assisted by the other defendants. Two defendant companies applied to strike out the claim against them on the grounds that the company was barred by the principle of ex turpi causa non oritur actio. The High Court dismissed the applications. The Court of Appeal, Civil Division, upheld that decision on the grounds that the fact that the fraudulent director was the directing mind and will of the company had never been regarded as an answer to a claim by the company against the directors for a breach of duty committed against the company.
Bankruptcy Discharge. The Chancery Division allowed an application by a trustee in bankruptcy for an order suspending the discharge of the respondent bankrupt's bankruptcy. The court held that the respondent had failed to provide the trustee with information reasonably required by him and that, in the circumstances, he should be subjected to the penalty of his discharge being suspended.
Company Winding up. The Chancery Division considered an application by a company opposing a compulsory winding-up petition made by the claimant Revenue and Customs Commissioners, and seeking to discharge the provisional liquidators prior of the company to the hearing of the petition. The court held that, on the evidence, there was a powerful inference to be drawn that fraudulent activity had occurred at the company in the relevant period, and that the best course of action was to leave the provisional liquidators in office.
Land Interest in land. The claimant issued proceedings, claiming he had a beneficial interest in a property or was entitled to be repaid a loan. The defendant contended that the claimant had no standing to pursue the claim due to his bankruptcy. The Chancery Division, in dismissing the claim, held that the claimant lacked standing, as the property had come under the control of the official receiver and vested in the claimant's trustee in bankruptcy upon the latter's appointment.