Debtor (No. 490-SD-1991), Re A
| Jurisdiction | England & Wales |
| Date | 1992 |
| Court | Chancery Division |
Bankruptcy - Debt - Statutory demand - Dispute as to amount of debt - Part of debt disputed on substantial grounds - Whether demand to be set aside in advance of payment of undisputed part -
The creditor issued a statutory demand for £30,000. The debtor applied under rule 6.5(4)(b) of the Insolvency Rules 1986F1 to have it set aside on the ground that part of the debt, amounting to £5,000, was disputed on substantial grounds. The registrar in bankruptcy dismissed the application.
On the debtor's appeal: —
Held, dismissing the appeal, that where part only of a debt claimed in a statutory demand was disputed on substantial grounds the demand could justly form the basis for the presentation of a bankruptcy petition; and such a demand ought not therefore to be set aside under rule 6.5(4)(b) unless the undisputed portion of the debt had been paid.
The following cases are referred to in the judgment:
Debtor (No. 1 of 1987), In re A [
Debtor (No. 10 of 1988), In re A [
The following additional case was cited in argument:
Smith (A Bankrupt), In re, Ex parte Braintree District Council [
APPEAL from Mr. Registrar James.
On 8 November 1991 Mr. Registrar James dismissed with costs the debtor's application under rule 6.5(4)(b) of the Insolvency Rules 1986 to set aside the creditor's statutory demand dated 17 May 1991 for £30,000. By a notice of appeal the debtor appealed on the grounds that the registrar had erred in law (1) in refusing to set aside the statutory demand when part of the debt claimed therein, namely £5,000 out of £29,193.22, was disputed on grounds which appeared to be substantial, that dispute being based entirely upon evidence emerging from letters written by the creditor to the debtor; (2) by holding that he was bound to follow dicta of Nicholls L.J. in In re A Debtor (No. 1 of 1987) [
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Gladney v Tobin
...(No 1 of 1987) [1989] 1 WLR 271, and the subsequent decision of the Chancery Division (Hoffman J) in In re A Debtor (No 490-SD-1991) [1992] 1 WLR 507 (both cited by Revenue in this appeal), it is always open to a debtor to pay the undisputed portion of the debt and then to dispute any add......
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Re a Debtor (No 88 of 1991)
... ... 1029E–F, G–1030A, 1031E) ... The following cases are referred to in the judgment: ... Debtor (No. 1 of 1987), In re A [1989] 1 W.L.R. 271; [1989] 2 All E.R. 46, C.A ... Debtor (No. 490-SD-1991), In re A [1992] 1 W.L.R. 507; [1992] 2 All E.R. 664 ... Gilmartin (A Bankrupt), In re [1989] 1 W.L.R. 513; [1989] 2 All E.R. 835 ... Laceward Ltd., In re [1981] 1 W.L.R. 133; [1981] 1 All E.R. 254 ... The following additional cases were cited in argument: ... Boston (Martin) & Co. v. Levy [1982] 1 ... ...
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Re A Debtor (Nos. 49 and 50 of 1992)
...in the statutory demand is not of itself a ground for setting aside the demand: see In re a Debtor [1989] 1 WLR 271 and In re a Debtor [1992] 1 WLR 507. In such circumstances, it is submitted, the debtor's remedy is to pay the part of the debt in respect of which there is no genuine triable......