Taylors Industrial Flooring Ltd (Respondent v M. & H. Plant Hire (Manchester) Ltd (Appellant
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE STAUGHTON,LORD JUSTICE MANN |
| Judgment Date | 27 October 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J1027-6 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 89/1024 |
| Date | 27 October 1989 |
[1989] EWCA Civ J1027-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr. Justice Scott)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Staughton
and
Lord Justice Mann
89/1024
MR. R. STERLING (instructed by Messrs Shakespeares, Birmingham) appeared on behalf of the Respondent/Applicant.
MR. G. VICKERS (instructed by Messrs Alsop Wilkinson, Manchester) appeared on behalf of the Appellant/Respondent.
This is an appeal by the petitioning creditor, M. & H. Plant Hire (Manchester) Limited, against an order made by Scott J. in Manchester on 8th May of this year whereby he ordered that a winding up petition presented by the petitioning creditor against a company, the respondent to this appeal called Taylors Industrial Flooring Limited, be struck out and that the costs of and incidental to the petition be paid by the petitioning creditor. The order made by the judge was not on the effective hearing of the petition but on an interlocutory hearing and it could only be justified on the ground that the petitioner was demurrable and its presentation an abuse of the process of the court.
The petition had been presented on 14th April 1989. It is in common form. Paragraphs 5 and 6 read as follows:
"5. The company is indebted to your Petitioner in the aggregate sum of £9,875.28, being the aggregate amount of various invoices delivered by your Petitioner to the Company on various dates between the 30th December 1988 and the 31st March 1989. The invoices were delivered to the company's principal trading address aforesaid. The company has had full notice of the debt. The company has not given any notification of any dispute in connection with the said invoices. None of the aforesaid invoices have been returned by the Post Ofice through the Dead Letter Service. The Company is unable to pay its debts.
6. In the circumstances, it is just and equitable that the Company should be wound up."
The Petitioner therefore prays that the company may be wound up by the court under the provisions of the Insolvency Act 1986.
The petition was duly verified by the statutory form of affidavit, which is all the evidence in support of the petition that is required at the outset. The company obtained from Judge O'Donoghue an injunction restraining advertisement of the petition on the ground that the debt claimed was disputed and the company was solvent. The judge's order striking out the petition was on the inter-partes hearing following that ex parte injunction, but because the petition (because of the injunction) had not been advertised, it was not fully before the court for hearing as the other creditors had not had the opportunity, which the Rules require, to put forward their views on whether they supported or opposed the petition. The judge decided the case on a ground to which I shall come, but he dealt first with the grounds on which the petition was said to be disputed and, without forming a conclusion as to that, he said:
"If the company's case had been based solely on the ground that if the credit terms claimed by the company had been agreed, nothing was yet due, I am not sure that I would have been persuaded by it."
I propose first to look at the factual position before turning to the judge's main ground of decision. The company hired plant from the petitioners. The company's business was as building contractors. The trading began in December 1988. An invoice for the December supply was served on the company in the middle of January, but the amount due in respect of the December supply had not been paid by the time the petition was presented. It was in fact paid by a cheque of the company which is dated 2nd May. There was a further supply in January, for which an invoice was rendered in February. The amount of the December supply was £1,743.28 and thus, under the statutory provisions, enough to found a winding up petition.
The case put forward by the company was that there had been oral agreement in November 1988, before the two companies began dealing with each other, that the company could have sixty days' credit following the month's end of supply. That sixty days equates to two months and sixty days' credit following the month's end of supply, to my mind, in the case of the December supply means the end of February and in the case of the January supply the end of March. What the company sought to spell out of that term was much more complicated. It said that if an invoice is received it is the practice of the company, of which it gives notice in its order forms, that the invoice will not be carried to the ledger until the beginning of the following month unless the invoice has been received within seven days of the commencement of the calendar month. Sixty days' credit following the month's end of supply is thus to be construed as sixty days' credit following the end of the month in which the invoice has been carried to the ledger. Therefore in respect of December, with an invoice in mid-January, it is not carried to the ledger until the beginning of February and the two months credit does not begin to run until the end of February and payment for the December supply is not due until the end of April. Therefore, so it was argued in the documents, nothing was due at the time the petition was presented. It seems to me that that is absolutely untenable as an interpretation of sixty days' credit following the month's end of supply., it was accepted that it was a normal practice in the trade not to carry invoices to ledger until the following month, unless they were received within seven days of the commencement of the calendar month, but, even so, the company had received the invoices for the December and January supply in ample time before the petition was presented and had raised no query on those invoices. In point of fact, on the hearing before the judge there was evidence in reply indicating telephone conversations between a member of the petitioning creditor's staff and the company in respect of the December payment, firstly on 9th March 1989 when the company promised a cheque within two weeks, then on 22nd March when the company promised a cheque next week, and then on 23rd March when the company promised a cheque by Friday 31st March but, as I have said, the cheque did not come until the beginning of May. So far as the facts are concerned, therefore, I take the view that there is no substantial ground for disputing the debts claimed in respect of the January and...
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Sparkasse Bregenz Bank AG Petitioner v Associated Capital Corporation Respondent
...OF COUNSEL 25 Learned Counsel for the Petitioner submitted that he was relying on the following authorities: TAYLORS INDUSTRIAL FLOORING LTD. V PLANT HIRE LTD. [1980 BCLC 216; and in REBAYOILSA [1999 1 WLR 147. Counsel reminded that the onus was on the Company to show the debt is disputed ......
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Sparkasse Bregenz Bank AG Petitioner v Associated Capital Corporation Respondent
...OF COUNSEL 25 Learned Counsel for the Petitioner submitted that he was relying on the following authorities: TAYLORS INDUSTRIAL FLOORING LTD. V PLANT HIRE LTD. [1980 BCLC 216; and in REBAYOILSA [1999 1 WLR 147. Counsel reminded that the onus was on the Company to show the debt is disputed ......