Singla v Hedman & Ors [2009] EWHC 3510 (Ch)

No 3899 of 2007[2009] EWHC 3510 (Ch)IN THE HIGH COURTS OF JUSTICECHANCERY DIVISIONCOMPANIES COURTIn the matter of NINE MILES DOWN UK LIMITEDAnd in the matter of the Insolvency Act 1986Venue Royal Courts of JusticeStrandLondon WC2A 2LLDate Friday, 27 th November 2009
Before
THE HONOURABLE MR JUSTICE KITCHIN
Between
SURJIT SINGLAApplicantTHOMAS HEDMANRespondentsGONE TO HELL LIMITEDRespondentSTONEWOOD COMMUNICATIONS BVRespondent
Digital Transcript of Wordwave International, a Merrill Corporation Company 101 Finsbury Pavement London EC2A 1ERTel No: 020 7422 6131 Fax No: 020 7422 6134Web: www.merrillcorp.com/mls Email: mlstape@merrillcorp.com(Official Shorthand Writers to the Court)
MR CASTLE appeared for ApplicantMR STANCLIFFE appeared for Respondent
JudgmentNo of Folios in transcript - 67No of words in transcript - 4,822
[1]This is an application for summary judgment against the first respondent, Mr Hedman, under s.214 of the Insolvency Act 1986 (“the Act”). The applicant is the liquidator of Nine Miles Down UK Limited (“the Company”), which was compulsorily wound up on 14 November 2007 on a petition issued on 6 June 2007. The applicant was appointed as liquidator by the Secretary of State with effect from 11 February 2008.[2]The principal objects of the Company, as set out in its Memorandum of Association, were the carrying on of business as general merchants of every description, but in fact the Company had only one business activity, which related to the making of a film called Nine Miles Down, based upon a script by two writers, Mr Everett de Roche and Mr Anthony Waller.[3]The Company acquired the rights to make the film pursuant to an agreement between the Company and the third respondent, Stonewood, dated 18 January 2006 (the “One Picture Licence”). Mr Hedman was the sole director of the Company from 19 March 1994 to 15 May 2006, at which time Mr Waller became a co-director. The Company began the business of producing the film in accordance with the One Picture Licence during 2006, and incurred liabilities to various third parties and in particular to a South African company, One Step Beyond CC (“One Step Beyond”), as I shall elaborate later in this judgment. The amount outstanding to One Step Beyond and in respect of which it obtained judgment and permission to wind up the Company is £262,995.[4]Upon this application the applicant seeks a declaration that no later than 24 March 2006, Mr Hedman knew or ought to have concluded that there was no reasonable prospect that the Company would avoid going into insolvent liquidation and that Mr Hedman is liable to make a contribution of such sum as the court may deem just under s.214 of the Act, such sum to include in any event the sum of £262,995, being the sum owed by the Company to One Step Beyond at the date of its liquidation. The background[5]I must now explain a little more of the background to this application and begin with the arrangements made to finance the production of the film. There is no dispute that as at 24 March 2006, the Company had no funds with which to make the film and that it was relying on a group of companies trading under the name Seven Arts (collectively “Seven Arts”) and controlled by a Mr Peter Hoffman to arrange and provide the necessary financial backing and to cover the Company’s liabilities. It is accepted by Mr Hedman there is no evidence before me that the Company had any legal commitment from Seven Arts or any other source to finance the film or otherwise to permit the Company to fulfil its financial obligations. However, Mr Hedman explains in his first witness statement in response to this application that in his experience it would be very unusual indeed for any film company to begin its activities with sufficient funds of its own to make a film. Most films (and almost all films outside the big Hollywood studios) are made by special purpose vehicles (“SPVs”) and almost all rely entirely on finance. It is quite normal to begin work on a film before the SPV has received funds (or a commitment to provide funds) to complete the film for the intended budget. Further, it is common for the budget for a film to change during production. It is obviously true that no revenue is expected until the film is produced and distributed and that until that happens, the SPV is inevitably in debt and can only look to the future completed product to make money. If the film is made and is successful, the venture results in a net gain. If the film is not made or does not sell, then the SPV will fail. There is no reliable way of predicting which films will make money and which will not, and the industry is generally recognised to be a competitive and speculative one. He believes that every person involved in the film industry is aware of all these matters.[6]Mr Hedman continues that the position in March 2006 was that the Company had the backing of Seven Arts to make the film. To the best of his knowledge, Seven Arts was then and remains solvent. Seven Arts and Mr Hoffman had seen the script, agreed with Mr Hedman that it was good enough to be filmed and had seen the planned budget. Mr Hedman says he therefore had every expectation that with Seven Arts’ financial backing the film would be made. Further, Mr Hedman elaborates that he thought that Seven Arts’ financial backing was sufficiently reliable that he was taking a commercially sensible step in making the film and that Seven Arts would support it. By that he does not suggest that the Company could necessarily have gone to court for an order to require Seven Arts to provide funds. He simply does not know whether that is the case or not, and he frankly accepts that in March 2006, he never contemplated the possibility. Nevertheless, it was, says Mr Hedman, his view at that time that the Company had the full support of Seven Arts for finance. It is also Mr Hedman’s evidence that Seven Arts and Mr Hoffman definitely wanted the film to be made, knew what it would likely cost to make it, had the ability to supply and raise that amount of finance and were prepared to make that level of commercial investment. The question of what the Company would have done if Seven Arts did not want to proceed did not arise, because Seven Arts did want to proceed.[7]In addition to the funding provided and to be provided by Seven Arts, Mr Hedman understood that, for the Company to produce the film, it had to receive a significant body of funding (amounting to some 15 to 20% of its budget) that qualified for low-budget film tax relief under s.48 of the Finance (No. 2) Act of 1997. Mr Hedman also understood that this funding, though provided by independent investors, was being arranged and channelled through Seven Arts. Importantly, Mr Hedman knew that for the Company to qualify under s.48, it had to begin what is known as “principal photography” of the film by 31 March 2006 and it had to complete the film by 31 December 2006. Principal photography was scheduled to begin in Namibia on 31 March 2006.

Preparations and contractual commitment

[8]Next I must consider the preparations which the Company undertook to make the film, the contractual commitments the Company entered into with One Step Beyond and the efforts made by the Company to secure the services of its preferred principal actor, Mr Olivier Martinez. Mr Hedman explains in his witness statements and I must accept for the purposes of this application that, from mid-February 2006, One Step Beyond had been actively involved in providing production services to allow principal photography to begin in Namibia on the scheduled date. More specifically, Mr Hedman says in paragraph 8 of his first witness statement that there had been problems to overcome in securing the appropriate personnel for the crew, reaching agreements and having s.48 finance in place, but nothing that he considered to be out of the ordinary in making a film and, when the go ahead to start the Namibia shoot was given on 21 March 2006, everyone involved - and by this I understand him to include himself - thought that these difficulties had been resolved. The majority of the cast and crew arrived on the site according to plan around two days before filming was due to start on 31 March 2006, and filming did in fact start on that day. Not only, he says, did he, Mr Hedman, expect the film to start and be completed in accordance with the prepared schedule, but everyone else in the project did so too. In the ordinary course of affairs, barring exceptional or unforeseen accidents, that is exactly what would have happened. 9. In the meantime, on 24 March 2006, Mr Hedman caused the Company to enter into a production services agreement (the “PSA”) with One Step Beyond. Clause 5 included the following significant financial commitment:
“5. REMUNERATION 5.1 In consideration for the services set forth in this Agreement, the Company shall pay OSB [One Step Beyond], over and above any reasonable and customary disbursements and costs incurred in connection with the production of the Picture, a Production Services fee in the amount of R825 000.00 (Eight Hundred and Twenty Five Thousand Rand), payable as follows: 75% of this fee, to wit, R618 750.00 will be paid as per the following schedule, with the balance (25% of the total amount of R825 000) payable on a Pari Passu basis with all other parties. Initial payments schedule of the 75% would thus be: 5.1.1 30% (thirty percent) upon execution of this Agreement; and prior commencement of Principal Photography on Location 5.1.2 30% (thirty percent) upon commencement of Principal Photography on Location; 5.1.3 35% (thirty five percent) upon completion of Principal Photography on Location; and 5.1.4 5% (five percent) upon completion of any audit relating to the services provided by OSB. 5.2 Payment shall be made by way of electronic transfer or deposited into an account designated on the invoices submitted by OSB in writing. Payment shall be considered to have been effected when the Company has provided proof of payment to the satisfaction of OSB. 5.3 All costs (unless otherwise indicated) incurred in connection with this Agreement and the facilitation of the Picture by OSB for the duration of this Agreement will be the responsibility of the Company and will be funded by the Company, provided said costs have been approved by the Company with such approval not to be unreasonably withheld. 5.4 The Company shall provide sufficient cash flow in advance in order to meet such costs. In the event that any such costs are not cash flowed by the Company, OSB shall not be responsible for any third parties and shall be fully indemnified in terms of clause 14 below. In addition, the Company shall pay the funds into the Production Account in a timely manner and OSB will only draw against sufficient funds being made available. In this regard the Company acknowledges that any funds due to the production account need to be confirmed by exchange control authorities and that transfers of such funds may take in excess of 7 (seven) days. In the unlikely event that OSB cash-flows any such costs, it will be reimbursed by the Company with 30 (thirty) days, failing which OSB shall be entitled to claim such costs from any VAT recoupment it may obtain on behalf of the Company in terms of clause 4.4.”
Importantly, a substantial sum became payable on 24 March 2006, and a like sum became payable on the commencement of principal photography on 31 March 2006. Initial payments schedule of the 75% would thus be: 5.1.1 30% (thirty percent) upon execution of this Agreement; and prior commencement of Principal Photography on Location 5.1.2 30% (thirty percent) upon commencement of Principal Photography on Location; 5.1.3 35% (thirty five percent) upon completion of Principal Photography on Location; and 5.1.4 5% (five percent) upon completion of any audit relating to the services provided by OSB.[10]As for the engagement of a principal actor, Mr Hedman was well aware that the Company had not signed a contract with Mr Martinez. However, the applicant contends that the position was a good deal worse, that negotiations with Mr Martinez had broken down and that by 24 March 2006, Mr Hedman knew that Mr Martinez was not planning to travel to Namibia for the shoot at all.[11]Mr Hedman vigorously disputes these contentions. He says that he had reached agreement in principle with Mr Martinez through his agent, though he accepts there was no signed contract. He considered that Mr Martinez had been “booked” for the Namibia shoot, that he believed Mr Martinez had given a verbal commitment to Mr Waller to attend and that this commitment was confirmed by his agent to Mr Hoffman. Further, he understood that Mr Waller was in daily contact with Mr Martinez, and that Mr Hoffman was in regular contact with his agent. As far as Mr Hedman was concerned, Mr Martinez was due to attend in Namibia on 30 March 2006, and it was only on that day that he learnt that Mr Martinez had changed his mind and no longer wished to be involved with the production. This, he suspected, might have been connected with problems in Mr Martinez’s personal life, because at that time he was, says Mr Hedman, in a long-term romantic relationship with the singer Kylie Minogue and she was undergoing treatment for breast cancer. Accordingly, Mr Hedman says, the assumption that from 23 or 24 March 2006 he knew that Mr Martinez would not attend in Namibia for the commencement of principal photography is incorrect. He did not speak to Mr Martinez or his agent personally and the first time it was communicated to Mr Hedman that Mr Martinez did not wish to be involved with the film was on 30 March 2006. As I have said, principal photography did start on 31 March 2006 but, in the absence of Mr Martinez, it was aborted soon thereafter.[12]Mr Hedman explains what happened thereafter in paragraphs 11 and 12 of his first witness statement. In summary, it was his understanding that the filming would nevertheless count as the start of principal photography provided the Company could restart filming with substantially the same crew after a short break. In the event, the Company was not able to replace the lead actor within a reasonable time and was not able to retain several important members of the crew. The prospect of the initial filming counting as principal photography accordingly declined, and similarly, the chance of completing a film of commercial quality by 31 December 2006 gradually diminished, eventually to the point of impossibility. Mr Hedman is not able to give a precise date before which the project remained viable, but after which it was not. Up to the end of May 2006, he still hoped to complete the film. In June 2006 it was not impossible, but he considered it would have been difficult. But by the end of the summer of 2006, the prospects of success had become very remote. Legal framework[13]The principles to be applied on a summary judgment application are well established and have conveniently been drawn together by Lewison J in Pegasus Management Holdings SCA v. Ernst & Young [2002] EWHC 2720 at [42]: “42. …: i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91; ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8]; iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman; iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]; v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63. i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91; ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8]; iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman; iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]; v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63.[14]Turning to liability under s.214 of the Act, this reads, so far as relevant:
“(1) Subject to subsection (3) below, if in the course of the winding up of a company it appears that subsection (2) of this section applies in relation to a person who is or has been a director of the company, the court, on the application of the liquidator, may declare that that person is to be liable to make such contribution (if any) to the company's assets as the court thinks proper. (2) This subsection applies in relation to a person if - (a) the company has gone into insolvent liquidation, (b) at some time before the commencement of the winding up of the company, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation, and (c) that person was a director of the company at that time; but the court shall not make a declaration under this section in any case where the time mentioned in paragraph (b) above was before 28th April 1986. …… (4) For the purposes of subsection (2) and (3), the facts which a director of a company ought to know or ascertain, the conclusions which he ought to reach and the steps which he ought to take are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both - (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and (b) the general knowledge, skill and experience that that director has. (5) The reference in subsection (4) to the functions carried out in relation to a company by a director of the company includes any functions which he does not carry out but which have been entrusted to him. (6) For the purposes of this section a company goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.”
[15]A number of points arise from this provision which are of particular importance in the context of the present application. First, it must be established that the company in issue has gone into insolvent liquidation, that is to say, it went into liquidation at a time when its assets were insufficient for the payment of its debts and other liabilities and the expenses of the winding up. This has a bearing upon Mr Hedman’s fallback defence to this application, as I shall explain. Second, a date must be identified for the purposes of subsection (2). In the present application that date is 24 March 2006. Third, the requirement of subsection (2)(b) is satisfied if the applicant establishes that, as of that date, the director knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation. As for the latter, a director is expected to have provided himself with adequate accounting information to monitor the solvency of the company, and the standard to be applied in considering what conclusion a director should have drawn is that of a reasonably prudent businessman acting without unwarranted optimism and on a realistic factual basis. Discussion[16]Mr Castle, who appears on behalf of the applicant, submits that as at 24 March 2006, Mr Hedman knew or should have known that there was no reasonable prospect of the Company avoiding an insolvent winding up and that from that day forward its business was being carried on at the risk of creditors. Specifically, he submits that by 24 March 2006, Mr Hedman knew the Company had no assets, had no secure financing in place, had not signed a leading actor (and was unlikely to be able to do so in the near future) and needed s.48 funding, and for that purpose to begin principal photography by 31 March 2006 (which was itself a vain hope), with the result that Mr Hedman knew or ought to have known that the Company would be unable to produce the film and would in consequence be unable to pay its debts. Yet Mr Hedman went ahead and procured the Company to enter into the PSA with One Step Beyond.[17]As I have indicated, Mr Hedman does not dispute a number of these propositions. In particular, he accepts that the Company had no funds of its own, that there is no evidence that the Company ever had a legally enforceable agreement with Seven Arts, that he did not consider the question whether he could compel Seven Arts to provide funding, that he knew the Company needed s.48 funding and that he knew that the Company had not signed Mr Martinez. But he vigorously disputes that by 24 March 2006, he knew or ought to have known there was no reasonable prospect that the Company would avoid going into insolvent liquidation.[18]In my judgment this position derives support from a number of matters which have been developed on his behalf by Mr Stancliffe. First, I have evidence before me as to the background and nature of the film industry. This suggests that it is unusual for a film company to begin its activities with sufficient funds of its own to make a film. Further, it is, according to Mr Hedman, a feature of this industry that production often proceeds on the basis of verbal arrangements and understandings with actors on the one hand and with organisations providing finance and production facilities and services on the other. This is Mr Hedman’s evidence and it is consistent with the facts that One Step Beyond provided production services from mid-February 2006 and Seven Arts paid US$120,000 directly to One Step Beyond, in each case without any contractual obligation to do so.[19]Second, I have already related the substance of Mr Hedman’s evidence that he expected Seven Arts to provide finance both from the organisation’s own resources and through third party schemes, such as those formed to take advantage of s.48 tax benefits, irrespective of whether it was contractually bound to do so. Moreover, Mr Hedman says Seven Arts wanted the film to be made. Both these matters are it seems to me, supported by the payment by Seven Arts to One Step Beyond of the US$120,000 to which I have referred. There would have been no purpose or value in making this payment if Seven Arts did not intend to continue to support the project and see it through to completion if reasonably possible. There is one further matter which also sheds light on the interests of Seven Arts and which I should mention. It is common ground that since the liquidation of the Company, the Second Respondent, Gone to Hell, a company connected with Seven Arts, has indeed made the film and that film was financed by Seven Arts.[20]Third, it is an important part of the applicant’s case that securing the services of a lead actor was essential to the commencement of principal photography, that on 24 March 2006 Mr Hedman was fully conscious that he had not signed Mr Martinez and that he knew that Mr Martinez was getting “cold feet.” Accordingly, Mr Castle submits, it was reckless in the extreme to sign the agreement with One Step Beyond.[21]As I have said, Mr Hedman’s evidence is that he had reached an agreement in principle with Mr Martinez, that he considered that Mr Martinez had been “booked” for the Namibia shoot and that Mr Martinez had given a verbal commitment to Mr Waller to attend. I also have in evidence before me a body of email correspondence from Mr Waller in the period 22 to 28 March 2006 and a letter from him dated 30 May 2006. The salient points emerging from these communications are these: on 22 March 2006, Mr Waller emailed Mr Hedman and Mr Hoffman informing them of anxieties expressed by Mr Martinez in the course of a conversation which had apparently taken place that morning. The email concluded that after “some passionate exchanges” Mr Martinez agreed to call his agent and instruct him to accept a fee of US$850,000, with US$250,000 to be paid up front and US$600,000 at intervals thereafter. Over the following days Mr Waller sent further emails to Mr Hedman and Mr Hoffman detailing preparations for the shoot in Namibia, but until Mr Waller arrived in Namibia on 28 March 2006, at which point the email communictions stopped, there is no suggestion that the proposed shoot would have to be abandoned because Mr Martinez would not be appearing.[22]Against that background I come to the letter of 30 May 2006, which was described by Mr Waller as a way of, “recapping on various concerns of mine with Olivier Martinez leading up to his sudden departure from our movie”. After relating the substance of the email of 22 March 2006, he continued:
“Happy that all this had been agreed upon, I emailed you and Peter recapping our conversation, and prepared to board a flight to Namibia. A day later I heard back from Olivier’s Agent via Peter H, that he was not happy that I had spoken directly to “his client” and that the deal would not be done as Olivier and I had agreed it. The following week in Namibia leading up to the shoot, I had daily conversations with Olivier during which he was saying how reluctant he was to go against his agent and manager’s advice, but that the moment they were okay with the offer, he would jump on a plane to the set. Being in Paris at the time, that would have been possible within 24 hours of giving him notice. In the meantime, Peter was trying to make ground with his agent, by proving that the offer was “real”
. It wasn’t until the morning of the 30th March 2006 that I heard from Olivier himself that he was not going to do the film. Whether Olivier was hiding behind his agent and manager the whole time because he was too embarrassed I can’t be sure, but I suspect as much. In any case, as a consequence we had to break off the shoot just one day into principal photography on 31st March.” This letter is, I think, broadly supportive of Mr Hedman’s position that it was Mr Waller who was dealing with Mr Martinez and that Mr Martinez had expressed a desire to be involved with the film. However, it also suggests that on or about 23 March 2006 Mr Martinez’s agent indicated to Mr Waller the deal would not be done as agreed. Nevertheless, Mr Waller does not appear to have been deterred and daily conversations with Mr Martinez ensued to try and resolve the position, which conversations proceeded in parallel with efforts by Mr Hoffman to negotiate a solution with Mr Martinez’s agent. What the letter does not contain is any suggestion that Mr Waller told Mr Hedman of the difficulties he was having before 30 March 2006 and, as I have said, there is no hint of those difficulties in the daily email correspondence that passed between them.[23]It is obviously not possible to resolve on a summary judgment application precisely what occurred over this critical period. Nor is it possible to ascertain the state of mind of all the participants to these communications. However, I am clear that I am not in a position to reject Mr Hedman’s clear evidence that he understood that he had an agreement in principle with Mr Martinez and that it was not until 30 March 2006 that he knew Mr Martinez would not attend the film shoot. Nor am I in a position to reject his evidence that on 24 March 2006 he believed the project had the full backing of Seven Arts and that principal photography could begin on 31 March 2006 and proceed to completion.[24]In my judgment it follows from the foregoing that I cannot say on the materials before me that Mr Hedman knew or ought to have known on 24 March 2006 that there was no reasonable prospect that the Company would avoid going into insolvent liquidation. Resolution of this claim requires a fuller investigation of the facts than is possible on a summary judgment application and I am satisfied that there are reasonable grounds for supposing that such a fuller investigation of the facts could add to or alter the evidence available at the trial and so alter the outcome of the case. Certainly at this stage I consider Mr Hedman has a realistic, which is to say a more than merely arguable, prospect of success.[25]In the circumstances I can deal with the fallback submission advanced by Mr Stancliffe very shortly. It runs as follows. The application is brought within a wider Part 8 claim in which the applicant asserts that at the time of the winding up, indeed at all material times from January 2006 to the present day, the Company had as its asset the right to make the film and that it never transferred that asset to any other person. The price put on the One Picture Licence granting those rights was US$1.5m. The revenues from the film, which is yet to be released, are also said to belong to the Company. That claim has not been determined. It necessarily follows, the argument continues, that the claim for wrongful trading is strictly an alternative to the applicant’s other claim. If, as the applicant contends, it turns out to be the case that the Company does have an asset, the film right, which ultimately proves sufficient to meet its debts and the costs of the winding up, then the Company will be found not to have gone into insolvent liquidation and no claim for wrongful trading can lie against Mr Hedman.[26]In my judgment, the problem with this submission is that it is plain on the face of s.214 of the Act that the question whether a company has gone into insolvent liquidation must be determined as at the date of the liquidation. At that time no film had been made and I think there is considerable force in Mr Castle’s submission that the licence was of doubtful, if any, value. In the event, however, I do not need to decide this point and prefer not to express a final conclusion upon it because, for the reasons I have given, this application must be dismissed.