“The court may annul a bankruptcy order if it at any time appears to the court— (a) that, on any grounds existing at the time the order was made, the order ought not to have been made”
“A petition for a bankruptcy order to be made against an individual may be presented to the court in accordance with the following provisions of this Part – (a) by one of the individual’s creditors or jointly by more than one of them”
“[45] …I should remind myself of what I am and am not doing. A debtor who challenges the making of a bankruptcy order against him on the basis that he disputes the relevant debt alleged by the creditor puts in his written evidence and the bankruptcy court decides whether or not on that evidence there is a real prospect of the debtor making out the alleged defence. If there is, its resolution is not a matter for this court but should be a matter for ordinary civil proceedings in which there will be disclosure and in due course, unless there is an application for summary judgment, a trial. [46] In the case of an application under s 282(1), which necessarily follows after the bankruptcy order has been made, it is the bankrupt who is applying to establish in the bankruptcy court that for example under s 282(1)(a) the bankruptcy order ought not to have been made on grounds existing at the time the order was made. In context it appears to me that the court hearing the application of the debtor for annulment must be satisfied as to those grounds on the balance of probability. It may not be enough in my view for a debtor to say at the time of an application for annulment: ‘I had an arguable defence to a given case’. He should be saying: ‘I did not in fact owe the money for this or that reason,’ and it is for that reason that he now seeks the annulment of the order.”
“[19] Ms Clarke submits that the test as stated in Flett is to be preferred. She points out that in Guinan the parties were agreed as to the test and therefore the court did not have the benefit of argument on the point. She says that Everard (which was relied upon by Neuberger J) was dealing with a narrower point, namely, whether the test to be applied on an application to set aside a statutory demand was different to that applied to an opposed petition in circumstances where the rules and practice directions stipulated the stage at which certain disputes needed to be raised. She also pointed out that, where a debtor seeks to annul on grounds that a petition debt is disputed, the debtor relies upon grounds that could and should have been raised at the petition stage. So, she says, it is legitimate to place the onus upon an applicant to establish that the debt is not owed and to impose a more stringent test than would have applied in the event that the applicant had responded in a timely fashion. She reinforced this latter point in her oral submissions by reminding me that an order operated against the world and that this was another reason for the more stringent test because to annul it could prejudice third parties who had acted on the order. Also, she pointed out that under s 282(1)(a) the application to annul could be made ‘at any time’ and that actual experience showed that this could be many years after the bankruptcy order when the order had been acted upon. So, again, it was appropriate to impose a more stringent test. [20] In contrast, Mr Flower submitted that I should adopt the approach of Neuberger J in Guinan. He pointed out that Guinan was not cited in Flett. Also, he submitted that the facts of Flett were significantly different as they concerned a statutory assessment by HMRC which the court could not go behind. And, in any event, it was questionable whether what Mr Elleray said in para 46 actually went as far as Ms Clarke contended. [21] For the reasons set out below, I consider that I should adopt the approach taken by Neuberger J in Guinan. [22] First, while it does appear that the point was not argued by the parties in Guinan, so far as I can see the same applies to Flett. Secondly, neither Guinan nor Everard is referred to in the judgment of Mr Elleray QC. Thirdly, the decision of Neuberger J drew on the reasoning of Laddie J in Everard. While I accept that Everard concerned a narrower point, it seems to me that what Laddie J said in that case in para [60] was sound in principle and applies equally to the issue before me. He said ‘there is every reason why the height of the hurdle the debtor has to negotiate should be substantially the same at whichever stage he mounts his challenge’ and there is ‘no reason why the debtor’s challenge should have to reach a different level of substantiality when he challenges the debt … at the petition stage’. I respectfully agree. Fourthly, I agree with Mr Flower that what Mr Elleray QC says is ambiguous. Mr Elleray said ‘It may not be enough … for a debtor to say at the time of an application for an annulment: I had an arguable defence …’ I have added the emphasis because, as Mr Flower argued, Mr Elleray seems not to have been entirely sure of the position. Fifthly, the application of different tests to the different stages could, as Mr Flower argued, produce strange results. This case illustrates that very point in that the application of different tests to the same basic issue might lead to Mr Payne succeeding in setting aside the statutory demand, but Mrs Payne failing to set aside the bankruptcy order. [23] As to Ms Clarke’s points about the order operating against the world and the effect of the passage of time, in the case of an application to annul the court has a discretion in that ‘The Court may annul …’. If the passage of time or the operation of the order against third parties was shown in a particular case to have caused the sort of practical problems which Ms Clarke referred to in her oral argument, then that is a matter which I expect that the court would bear in mind in exercising its discretion and which might incline the court against making an order.”
“(1) A bankruptcy petition may be presented to the court under section 264(1)(a) only if— (a) the centre of the debtor’s main interests is in England and Wales… (4) In this section, references to the centre of the debtor’s main interests have the same meaning as in Article 3 of the EU Regulation.”
“1. This Regulation shall apply to public collective proceedings, including interim proceedings, which are based on laws relating to insolvency and in which, for the purpose of rescue, adjustment of debt, reorganisation or liquidation: … The proceedings referred to in this paragraph are listed in Annex A.”
“International jurisdiction 1. The courts of the Member State within the territory of which the centre of the debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings (‘main insolvency proceedings’). The centre of main interests shall be the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties. … In the case of an individual exercising an independent business or professional activity, the centre of main interests shall be presumed to be that individual’s principal place of business in the absence of proof to the contrary. That presumption shall only apply if the individual’s principal place of business has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings. In the case of any other individual, the centre of main interests shall be presumed to be the place of the individual’s habitual residence in the absence of proof to the contrary. This presumption shall only apply if the habitual residence has not been moved to another Member State within the 6-month period prior to the request for the opening of insolvency proceedings.”
“(1) A creditor’s petition must be in respect of one or more debts owed by the debtor, and the petitioning creditor or each of the petitioning creditors must be a person to whom the debt or (as the case may be) at least one of the debts is owed. (2) Subject to the next three sections, a creditor’s petition may be presented to the court in respect of a debt or debts only if, at the time the petition is presented— … (b) the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, either immediately or at some certain, future time, and is unsecured…”
“[38] I find this case very difficult, because there can be no doubt whatever that if one had to decide who one believes on the evidence currently available and a decision had to be made now, one would (essentially for the reasons identified in the district judge’s judgment and summarised very clearly and helpfully by Mr De La Rosa) say that Mr Guinan was much less likely to be believed than Mr Caldwell. All the factors I have identified point in that direction. However, our system works on the basis that where there is a serious issue of fact to be tried, particularly where that issue involves whether or not there was an agreement reached on the telephone on a certain date and whether the agreement was intended to have legal consequences that were binding, that unless there is no real prospect of one person’s evidence being believed or accepted, the matter has to go to cross-examination (and disclosure), and to shut out one party from being able to cross-examine the other party and himself being cross-examined would, unless the court is satisfied there is no real prospect of his case being accepted, be unjust and inconsistent with our notions of justice… [48] I often find myself in a position where I have a fairly strong view as to who is telling the truth, but that strong view, based on documentation and witness statements, may turn out to be wrong. In those circumstances, the court does find itself in an unhappy position in one sense, because it puts the party who is likely to be right (Mr Caldwell) at the disadvantageous position in this sort of case of having to issue proceedings and pursue the claim, in circumstances where he is likely to win, and the court is therefore tempted (as I think the district judge was) to cut the Gordian knot at this stage. On the other hand, one’s assessment of the likely outcome based on documents, where the issue is purely one of what was said on the telephone and possibly at a later meeting, may turn out to be wrong. The fact that the person who may actually have been rather dishonestly treated is going to leave court disappointed and find himself at the risk of incurring substantial delay and financial expenditure, is a result one regrets. But on the other hand, the law says that if there is any doubt as to whether a man who may well be dishonest is telling the truth or not, then he is entitled to disclosure and to cross-examination, and that is what he would be denied if the court confirms the bankruptcy order in a case such as this. I am afraid from Mr Caldwell’s point of view this is that sort of case, and Mr Guinan’s rights have to prevail over Mr Caldwell’s reasonable expectations.”
“I have been informed that if I fail to surrender to custody I may commit an offence and be fined, imprisoned, or both; that if I fail to comply with any of the conditions set out above, I may be arrested; and that if I wish to vary any of the conditions I may apply to either the police station or court specified, stating my reasons”
“On18 November 2018 Mr Mast and I were arrested in Bermuda – in simple terms the allegations centred around an apparent missing USD 20 million. What followed was that between November 2018 and February 2019, I managed to demonstrate USD 20 million was not missing with it then being suggested that USD 5 million was missing which was later reduced by the Bermudan Crown Prosecution to USD 600,000. I presume that those making these allegations will be able to explain their actions once they make all documents available. At present I am unable to comment further.”
“8.4.8… Delta Lloyd defended itself by claiming I had worked for free; the transactions were all a coincidence, and the consultancy agreements were forgeries. The lawyer representing Lioncross in the matter, Mr. Pieter Van der Korst of Lemstra Van der Korst advised (in which advice legal professional privilege is not waived) Mr Scicluna, the director of Lioncross, and myself that the position taken by Delta Lloyd was ridiculous and that no Dutch court would ever accept the position of Delta Lloyd. Hence, Lioncross did not respond to the positions taken by Delta. 8.4.9 This resulted in a judgment dated14 November 2018 , communicated on17 November 2018 , where the position of Delta Lloyd was accepted as Lioncross had not commented on it. That claim is now subject to an appeal by Lioncross which is to be further considered on9 December 2021 .”
“the Director of the company knew or should have known that the input tax claim regarding the purchase of the property was linked to the fraudulent claim to input tax made by [Marsh Wall Jersey] to offset the output tax collected when it sold the property to [Marsh Wall UK]”
“The first time that I became aware of the Bankruptcy Order was on or about (I am not entirely sure)16 December 2020 when my lawyer I.J.K. (Ilse) van der Meer of Van Dijk Van Der Meer Advocaten called me at the prison at Zwolle and informed me that my wife, Barbara Eyckmans (Barbara) had become aware of the Bankruptcy Order. I was completely in shock and could not understand how this was possible.”
“Orca, they provided like the trust services to St George’s. There was like this computer system that we had that managed like all of the insurance policies. It used to do compliance and a lot of things related to that and that is what Orca would manage. That was what they would do mostly and then on the side they would also – it was like a private family office, so, you know, the logistics of – the logistics of how basically it would run”
“Almost everything. I think almost everything, admin-wise, yes. The programming for the system as well and it was all online. When I say ‘online’, it was like we were running off servers”
“The debtor is justly and truly indebted to us in the aggregate sum of£601,323.76 being payments made for the benefit of the debtor from the petitioner’s bank accounts in respect of the debtor’s personal American Express bills (denominated in Euros) in at least the sum of€361,899.73 and payments made for the benefit of the debtor from the petitioner’s bank accounts in respect of rental of a property for the use of the debtor at Flat 3, 9A Curzon Street, London W1J 5HQ in the sum of£276,750.01 . The petitioner is entitled to the repayment by the debtor of the said sums of€361,899.73 (equivalent to£324,573.75 as at5 June 2020 being the date of the statutory demand at the rate of€1.115 to the Pound Sterling) and£276,750.01 amounting in total to£601,323.76 which were utilised by the debtor for his and his family’s benefit and not for the benefit of the petitioner.”
“What was finally decided upon, resulting in the Consultancy Agreement was for Orca UK to pay the American Express balance with corporate control procedure and for Orca UK to set off payment of the personal costs against [Brazz]’s fees thereby eliminating the risk for Orca UK that it would not be repaid for my personal costs. Separately, [Brazz] to invoice Orca UK for the services whereby the payment is reduced with my personal costs. Instead of [Brazz] repaying a part of the outstanding debt to me, the debt is cancelled for an amount equal to my personal costs. As a result, [Brazz] obtains the same position without any cash flows.”
“5.1. In consideration for the Services, the Company shall pay to the Consultant for the Services rendered a base fee of EUR 1.500,- (one thousand five hunderd euro) per day increased with to the extent that travel required seperates the Consultant for more than two days from his family, an additional fee of EUR 1.500,- (one thousand five hunderd euro) per day. (the “Servicing Fee”). 5.2. Travel time from the offices of the Consultant to the office of the Company, any Subsidiary thereof and their respective related clients will be included in the time that is charged. The Company agrees to pay any travel and accomodation expenses related to the family of the Consultant in relation to any travel required for the Services, subject to a maximum cost of EUR 1.500,- (one thousand five hunderd euro) per day. 5.2 The Consultant will be entitled to use a personal credit card (the Consultant Card) for travel, transport, accommodation expenses and other expenses incurred to travel to and during his presence at the office of the Company, any Subsidiary thereof and their respective related clients (the “Business Expenses”) including any related meetings. 5.3. The Company and Orca UK agrees that Orca UK will on a monthly basis pay the total balance rendered on the Consultant Card. (the “Consultant Expenses”) when requested by the Consultant. 5.4. The Consultant will send an invoice indicating the Invoice Amount to Orca UK. The Invoice Amount is the sum of the Servicing Fee and the Business Expenses reduced with the Consultant Expenses. The fee will be invoiced and paid on a monthly basis, the VAT is payable upon the issuance of the invoice. 5.5. To the extent possible, the Consultant will use property that is owned by the Company in order to minimise hotel costs. In such a case, the Company indemnifies the Consultant or any representative thereof for any and all related tax consequences of the use of such property. 5.6. All taxable remuneration paid to the Consultant shall be in gross amounts, without deduction of withholding tax, and the Consultant shall be solely responsible for registering with the VAT authorities and paying all taxes and social security contributions required under Belgium law or the laws of any other governmental body (and for filing the necessary forms and returns in that regard).”
“Payment will occur via set-off of company current balance of EUR 18,000 and a transfer of EUR 75,000 to our account.”
“Payment will occur via set-off in relation to American Express payments between1st September 2017 and30th March 2018 based on the agreement between Les Petit Fourmies, Orca Finance UK and Brazz Services for an amount of EUR 186,743.68 and an increase of EUR 14,000 in our favour into our current account.”
“Payment will occur via set-off in relation to American Express payments between1st April 2018 and30th March 2019 based on the agreement between Les Petit Fourmies, Orca Finance UK and Brazz Services for an amount of EUR 207,182.05 and a transfer of EUR 14,000 to your account.”
“(1) A creditor’s petition must be in respect of one or more debts owed by the debtor, and the petitioning creditor or each of the petitioning creditors must be a person to whom the debt or (as the case may be) at least one of the debts is owed. (2) Subject to the next three sections, a creditor’s petition may be presented to the court in respect of a debt or debts only if, at the time the petition is presented— … (b) the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, either immediately or at some certain, future time, and is unsecured”
“To be liquidated the sum of money has to be ‘a specific amount which has been fully and finally ascertained’. If a debt is subject to an account or a claim for damages it will not be liquidated: section 383 of the Act and see generally Personal Insolvency: Law and Practice fifth Edition at 8.35-8.39”“ To like effect is the statement in Law of Insolvency (5th Ed), at paragraph 6-047: “The decisive hallmark of a liquidated claim is that the process of quantification is already complete and there is an absence of any element of ‘penalty’ to be imposed over and above the actual loss sustained.”
“The point Mr Rainey makes is that a creditor’s petition can only be based on a debt for a liquidated sum (see s 267 of the Act). If there is no such debt then the court has no jurisdiction to make a bankruptcy order. He submits that there is no such debt in this case. The company’s claim is that the debtor stole the money. The debtor disputes that but, assuming the company is right, what is its cause of action to recover the money? Mr Rainey submits, and I did not understand Miss Bristoll to disagree, that the alternatives, in descending order of likelihood, are: (i) a claim for money had and received; (ii) a claim against the debtor as a constructive trustee; (iii) a claim in deceit; (iv) a claim for breach of an implied term in his contract of employment; and, (v) money paid under a mistake of fact. Mr Rainey submits, and I agree, that claims (iii) and (iv) are claims for damages and cannot be claims for a liquidated sum. He also submits that claims (i), (ii) and (v) are claims for an account and payment and cannot be claims for a liquidated sum either. I have no difficulty in accepting that claim (ii) can only be one for an account and payment. Mr Rainey did not show me any authority expressly demonstrating the proposition that claim (v) is also such a claim but I am prepared to accept that he is correct; and, in any event, I regard it as highly improbable that the company would so formulate its claim against the debtor. As to claims for money had and received the decision of the Court of Appeal in Portman Building Society v Hamlyn Taylor Neck (a Firm)[1998] 4 All ER 202 affirms that the remedy for such a claim is an account and payment. Millett LJ said at p 205d: ‘By its writ the society maintains a number of alternative causes of action. It claims damages for breach of contract, the tort of negligence or breach of trust; compensation for breach of fiduciary duty; or repayment of moneys had or received to the use of the society. It is to be observed that, with the exception of the last, all are claims to recover monetary compensation for loss in consequence of a wrong alleged to have been committed by the firm. The last claim, however, is a straightforward claim in quasi-contract for money had and received or, as we would now call it, restitution. As counsel for the society acknowledged, the remedy for such a claim is not damages but an account and payment.’ Mr Rainey submits that it follows that none of the company’s claims for a remedy is in the nature of an order for payment of a liquidated sum. It is irrelevant that the company claims to be able to identify its claim down to the last penny. It is still faced with the difficulty that its range of alternative claims against the debtor are claims for damages or for an account and payment. A claim for damages is not a claim for a liquidated sum; and nor is a claim whose remedy is that of an account, even though it may be that the taking of the account so ordered could be dealt with in a summary way and a judgment there and then given for a specific sum. I accept that submission. I agree with Mr Rainey that the petition is not based on a debt for a liquidated sum. It follows that in my judgment no bankruptcy order could properly be made on it. I will therefore not merely discharge that order. I will also dismiss the petition.”
“167. It is often said that the primary remedy for breach of trust or fiduciary duty is an order for an account, but this is an abbreviated and potentially misleading statement of the true position. In the first place an account is not a remedy for wrong… 168. In the second place an order for an account does not in itself provide the plaintiff with a remedy; it is merely the first step in a process which enables him to identify and quantify any deficit in the trust fund and seek the appropriate means by which it may be made good… Where the defendant is ordered to make good the deficit by the payment of money, the award is sometimes described as the payment of equitable compensation; but it is not compensation for loss but restitutionary or restorative. … 172. At every stage the plaintiff can elect whether or not to seek a further account or inquiry. The amount of any unauthorised disbursement is often established by evidence at the trial, so that the plaintiff does not need an account but can ask for an award of the appropriate amount of compensation. Or he may be content with a monetary award rather than attempt to follow or trace the money, in which case he will not ask for an inquiry as to what has become of the trust property. In short, he may elect not to call for an account or further inquiry if it is unnecessary or unlikely to be fruitful, though the court will always have the last word.”
“Most of the claims are, quite obviously, claims for compensation for damage to his business and, therefore, are in the nature of claims for damages, which are obviously not claims for payment of a liquidated sum.”
“The claim in respect of the£60,000 cash might be thought to be different, but, as it seems to me, the claim for that would be a claim for money had and received, or, as it is more popularly known nowadays, a claim for restitution. So it is a claim for an account and payment and not a claim in debt, and it makes no difference that the claim can be calculated down to the last penny. I had occasion to consider points such as this in my decision in Hope v. Premierpace (Europe) Ltd[1999] BPIR 695 , at 699. I expressed the view in that case that a claim for an account and payment was not one for debt which could form the subject of a statutory demand. I have no reason to depart in this case from the view I expressed in that one. Again, however, I have not heard from Miss Markham on that point, and it is not necessary for the purposes of the disposition of this appeal.”
“36. In my judgment whether a sum is liquidated and whether there is a defence to the claim are separate issues and the first must be determined before the second is addressed. Accordingly any admission, acknowledgment or agreement converting the amount claimed from an unliquidated to a liquidated sum must be one from which the client has bound himself not to resile. A mere acknowledgment would be insufficient to bind him to forego judicial assessment or determination. 37. On this basis it was not possible to say that any part of the work done by Mr Truex had been quantified, or was quantifiable by the bankruptcy court as a mere matter of arithmetic. It seems to me that the chief registrar conflated the issue of whether there was a genuine dispute about a liquidated debt with that of whether the sum claimed was liquidated in the first place. The bill as a whole was capable of challenge as to quantum, was thus for an unliquidated sum and did not fulfil the requirement of section 267. The same point applies to the chief registrar’s alternative finding that there could not be a genuine dispute as to at least£750 of the costs.”
“23… It was a liquidated sum within the meaning of section 267(2)(b) of the Act. It is therefore unnecessary for me to decide whether, as Ms Start submitted, I should depart from the decision in Hope v Premierpace (Europe) Ltd[1999] BPIR 695 . None the less, and in case the issue should arise again, I will make the following observations about it. 24 The first is that it does seem remarkable that a person from whom£1,000 has simply been stolen should be unable to present a bankruptcy petition (following a statutory demand), whereas a person with a£1,000 contract debt may do so, always assuming that there is not a bona fide defence to either claim on reasonable grounds. As Proudman J said in Truex v Toll[2009] 1 WLR 2121 , 2129, the question whether a sum is liquidated and whether there is a defence of the claim are entirely separate issues. 25 Secondly, I have real doubt whether distinctions based on different causes of action (ie debt, account and payment, damages) satisfactorily address the purpose behind section 267(2)(b) of the Act, which seems to me to distinguish between cases where there is no issue as to the amount of a liability, and cases where some process of assessment by the court is necessary, before the amount can be identified. I can well understand that a claim for an account which depends upon the defendant providing disclosure as to the amount of an alleged secret profit cannot possibly be a claim for a liquidated sum. By contrast, a claim to recover stolen money, where the precise amount stolen is known by the claimant, seems to me in principle to be a claim for a liquidated sum, even though the form of action is one for account and payment.”
“[36] These authorities indicate and I think establish that a debt for a liquidated sum must be a pre-ascertained liability under the agreement which gives rise to it. This can include a contractual liability where the amount due is to be ascertained in accordance with a contractual formula or contractual machinery which, when operated, will produce a figure. Ex parte Ward is the obvious example of that. Claims in tort are invariably unliquidated because they require the assistance of a judicial process to ascertain the amount due by way of damages. In some cases the calculation of the award will be straightforward and obvious but the unliquidated nature of the claim excludes it from being a good petitioning creditor’s debt which satisfies the requirements of s 267 of the 1986 Act. [37] The most obvious use of the term ‘liquidated’ has been in relation to liquidated damages. ‘Liquidated’ has been defined judicially as meaning the sum which the parties have by their contract assessed as the damages to be paid for its breach: see Wallis v Smith (1882) 21 ChD 243, at 267, per Cotton LJ. If a genuine pre-estimate of loss the provision is enforceable according to its terms. I would therefore regard a claim for liquidated damages as one for a liquidated sum within the meaning of s 267 of the 1986 Act unless a claim in damages is excluded by the use of the word ‘debt’. [38] Another familiar context in which the word ‘liquidated’ appeared was RSC Ord 13 which governed when a plaintiff could enter final judgment against a defendant who failed to give notice of intention to defend. Final judgment could only be entered when the writ was endorsed with a claim for a liquidated demand: see RSC Ord 13, r 1. Claims in debt or for liquidated damages fell within this rule but it did not include claims in tort where the damages were necessarily unliquidated or those for contractual damages where the measure of liability was not specified in the contract itself. [39] The authorities in the field of bankruptcy as to what constitutes a liquidated sum are consistent with this approach. In Re Broadhurst the measure of liability under the contract was readily calculable but that did not make it a liquidated claim. As Maule J put it in his judgment, there was no specific sum engaged to be paid to the creditor.”
“A claim for restitution on the ground of unjust enrichment is not a claim for damages or equitable compensation founded on the commission of a civil wrong, but a claim for a liquidated sum that is treated as a claim in debt for procedural purposes. This is true not only of claims for the value of a money payment, but also of claims for the value of services or goods which must be quantified before the court can make an order against the defendant.”
“the unjust enrichment claim has procedural and evidential advantages in that it is a liquidated claim”
“45. As to categories b. (excluding c.) and d., the claims are also to specified sums, but rather as money had and received, or in old fashioned terms for indebitatus assumpsit, rather than as compensation for wrongs committed. In the prayer, the Claimant asks for ‘restitution of all sums which the Defendant has received or is deemed to have received and by which he is unjustly enriched’. The wording in the Claim Form is more or less the same. 46. As Farwell LJ made clear in the citation from Lagos v Grunwaldt[1910] 1 KB 41 , above, many of the different causes of action now subsumed within the theory of unjust enrichment/restitution were historically grouped under the old heading indebitatus assumpsit. A cause of action which gave rise to what was called an indebitatus assumpsit, if proved, resulted in a judgment for a money sum, and similarly therefore, in the case of a default judgment. Many of these causes of action were pleaded as ‘money had and received to the use of the plaintiff’ or ‘money paid at the request of the defendant’. 47. In my judgment, if before the development of the unified theory of restitution a particular cause of action would have justified a default judgment for a sum of money rather than a judgment for damages to be assessed, it should and does not cease to justify that judgment merely because a group of academic lawyers (and, to a more limited extent, judges) have regrouped such claims under the banner of a different theory, namely unjust enrichment, which may include claims which have to be assessed. That would be the worst kind of academic interventionism. Litigants’ rights and remedies must not depend on the state of academic discourse from day to day. And any cause of action giving rise to a liquidated demand under the RSC will now give rise to a claim for ‘a specified amount of money’, because this expression is at least as wide, and probably wider.”
“The point chiefly argued below seems to have been that Harvey, Brand & Co.’s claim against the company was a claim for unliquidated damages. But they bought from the company and paid for 7000 barrels at 3s. 6d. each; there was a short delivery, and they have a claim against the company of 3s. 6d. for each of the barrels which the company failed to deliver. As to those barrels there was a total failure of consideration, and Harvey, Brand & Co. had a liquidated claim for money had and received, and had before the appointment of the receiver an inchoate right of set-off.”
“18. Equitable subrogation is a remedy available to give effect to a proprietary right or in some cases to a cause of action. This is not a case where subrogation is invoked to give effect to a proprietary right. It belongs to an established category of cases in which the claimant discharges the defendant’s debt on the basis of some agreement or expectation of benefit which fails. The rule was stated by Walton J in Burston Finance Ltd v Speirway Ltd[1974] 1 WLR 1648 , 1652: “[Where] A’s money is used to pay off the claim of B, who is a secured creditor, A is entitled to be regarded in equity as having had an assignment to him of B’s rights as a secured creditor … It finds one of its chief uses in the situation where one person advances money on the understanding that he is to have certain security for the money he has advanced, and, for one reason or another, he does not receive the promised security. In such a case he is nevertheless to be subrogated to the rights of any other person who at the relevant time had any security over the same property and whose debts have been discharged, in whole or in part, by the money so provided by him …”
“It is important to remember that … subrogation is not a right or a cause of action but an equitable remedy against a party who would otherwise be unjustly enriched. It is a means by which the court regulates the legal relationships between a plaintiff and a defendant or defendants in order to prevent unjust enrichment. When judges say that the charge is ‘kept alive’ for the benefit of the plaintiff, what they mean is that his legal relations with a defendant who would otherwise be unjustly enriched are regulated as if the benefit of the charge had been assigned to him. It does not by any means follow that the plaintiff must for all purposes be treated as an actual assignee of the benefit of the charge and, in particular, that he would be so treated in relation to someone who would not be unjustly enriched.”
“31. Two things, however, are clear. The first is that the role of the law of unjust enrichment in such cases is to characterise the resultant enrichment of the defendant as unjust, because the absence of the stipulated benefit disrupted a relevant expectation about the transaction under which the money was paid. The second is that the role of equitable subrogation is to replicate as far as possible that element of the transaction whose absence made it defective. This is why subrogation cannot be allowed to confer a greater benefit on the claimants than he has bargained for: see Paul v Speirway Ltd[1976] Ch 220 , 232 (Oliver J), the Banque Financière case[1999] 1 AC 221 , 236–237 (Lord Hoffmann) and Cheltenham & Gloucester plc v Appleyard[2004] EWCA Civ 291 at [38], [41]–[42] (Neuberger LJ). It can be seen that the fact that all the cases relate to defective transactions is not just an adventitious feature of the disputes that happen to have come before the courts. It is fundamental to the principle on which they were decided.”
“24. In answering the question, both parties followed the approach adopted by Lord Steyn in Banque Financière de la Cité v Parc (Battersea) Ltd[1999] 1 AC 221 , 227, and asked: (a) Has the defendant been benefited, in the sense of being enriched? (b) Was the enrichment at the claimant’s expense? (c) Was the enrichment unjust? (d) Are there any defences?”
“A different type of situation is typified by the case where the claimant discharges a debt owed by the defendant to a third party. Although it is the third party creditor who receives the payment from the claimant, the defendant is directly enriched, since the payment discharges his debt: the enrichment is not the payment which the third party receives, but the discharge which the defendant receives. Where the transfer of value is defective, and the enrichment is consequently unjust, the law reverses it, as far as possible, by subrogating the claimant to the rights formerly held by the third party (as was explained, for example, by Walton J in Burston Finance Ltd v Speirway Ltd[1974] 1 WLR 164 , 1652). There are many variations on the type of situation where equitable subrogation is an appropriate remedy to reverse or prevent unjust enrichment. The remedy differs from restitution, in that it does not have the effect of restoring the parties to their pre-transfer positions, but it is the most practicable means of reversing or preventing unjust enrichment in the types of situation where it is appropriate.” “[Where] A’s money is used to pay off the claim of B, who is a secured creditor, A is entitled to be regarded in equity as having had an assignment to him of B’s rights as a secured creditor … It finds one of its chief uses in the situation where one person advances money on the understanding that he is to have certain security for the money he has advanced, and, for one reason or another, he does not receive the promised security. In such a case he is nevertheless to be subrogated to the rights of any other person who at the relevant time had any security over the same property and whose debts have been discharged, in whole or in part, by the money so provided by him …”
“35 It does seem to me that none of the COMI cases have taken into account the jurisprudence which I have been shown of the general law that where the Court makes an order without jurisdiction any person who might be affected by that order is entitled to have that order set aside as of right. An order made without jurisdiction, at any rate by the High Court being a court of unlimited jurisdiction in one sense, is an order which, as Lord Diplock explained in the case referred to in Munks v Munks, has to be complied with even if it was one that should not have been made. If it is good on its face, it must be treated as a valid order until it has been set aside. That is a very important and salutary principle which plays a significant role in the enforcement of orders. Any other rule would inevitably mean that those who did not want to comply with orders would argue that they did not have to because, although they were valid on their face, they were defective in one way or another. Once it has become apparent, according to Sir Roger Ormrod in Munks v Munks – and I have already said that I have seen nothing to suggest that this is not still good law – once the court’s attention is brought to the fact that the order was made without jurisdiction, there is no alternative but to set it aside. That seems to me to be a general principle of English procedural law that would apply to insolvency proceedings just as much as to any other proceedings, and that, in the absence of section 282, the Court would nevertheless be obliged to set aside a bankruptcy order, on being satisfied that the Court did have no jurisdiction to make the order in the first place.”
“36 The real question, it seems to me, is whether the express enactment of a discretionary power to annul in section 282 can be taken as taking away the default position under which, if an order is made without jurisdiction, the Court has no alternative but to set it aside and any person who might be affected by such an order is entitled as of right to have it set aside. I do not see that that is the purpose of section 282. It does confer a discretion but the discretion is exercisable in many more situations than in the particular situation where the Court has no jurisdiction because the jurisdiction is ousted by Article 3 of the Insolvency Regulation, as imported into section 265 by (3). 37. It follows, in my judgment, that the fact that Article 4 refers to the national rules as to the effect of insolvency proceedings does not mean, as the Registrar was persuaded, that there is always a discretion. What it means is that the position in relation to the setting aside or annulment of bankruptcy petitions is the same as it would be in any other case in which an order was made without jurisdiction. I am persuaded by Miss Meech that, although in other circumstances section 282 confers a true discretion, in a case in which the bankruptcy order was made without any jurisdiction at all, the logic of Munks v Munks dictates that the Court has no choice but to set the order aside.”
“[84]… I find that the bankruptcy order was made without jurisdiction because Dr Leitzbach’s centre of main interests was not in England and Wales. Following the approach of Nugee J in the Meyden case, the court should annul the bankruptcy order. Insofar as there is any discretion, however, I would unhesitatingly exercise that discretion in favour of annulment. I am satisfied that Dr Leitzbach has not presented a true picture to the court, either now or in 2014; even on his own case, he did not tell the court that he was registered as a dentist in Luxembourg, or that he was undertaking a course of dental study in Germany and Austria. However, in addition, he produced receipts intended to give a false impression as to his presence in England and Wales at times when I am satisfied that he was not present here but was in Germany and Luxembourg, attending his course and attending an interview to be registered as a dentist in Luxembourg. None of that was disclosed to the court on the hearing of his bankruptcy petition. Indeed, on his second petition, he did not even disclose the existence of his first petition.”
“It follows, as night follows day, that the effect of Article 3 of the Insolvency Regulation, and section 265(3) of the Insolvency Act is that the English court did not have jurisdiction to open insolvency proceedings, and therefore the bankruptcy order was made without jurisdiction.”
“It is common ground that even if it is established that there was no valid service and/or that the debt is disputed, the court still has a discretion whether or not to annul. That concession seems to be clearly right in light of the wording and in particular the word ‘may’ ins 282(1) of the Insolvency Act 1986 , and any doubt on the point must be put to rest, as [Counsel for Caldwell] rightly says, by the decision of the Court of Appeal, albeit on an application for permission to appeal, in Askew v Peter Dominic Ltd[1997] BPIR 160 . Indeed, in that case the statutory demand and bankruptcy petition had been described by His Honour Judge Roger Cook as ‘sheer nonsense’ – see at 164E – a view which does not seem to have been dissented from by Millet LJ, and yet because the bankrupt ‘did not dispute the debt’ – see at 164H – His Honour Judge Cook did not set aside the bankruptcy order.”
“As I have mentioned, there is a discretion even if there is an arguable case, but it seems to me that unless there are special circumstances such as other creditors who have undoubted debts, or clear other evidence of insolvency, or facts such as were before the Court of Appeal in Askew v Peter Dominic Ltd[1997] BPIR 163 , namely that the debt in question was not challenged, then it seems to me, save in exceptional circumstances, that it must be right not to uphold a bankruptcy order.”
“[T]he word ‘may’ in [IA 1986 s.282] makes clear that the court’s power to annul, even if the grounds are made out, is discretionary. The court is not bound to set aside the petition, particularly if … the creditor is found to have acted reasonably and the debtor has failed to raise defences which were open to him at an earlier stage. In such a case, a critical factor in exercising the discretion … must be the prospects, if the order is annulled, of the debtor being able to satisfy the petitioner and meet his other liabilities.”
“The power to annul under section 282 is discretionary (“the court may annul”). Thus, even if the court is satisfied that on the grounds existing at the date of the bankruptcy order, the order ought not to have been made, the court can still decide not to annul the order. An obvious example would be where the annulment would be pointless, for example, where the circumstances were such that a new bankruptcy order would certainly be made. Another example would be where circumstances had changed following the bankruptcy order making it inappropriate to annul the order. It follows that when considering whether to exercise its discretion to annul an order which it has found ought not to have been made the court will take into account all relevant matters, including matters which have come about after the bankruptcy order was made.”
“In the light of the statutory scheme, it seems to me that where the petition debt is fully disputed such that there is no debt capable of founding the petition and no court could made a bankruptcy order (as in the COMI cases cited to me), there is a powerful argument that the court would have no discretion on an annulment application. However, I consider that I am prevented from reaching that conclusion by the Court of Appeal’s decision in Owo-Samson. Even where there was no debt capable of founding the petition, if a bankruptcy order is nonetheless made the court retains a discretion when hearing an annulment application.”
“[81] In my view, and although the discretion to do so is broadly stated, it is only in exceptional circumstances that it is right to decline to grant an annulment if it is demonstrated that a dispute as to the petition debt was genuine and on substantial grounds, and thus could not properly be the basis of an order of bankruptcy on that petition, so that the bankruptcy order ought not to have been made: and see per Neuberger J in Guinan III v Caldwell Associates Ltd [above] at para [49]. [82] However, there is no doubt that even in such circumstances, the court is not only not bound to exercise its discretion by annulling the bankruptcy order, but is always concerned to be satisfied that by making an annulment order it would not be acting to the detriment of other creditors with undoubted debts, or for no good purpose (for example, because there is clear other evidence of insolvency). Askew v Peter Dominic Ltd [above] provides confirmation of this, and an example; so does Re Coney (A Bankrupt)[1998] BPIR 333 , ChD. [83] Thus, the fact that I have reached a different conclusion than did the deputy district judge on the principal issues as to whether the conditions of s 282(1)(a) are satisfied, the question which she addressed in her final alternative way of determining the matter and in case she was wrong as to the validity of the petition debt … is substantially the same: whether the interests of creditors or the entitlement of the [trustee in bankruptcy] to payment of his proper costs and expenses outweigh the obvious logic in setting aside an order which should not have been made.”
“In my judgment, the proper way in which to understand Hildyard J’s decision – not least given his reference to Guinan III – is not simply that there is an exceptional circumstances test per se but rather that the test requires the court to identify other factors which would suggest that the annulment should be refused; only in their absence would it be exceptional not to grant an annulment. This is another way of saying that all the relevant circumstances have to be taken into account and is also consistent with the Court of Appeal’s decision in Owo-Samson which I have already considered.”
“In conclusion, as I read these authorities and on the basis that the court has a discretion to exercise when asked to annul a bankruptcy order which should never have been made because the debt stated in the debt was disputed in full, there is no principle that the discretion must be exercised in favour of annulment unless there are exceptional circumstances. Rather, in the exercise of its discretion, the court must consider all the relevant factors. Where there are factors weighing in favour of and against annulment, it must take them into account, giving them appropriate weight. Where there are no factors weighing against annulment, then it might be expected that the court will annul the bankruptcy order.”