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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Signature Living Hotel Ltd v Sulyok & Anor  EWHC 257 (Ch) (09 January 2020)
Cite as:  EWHC 257 (Ch),  Bus LR 588,  WLR(D) 124
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BUSINESS AND PROPERTY COURTS IN LIVERPOOL
INSOLVENCY AND COMPANIES LIST (ChD)
35 Vernon Street, Liverpool L2 2BX
B e f o r e :
Sitting as a Judge of the High Court
| SIGNATURE LIVING HOTEL LIMITED
|- and –
|ANDREI SULYOK ROXANA MONICA COCARLA
2nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.
Telephone No: 020 7067 2900. Fax No: 020 7831 6864 DX 410 LDE
Email: firstname.lastname@example.org Web: www.martenwalshcherer.com
MR MARTIN OUWEHAND (instructed by Baker Skelly LLP) for the Respondents
Crown Copyright ©
JUDGE HODGE QC:
"[Counsel] observed that, although these documents were expressed to be deeds, it was not necessary that they should be. I am not sure that that is correct, at least in the case of the Option Agreement, for which no consideration is given; but, even if it were, the fact remains that the parties intended them to be deeds and their validity must be judged on that basis."
(1) A creditor's petition can only be presented by a creditor, and until a prospective petitioner is established as a creditor he is not entitled to present the petition and has no standing in the Companies Court.
(2) A company may challenge the petitioner's standing as a creditor by advancing in good faith a substantial dispute either as to the entirety of the petition debt, or at least to so much of it as would bring the undisputable part below £750.
(3) A dispute will not be substantial if it really has no rational prospect of success.
(4) A dispute will not be put forward in good faith if the company is merely seeking to take for itself credit which it is not allowed under the contract.
(5) There is thus no rule of practice that the petition will be struck out merely because the company alleges that the debt is disputed. The true rule is that it is not the practice of the Companies Court to allow a winding-up petition to be used for the purpose of deciding a substantial dispute raised on bona fide grounds because the effect of presenting a winding-up petition and advertising that petition is to put upon the company a pressure to pay (rather than to litigate) which is quite different in nature from the effect of an ordinary action.
(6) But the court will not allow this rule of practice itself to work injustice and will be alert to the risk that an unwilling debtor is raising a cloud of objections on affidavit in order to claim that a dispute exists which cannot be determined without cross- examination.
(7) The court will therefore be prepared to consider the evidence in detail even if, in performing that task, the court may be engaged in much the same exercise as would be required of a court facing an application for summary judgment.
"Before presenting a winding-up petition, the creditor must conduct a search to ensure that no petition is pending. Save in exceptional circumstances a second winding-up petition should not be presented whilst a prior petition is pending. A petitioner who presents a petition while another petition is pending does so at risk as to costs."
That, however, is a matter for another day. It is sufficient to say that there is no basis for the grant of injunctive relief on the present applications, which are therefore dismissed.