A woman's company was ordered to be shut down due to a debt owed to her ex-husband's company. She argued the money wasn't a loan but support payments. The court agreed, canceling the shutdown order because the nature of the money was unclear and should be decided in the divorce case.
Key Facts
- •Appeal against a winding-up order made against Regal 38I83 Ltd (the Company).
- •Appellant is the former owner of the Company; Respondent is the former husband, owner of the petitioning creditor DBCG (UK) Ltd.
- •Debt claimed: £27,000 in loans from DBCG to the Company.
- •Company never traded; last filed accounts showed net assets of £1.
- •Appellant disputes the nature of the payments, claiming they were maintenance payments, not loans.
- •Appellant claims improper service of court documents.
- •County Court judgment against the Company mentioned in the petition, but details unavailable.
- •Ongoing divorce proceedings and Family Court proceedings between Appellant and Respondent.
- •HHJ Gibbons' fact-finding judgment referenced, indicating Respondent's controlling behavior causing financial stress.
Legal Principles
Discretion to make a winding-up order will not be exercised where the debt is bona fide disputed.
Insolvency Act 1986 s.125; Botleigh Grange Hotels Ltd v Revenue and Customs Commissioners [2018] EWCA Civ. 1033 at para. [8]
Outcomes
Appeal allowed; winding-up order set aside.
Sufficient dispute existed regarding the nature of the debt (loans vs. maintenance payments). The wider context, including the ongoing divorce proceedings and the Family Court findings, was not considered by the lower court. The court found the lower court exercised its discretion wrongly.
Appellant awarded costs (£550 court fees + £304 allowance).
Appropriate given the outcome of the appeal and the modest sums involved.