Bridger & Co Limited v Specialist Lending Limited (t/a Duologi)
[2023] EWHC 2562 (Ch)
IPS Law LLP v Safe Harbour Equity Distressed Debt Fund 3 LP
25 October 2024
[2024] EWHC 2663 (Ch)
High Court
A law firm tried to stop a debt collector from advertising a bankruptcy petition, claiming they'd been promised the debt wouldn't be collected and that they were owed much more money. The judge didn't believe the promises and said the law firm didn't have a strong enough case to prove they were owed the extra money, so the bankruptcy petition could proceed.
Key Facts
- •IPS Law LLP (IPS) sought to restrain Safe Harbour Equity Distressed Debt Fund 3 LP (Respondent) from advertising a winding-up petition.
- •The petition debt was £500,000, stemming from a loan made under a facility agreement.
- •IPS contested the petition on grounds of assurances that the agreement wouldn't be enforced (promissory estoppel, estoppel by convention, collateral contract) and crossclaims exceeding the debt.
- •IPS claimed entitlement to a share of damages from 'Project Red Card' (Personal Data Claims) and alleged the Respondent induced a breach of contract, interfered with a solicitor's lien, and breached confidence.
- •No Personal Data Claims had been issued at the time of the hearing.
- •IPS's arguments were raised late in the proceedings.
Legal Principles
The court will restrain advertisement of a winding-up petition where the debt is disputed on genuine and substantial grounds.
Angel Group Ltd v British Gas Trading Ltd [2012] EWHC 2702 (Ch) at [22]
A dispute is not 'substantial' if it has no rational prospect of success.
Re A Company No.0012209 [1992] 1WLR 351 at 354B
The court considers evidence in detail to determine if a genuine dispute exists, similar to a summary judgment application.
Re A Company No.006685 [1997] BCC 830 at 837B
The court considers the reliability of evidence to judge whether a substantial allegation is made, not just a series of hopeless allegations.
Portsmouth v Alldays Franchising Ltd [2005] EWHC 1006 (Ch) at [12]
Extensive and complex evidence should not mask the absence of an arguable defence.
Re Richbell Strategic Holdings Ltd [1997] 2 BCLC 429
Promissory estoppel requires a clear and unequivocal promise, intended to affect legal relations, acted upon by the other party to their detriment.
Snell’s Equity, 34th edition at §12-018 and Harvey v Dunbar Assets plc [2017] EWCA Civ 60
Estoppel by convention requires parties acting on a common assumption of facts or law.
Republic of India v India Steamship Co Ltd [1998] AC 878
A collateral contract requires a statement intended to have contractual effect, inducing entry into the main contract.
Hughes v Pendragon Sabre Ltd [2016] EWCA Civ 18
Insolvency proceedings may be an abuse of process if the petitioner's aim is not genuine liquidation or acts outside the class interest of creditors.
Maud v Aabar Block SarL [2015] EWHC 1626 (Ch)
Outcomes
The application to restrain advertisement of the winding-up petition was dismissed.
IPS's grounds of opposition were not substantial and lacked a rational prospect of success. The alleged assurances were not unequivocal, and the crossclaims lacked merit due to the absence of a binding contract entitling IPS to a share of 'Project Red Card' damages.
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