Lendinvest BTL Limited v Property Services LDN Limited
[2023] EWHC 1778 (Ch)
Morrison Water Services Limited v William David Browning
31 October 2023
[2023] EWHC 2725 (Ch)
High Court
A former employee tried to force his old company into bankruptcy over money he claimed he was owed. The company showed a contract that meant the employee shouldn't get the money. The judge sided with the company and made the employee pay the company's legal fees.
Key Facts
- •Morrison Water Services Ltd (MWS) applied to restrain William David Browning from winding up MWS due to a disputed debt.
- •Browning served a statutory demand on MWS for £51,537, later amended to £43,705.
- •The debt comprised a bonus, expenses, mileage, and alleged tax overpayments.
- •Browning and MWS had a Settlement Agreement following Browning's redundancy.
- •MWS argued the Settlement Agreement precluded Browning's claims.
Legal Principles
A creditor's petition can only be presented by a creditor; a substantial dispute over the debt challenges standing.
Angel Group v British Gas [2012] EWHC 2702
The threshold for establishing a substantially disputed debt is low, even if a summary judgment defence might be considered 'shadowy'.
Tallington Lakes Ltd v South Kesteven District Council [2012] EWCA Civ 443
Without prejudice material is inadmissible in these circumstances.
Rush & Tompkins Ltd v GLC [1989] AC 1280
Winding-up petitions are not for resolving genuinely disputed debt claims.
Breyer Group Ltd v RBK Engineering Ltd [2017] EWHC 1206 (Ch)
The general rule is that the unsuccessful party pays the costs of the successful party.
CPR Part 44, particularly CPR 44.2
Outcomes
MWS's application to restrain Browning was successful.
MWS presented substantial grounds to dispute the debt based on the Settlement Agreement, which Browning accepted as binding. The claims were deemed unsuitable for resolution through insolvency proceedings.
Browning must pay MWS's costs, summarily assessed at £2,550 within 28 days.
Browning initiated the proceedings by serving the statutory demand, and MWS had to take action to protect its interests. Clause 8.2 of the Settlement Agreement did not preclude a costs order in these circumstances.