Key Facts
- •Time GB Group Limited (Applicant) failed to pay £2.37m to Yarwell Mill Country Park Limited (Respondent) by the due date stated in a promissory note.
- •The Respondent served a statutory demand and presented a winding-up petition.
- •The Applicant disputed the debt amount and alleged misconduct by the Respondent's former director, Mr. Crickmore.
- •The Applicant's allegations included interference with financing brokers and disclosure of confidential information.
- •The Applicant filed an application to restrain the presentation and advertisement of the winding-up petition.
- •The Applicant did not serve the application to restrain presentation before the petition was presented.
Legal Principles
The court will restrain a winding-up petition if it's an abuse of process or bound to fail; if the debt is disputed on substantial grounds; or if there's a substantial cross-claim.
Coilcolour v Camtrex [2015] EWHC 3202
The threshold for disputing a debt on substantial grounds is not high, even if a defence would be considered 'shadowy' in a summary judgment.
Tallington Lakes v South Kesteven District Council [2012] EWCA Civ 443
A genuine dispute on substantial grounds is required to restrain a petition based on a disputed debt. The court assesses whether there is substance in the dispute.
Tallington Lakes Ltd v Ancasta International Boat Sales Ltd [2014] BCC 327; Re a Company (No 00685 of 1996) [1997] BCC 830
Restraining advertisement requires evidence of a threatened abuse of process.
James Dolman & Co v Pedley [2004] BCC 504
Advertisement of a winding-up petition serves to notify those entitled to be heard and those who might trade with the company.
In Re a Company (No 007923 of 1994)
A promissory note is a negotiable instrument; a term of good faith is implied into a contract only in limited circumstances, particularly 'relational' contracts.
Bills of Exchange Act 1882, ss. 83, 88, 89; Chitty on Contracts, 34th edition [36-004]; Candey Ltd v Bosheh [2022] 4 WLR 84
The court may reject inherently implausible evidence or evidence contradicted by documents.
Ashworth v Newnote [2007] EWCA Civ 793
Outcomes
The application to strike out or restrain advertisement of the winding-up petition was dismissed.
The Applicant failed to demonstrate genuine substantial grounds for disputing the debt or a genuine arguable cross-claim of sufficient value. The Applicant's allegations of misconduct were unsubstantiated and did not meet the legal threshold for a dispute of substantial grounds. The court found the Applicant's evidence on solvency to be inaccurate and misleading.