Insolvency - 1960- 1969

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This page lists 9 cases, and was prepared on 28 October 2012.

Cotterill -v- Price [1960] 1 WLR 1907
1960	Insolvency, Limitation	Casemap 1 Citers
	A statute-barred debt cannot be proved in bankruptcy.

Cottrell -v- Price [1960] 1 WLR 1097
1960 Buckley J	Insolvency, Limitation	Casemap 1 Cites 1 Citers
	The rights of a secured creditor against his security were held to be rights "outside the bankruptcy". As to the case of Benzon: "The importance of that case and of the way in which the doctrine is stated in the judgment of the Court is that it makes it clear that it is only "in the bankruptcy" that the statute ceases to operate. It does not have any effect on the operation of the statute on any rights or remedies which are unaffected by the bankruptcy."

In re United Railways of the Havana and Regla Warehouses Ltd [1960] Ch 52
1960 CA Jenkins LJ	Contract, Banking, Insolvency	Casemap 1 Cites 1 Citers
	There had been a financing transaction by way of a lease by a Pennsylvania corporation, as trustee for foreign bondholders, to an English company carrying on business in Cuba, of assets in Cuba. By a Cuban decree the assets were transferred to the Cuban government and the company was put into liquidation in England. The liquidators rejected a proof by the trustees for the payments due under the lease on the ground that the Cuban decree had transferred liability to the Cuban government. The court did not accept that the decree had this effect, but, for argument considered whether it would have been effective to discharge the company's liability. This depended on whether one applied the lex situs of the debt (Cuba) or the proper law of the lease (Pennsylvania). Held: The transaction was a statutory novation; the extinction of the liability of one debtor and its replacement by the liability of another. These two aspects of the transaction were not necessarily governed by the same law and that the question of whether the one debtor was discharged was governed by the proper law of the debt. The court rejected an analogy with the question of whether the benefit of a debt had been transferred to another person. "The contractual right to receive payment of a debt is an item of property, that is to say, a chose in action. It can be transferred by the creditor to a third party, but the validity of the transfer necessarily depends upon the lex situs, because the courts of the country where the debt is have jurisdiction over the title to it. Novation, on the other hand, does not involve the transfer of any property at all, for, as we have already pointed out, it comprises the annulment of one debt and the creation of another. Moreover, in novation a creditor may be vitally prejudiced, whereas it is immaterial to a debtor to whom he pays his debt provided that he gets a good discharge for it."

in Re William Hockley Ltd [1962] 1 WLR 555
1962 ChD Pennycuick J	Insolvency, Company
	Pennycuick J said: "The expression ‘contingent creditor’ is not defined in the Companies Act 1948, but it must, I think, denote a person towards whom under an existing obligation, the company may or will become subject to a present liability upon the happening of a future event or at some future date . ."
	Companies Act 1948 224(1)

Independent Automatic Sales Ltd -v- Knowles and Foster [1962] 1 WLR 974; [1962] 3 All ER 27
1962 ChD Buckley J	Company, Insolvency	Casemap 1 Citers
	The company in liquidation had sold machines on hire-purchase. It sued the finance company to recover hire-purchase agreements and other securities which it had charged to secure the repayment of advances. When the finance company relied upon the charge, the plaintiff replied that it was void because it should have been registered as a charge over book debts. Held: If the property subject to a charge is not registered and the property remains after all the costs of the winding up and debts payable in the liquidation have been paid the property will continue to be encumbered even though the charge was not registered at Companies House. A book debt is one which could be properly entered in the books of the company whether in fact entered or not.

Re a Debtor; ex parte Berkshire Finance Co Ltd (1962) 106 Sol Jo 469
2 Jan 1962 QBD Cross J	Insolvency	Casemap 1 Cites 1 Citers
	The court was asked to consider whether a judgment debt in respect of sums due under a hire-purchase agreement was a good petitioning creditor's debt. The judgment sum included the balance of all the remaining hire charges which became payable on the premature determination of the agreement. After the judgment the Campbell Discount case had invalidated the clause as a penalty. Held: Cross J exercised his power to go behind the judgment to hold that the creditor had, on a proper application of the law, no more than a cause of action against the debtor for unliquidated damages.

Fisher v C H T Ltd (No 2) [1966] 2 QB 475
1966 Lord Denning MR	Damages, Insolvency
	Where more than one defendant is liable in damages, the court will make allowance for the insolvency of one when ordering a contribution from the others.

in Re Resinoid and Mica Products Ltd [1982] 3 All ER 677
1967 CA	Company, Insolvency	Casemap 1 Citers
	(From 1967) An order extending time for registration of a charge will not normally be made after a company has gone into liquidation.

Post Office -v- Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363
1967 CA Lord Denning MR, Salmon LJ	Insurance, Insolvency	Casemap 1 Cites 1 Citers
	A contract of insurance provided an indemnity for "all sums which the insured shall become legally liable to pay as compensation in respect of loss of property". The claim was by the Post Office against a contractor, Potters, for damaging one of their cables which in consequence the Post Office had to repair. Before the Post Office had sued Potters, Potters went into liquidation. The Post Office sued the insurance company direct purporting to make use of the 1930 Act, but before the Post Office's claim against Potters had been the subject of adjudication or agreement. Held: A third party claimant could not sue the insurer directly, pursuant to the 1930 Act, until the existence and amount of the liability of the insured had been established by judgment or award or agreement. The reason for this was that the rights transferred by the Act were subject to the terms of the policy. Since the insured could not have claimed an indemnity until their liability had been established, the Post Office could be in no better position. The insurers' argument that the Post Office had no cause of action against the insurers until the establishment of the existence and amount of the liability of the insured was therefore accepted. Though leave was necessary to begin or continue proceedings against a company in liquidation, the court considered that leave ought to be given automatically if the 1930 Act were applicable. Lord Denning MR said: "It seems to me that the insured only acquires a right to sue for the money when the liability to the injured person has been established so as to give rise to a right of indemnity. His liability to the injured person must be ascertained and determined to exist, either by judgment of the court or by award in arbitration or by agreement. Until that is done the right to an indemnity does not arise." The liability must be "ascertained and determined to exist", and that this may be achieved by judgment, arbitration award or agreement: "In these circumstances I think the right to sue for these moneys does not arise until the liability of the wrongdoer is established and the amount ascertained. How is this to be done? If there is an unascertained claim for damages in tort, it cannot be proved in the bankruptcy; nor in the liquidation of the company. But nevertheless the injured person can bring an action against the wrongdoer. " Salmon LJ said that when the liability is established, it dates from the date when the cause of action arose: "The case really resolves itself into this simple question: Could Potters on June 17, 1965, have successfully sued their insurers for the sum of £839 10s 3d which they were denying they were under any obligation to pay the Post Office? Stated in that way, I should have thought the question admits of only one answer. Obviously Potters could not have claimed that money from their insurers. It is quite true that if Potters in the end are shown to have been legally liable for the damage resulting from the accident to the cable, their liability in law dates from the moment when the accident occurred and the damage was suffered. But whether or not there is any legal liability and, if so, the amount due from the Potters to the Post Office can, in my view, only be finally ascertained either by agreement between Potters and the Post Office or by an action or arbitration between Potters and the Post Office. "
	Third Parties (Rights Against Insurers) Act 1930