Power v Godfrey

Power v Godfrey

Mr Power's default judgment against Mr Godfrey constituted a bona fide cross-claim on substantial grounds, exceeding the petition debt, and there was no pending application to set aside the judgment. The Deputy Registrar erred by disregarding the effect of the default judgment and failing to consider the requirement of promptness in any application to set it aside. Accordingly, the bankruptcy order was set aside and the petition dismissed.

Parties
Applicant/claimant: Lawrence Power; Respondent/defendant: Godfrey
Jurisdiction
England and Wales
Judgment Date
05 December 2013
Procedural Posture
Bankruptcy Appeal / Appeal From Bankruptcy Order
Outcome
Appeal allowed; bankruptcy petition dismissed
Legal Topics
Bankruptcy Petition, Default Judgment, Cross Claim, Set Off, Permission to Appeal
Insolvency Civil Procedure Bankruptcy Petition Default Judgment Cross Claim Set Off Permission to Appeal

Case Brief

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Parties

Lawrence Power

Applicant/claimant

Godfrey

Respondent/defendant

Procedural Posture

Bankruptcy Appeal / Appeal From Bankruptcy Order

Legal Issues

  1. 1 Whether the existence of a default judgment in favour of the debtor constitutes a bona fide cross-claim sufficient to defeat a bankruptcy petition
  2. 2 Whether the Deputy Registrar erred in making a bankruptcy order despite the default judgment
  3. 3 Whether permission to appeal should be granted out of time

Ratio Decidendi

Mr Power's default judgment against Mr Godfrey constituted a bona fide cross-claim on substantial grounds, exceeding the petition debt, and there was no pending application to set aside the judgment. The Deputy Registrar erred by disregarding the effect of the default judgment and failing to consider the requirement of promptness in any application to set it aside. Accordingly, the bankruptcy order was set aside and the petition dismissed.

Court Disposition

Appeal allowed; bankruptcy petition dismissed

Orders

  • Permission to appeal granted
  • Bankruptcy order set aside