White v Davenham Trust Ltd

White v Davenham Trust Ltd

The existence of security over the principal debtor's assets does not entitle a guarantor to have a statutory demand set aside under rule 6.5(4)(d); the co-extensiveness principle does not apply to rule 6.5(4)(c). The creditor is entitled to proceed against the guarantor for the undisputed debt, regardless of security held over the principal debtor's assets.

Parties
Claimant/appellant: Mark Eugene White; Defendant/respondent: Davenham Trust Ltd
Jurisdiction
England and Wales
Judgment Date
28 June 2011
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Statutory Demand, Personal Guarantee, Secured and Unsecured Creditors, Bankruptcy Proceedings, Co Extensiveness Principle
Insolvency Law Bankruptcy Guarantees Statutory Demand Personal Guarantee Secured and Unsecured Creditors Bankruptcy Proceedings Co Extensiveness Principle

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Parties

Mark Eugene White

Claimant/appellant

Davenham Trust Ltd

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether the existence of security held by the creditor over the principal debtor's assets precludes the creditor from serving a statutory demand on the guarantor under rule 6.5(4)(d) of the Insolvency Rules 1986
  2. 2 Whether the principle of co-extensiveness applies to rule 6.5(4)(c) as it does to rules 6.5(4)(a) and (b)

Ratio Decidendi

The existence of security over the principal debtor's assets does not entitle a guarantor to have a statutory demand set aside under rule 6.5(4)(d); the co-extensiveness principle does not apply to rule 6.5(4)(c). The creditor is entitled to proceed against the guarantor for the undisputed debt, regardless of security held over the principal debtor's assets.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed.