Fagg v Rushton [2007] EWHC 657 (Ch) (22 February 2007)

Fagg v Rushton [2007] EWHC 657 (Ch) (22 February 2007)

Security held over company property, which reduces the guarantor's liability, is to be treated as security for the purposes of section 383(2) Insolvency Act 1986 and rule 6.5(iv)(c) Insolvency Rules 1986; therefore, the statutory demand was properly set aside as the debt was fully secured.

Citation
[2007] EWHC 657 (Ch)
Parties
Claimant/appellant: Alan Stephen Fagg; Defendant/respondent: Robert Francis Rushton
Jurisdiction
England and Wales
Judgment Date
22 February 2007
Procedural Posture
Appeal / Judgment on Appeal From Order Setting Aside Statutory Demand
Outcome
Appeal dismissed; costs order below varied; costs of appeal awarded to respondent.
Legal Topics
Statutory Demand, Secured Debt, Guarantee Liability, Costs Order
Insolvency Bankruptcy Civil Procedure Statutory Demand Secured Debt Guarantee Liability Costs Order

Case Brief

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Parties

Alan Stephen Fagg

Claimant/appellant

Robert Francis Rushton

Defendant/respondent

Procedural Posture

Appeal / Judgment on Appeal From Order Setting Aside Statutory Demand

Legal Issues

  1. 1 Whether security held over company property counts as security for the guarantor's debt under section 383(2) Insolvency Act 1986
  2. 2 Whether the statutory demand should be set aside under rule 6.5(iv) Insolvency Rules 1986
  3. 3 Appropriate order as to costs after partial payment

Ratio Decidendi

Security held over company property, which reduces the guarantor's liability, is to be treated as security for the purposes of section 383(2) Insolvency Act 1986 and rule 6.5(iv)(c) Insolvency Rules 1986; therefore, the statutory demand was properly set aside as the debt was fully secured.

Court Disposition

Appeal dismissed; costs order below varied; costs of appeal awarded to respondent.

Orders

  • Order of Deputy District Judge Austin affirmed as to setting aside statutory demand.
  • Order for costs below varied: claimant to receive half his costs below, otherwise no order.