White v Davenham Trust Ltd [2011] EWCA Civ 747 (28 June 2011)

White v Davenham Trust Ltd [2011] EWCA Civ 747 (28 June 2011)

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) by analogy with rule 6.5(4)(c); rule 6.5(4)(c) is concerned only with security over the debtor's own assets, and the co-extensiveness principle does not extend to this situation. The creditor is entitled to proceed against the guarantor for the undisputed debt regardless of security held over the principal debtor's assets.

Citation
[2011] EWCA Civ 747
Parties
Claimant Appellant: Mark Eugene White; Defendant Respondent: Davenham Trust Ltd
Jurisdiction
England and Wales
Judgment Date
28 June 2011
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal dismissed
Legal Topics
Statutory Demand, Bankruptcy Proceedings, Personal Guarantee, Secured Creditor, Third Party Security, Co Extensiveness Principle, Insolvency Rules 1986, Insolvency Act 1986
Insolvency Bankruptcy Guarantees Statutory Demand Bankruptcy Proceedings Personal Guarantee Secured Creditor Third Party Security +3 more

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Parties

Mark Eugene White

Claimant Appellant

Davenham Trust Ltd

Defendant Respondent

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Whether the existence of security given by the principal debtor affects the creditor's ability to serve a statutory demand on a guarantor under rule 6.5(4)(d) of the Insolvency Rules 1986
  2. 2 Whether the co-extensiveness principle applies to rule 6.5(4)(c) as it does to (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) by analogy with rule 6.5(4)(c); rule 6.5(4)(c) is concerned only with security over the debtor's own assets, and the co-extensiveness principle does not extend to this situation. 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 by Mark Eugene White is dismissed.