Capital Funding One Ltd v King Street Bridging Ltd & Ors [2017] EWHC 3567 (Ch) (07 December 2017)

Capital Funding One Ltd v King Street Bridging Ltd & Ors [2017] EWHC 3567 (Ch) (07 December 2017)

There was no express agreement as to the terms of repayment between CF1 and KSB. On the evidence and the commercial context, the court found that the obligation to repay was on a 'Pay When Paid' basis, i.e., KSB was to be repaid only when CF1 was itself repaid by its borrower. As no payment was due from CF1 to KSB...

Source-derived case information.

Citation
[2017] EWHC 3567 (Ch)
Parties
Applicant: Capital Funding One Ltd; First Respondent: King Street Bridging Ltd; Second Respondent (joint Administrator): Paul Robert Boyle; Third Respondent (joint Administrator): Thomas Bowes
Jurisdiction
England and Wales
Judgment Date
07 December 2017
Procedural Posture
Insolvency Application / Final Substantive Hearing
Outcome
Application granted
Legal Topics
Appointment of Administrators, Debenture Enforcement, Implied Contractual Terms, Pay When Paid Clauses
Insolvency Contract Appointment of Administrators Debenture Enforcement Implied Contractual Terms Pay When Paid Clauses

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Parties

Capital Funding One Ltd

Applicant

King Street Bridging Ltd

First Respondent

Paul Robert Boyle

Second Respondent (joint Administrator)

Thomas Bowes

Third Respondent (joint Administrator)

Procedural Posture

Insolvency Application / Final Substantive Hearing

Legal Issues

  1. 1 Whether the appointment of administrators by the debenture holder was valid
  2. 2 Whether the obligation to repay was subject to a 'Pay When Paid' arrangement
  3. 3 Whether insolvency constituted an event of default under the debenture

Ratio Decidendi

There was no express agreement as to the terms of repayment between CF1 and KSB. On the evidence and the commercial context, the court found that the obligation to repay was on a 'Pay When Paid' basis, i.e., KSB was to be repaid only when CF1 was itself repaid by its borrower. As no payment was due from CF1 to KSB at the time of the purported appointment, there was no event of default and the appointment of administrators was invalid.

Court Disposition

Application granted

Orders

  • Declaration that the joint administrators were not validly appointed
  • No order as to alternative ground of insolvency