Capital Funding One Ltd v King Street Bridging Ltd & Ors

Capital Funding One Ltd v King Street Bridging Ltd & Ors

The court found that the obligation to repay KSB arose only when CF1 was repaid by its borrower, based on the parties' mutual understanding and commercial context, and thus the appointment of administrators was invalid as no payment was due under the debenture.

Parties
Applicant: Capital Funding One Ltd; First Respondent: King Street Bridging Ltd; Second Respondent: Paul Robert Boyle; Third Respondent: 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, Implied Contractual Terms, Pay When Paid Arrangements
Insolvency Contract Appointment of Administrators Implied Contractual Terms Pay When Paid Arrangements

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Parties

Capital Funding One Ltd

Applicant

King Street Bridging Ltd

First Respondent

Paul Robert Boyle

Second Respondent

Thomas Bowes

Third Respondent

Procedural Posture

Insolvency Application / Final Substantive Hearing

Legal Issues

  1. 1 Whether the appointment of administrators was valid under the debenture
  2. 2 Whether the loan between KSB and CF1 was subject to a Pay When Paid term
  3. 3 Whether CF1 was insolvent for purposes of the debenture

Ratio Decidendi

The court found that the obligation to repay KSB arose only when CF1 was repaid by its borrower, based on the parties' mutual understanding and commercial context, and thus the appointment of administrators was invalid as no payment was due under the debenture.

Court Disposition

Application granted

Orders

  • Declaration that the appointment of administrators was invalid