Carillion Construction Ltd v Hussain & Anor (Liquidators of Simon Carves Ltd) & Anor (Rev 1) [2013] EWHC 685 (Ch) (27 March 2013)

Carillion Construction Ltd v Hussain & Anor (Liquidators of Simon Carves Ltd) & Anor (Rev 1) [2013] EWHC 685 (Ch) (27 March 2013)

The letters of support did not create enforceable obligations binding on Punj Lloyd Ltd; they were intended only to assist directors and auditors in preparing accounts. There is no evidence of any transaction at undervalue or arrangement releasing PLL from liability. The applicant has no realistic prospect of...

Source-derived case information.

Citation
[2013] EWHC 685 (Ch)
Parties
Applicant: Carillion Construction Ltd; Respondents: Zelf Hussain and Robert Jonathan Hunt; Respondent: Simon Carves Ltd
Jurisdiction
England and Wales
Judgment Date
27 March 2013
Procedural Posture
Application for Leave Under Insolvency Act 1986 S.424(1)(a) / Judgment on Application for Leave
Outcome
Application dismissed
Legal Topics
Transactions at Undervalue, Letters of Support, Liquidation, Section 423 and 424 Insolvency Act, Enforceability of Comfort Letters
Insolvency Company Law Transactions at Undervalue Letters of Support Liquidation Section 423 and 424 Insolvency Act Enforceability of Comfort Letters

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Parties

Carillion Construction Ltd

Applicant

Zelf Hussain and Robert Jonathan Hunt

Respondents

Simon Carves Ltd

Respondent

Procedural Posture

Application for Leave Under Insolvency Act 1986 S.424(1)(a) / Judgment on Application for Leave

Legal Issues

  1. 1 Whether letters of support from parent company created legally enforceable obligations
  2. 2 Whether there was a transaction at undervalue under section 423 Insolvency Act 1986
  3. 3 Whether applicant had realistic prospect of establishing statutory purpose under section 423(3)

Ratio Decidendi

The letters of support did not create enforceable obligations binding on Punj Lloyd Ltd; they were intended only to assist directors and auditors in preparing accounts. There is no evidence of any transaction at undervalue or arrangement releasing PLL from liability. The applicant has no realistic prospect of establishing the statutory purpose required under section 423. Leave to bring proceedings is refused.

Court Disposition

Application dismissed

Orders

  • Leave under section 424(1)(a) of the Insolvency Act 1986 refused
  • No order on section 112 application