Kapoor v National Westminster Bank Plc & Anor [2011] EWCA Civ 1083 (05 October 2011)

Kapoor v National Westminster Bank Plc & Anor [2011] EWCA Civ 1083 (05 October 2011)

An equitable assignee of part of a debt is entitled to vote at a creditors' meeting to approve an IVA where the assignment is undisputed and the assignor consents, but if the assignment is a device to circumvent the statutory exclusion of associates' votes and lacks commercial substance, this constitutes a material...

Source-derived case information.

Citation
[2011] EWCA Civ 1083
Parties
Appellant: Charnesh Kapoor; First Respondent: National Westminster Bank PLC; Second Respondent: Kian Seng Tan
Jurisdiction
England and Wales
Judgment Date
05 October 2011
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal dismissed in substance; partial variation of High Court order.
Legal Topics
Individual Voluntary Arrangements (iva), Assignment of Debt, Material Irregularity, Good Faith in Insolvency Proceedings, Voting Rights of Creditors, Associates in Insolvency, Equitable Assignment
Insolvency Law Bankruptcy Commercial Law Individual Voluntary Arrangements (iva) Assignment of Debt Material Irregularity Good Faith in Insolvency Proceedings Voting Rights of Creditors +2 more

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Parties

Charnesh Kapoor

Appellant

National Westminster Bank PLC

First Respondent

Kian Seng Tan

Second Respondent

Procedural Posture

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

Legal Issues

  1. 1 Whether an equitable assignee of part of a debt is entitled to vote at a creditors' meeting to approve an IVA or whether the assignor retains the voting right.
  2. 2 Whether the assignment of part of a debt to a non-associate for the purpose of influencing the outcome of an IVA creditors' meeting constitutes a 'material irregularity' under Insolvency Act 1986 section 262(1)(b).

Ratio Decidendi

An equitable assignee of part of a debt is entitled to vote at a creditors' meeting to approve an IVA where the assignment is undisputed and the assignor consents, but if the assignment is a device to circumvent the statutory exclusion of associates' votes and lacks commercial substance, this constitutes a material irregularity under Insolvency Act 1986 s.262(1)(b), justifying revocation of the IVA approval.

Court Disposition

Appeal dismissed in substance; partial variation of High Court order.

Orders

  • Revocation of approval of the IVA in respect of Mr Kapoor upheld.
  • Order granting the Bank liberty to present a bankruptcy petition against Mr Kapoor upheld.