Abbey Forwarding Ltd. v Hone & Ors

Abbey Forwarding Ltd. v Hone & Ors

The intended loan to Wingpitch Limited was not within the ordinary course of business as contemplated by the freezing order, but justice required a variation to permit the applicants to advance funds to Wingpitch to cover specific liabilities, given the lack of evidence of alternative funding and the risk of liquidation.

Parties
Respondent/claimant: Abbey Forwarding Limited; Applicant/defendant: Mr Hone; Applicant/defendant: Patrick Daniel Owen; Applicant/defendant: William James Owen
Jurisdiction
England and Wales
Judgment Date
14 May 2010
Procedural Posture
Application in Liquidation Proceedings / Ruling on Variation of Freezing Order
Outcome
Application granted in part; freezing order varied to permit limited loan to Wingpitch Limited.
Legal Topics
Freezing Injunctions, Variation of Orders, Director Liability, Liquidation, Asset Management
Civil Procedure Company Law Insolvency Freezing Injunctions Variation of Orders Director Liability Liquidation Asset Management

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Parties

Abbey Forwarding Limited

Respondent/claimant

Mr Hone

Applicant/defendant

Patrick Daniel Owen

Applicant/defendant

William James Owen

Applicant/defendant

Procedural Posture

Application in Liquidation Proceedings / Ruling on Variation of Freezing Order

Legal Issues

  1. 1 Whether the freezing order should be varied to permit the applicants to make a loan to Wingpitch Limited
  2. 2 Whether the intended loan falls within the 'ordinary and proper course of business' exception in the freezing order
  3. 3 Whether justice requires the variation given the circumstances of Wingpitch Limited

Ratio Decidendi

The intended loan to Wingpitch Limited was not within the ordinary course of business as contemplated by the freezing order, but justice required a variation to permit the applicants to advance funds to Wingpitch to cover specific liabilities, given the lack of evidence of alternative funding and the risk of liquidation.

Court Disposition

Application granted in part; freezing order varied to permit limited loan to Wingpitch Limited.

Orders

  • Applicants permitted to advance funds from frozen assets to Wingpitch Limited for payment of specified rates liabilities, subject to calculation adjustments for partial occupation and deduction of Abbey Fireplaces' contribution.
  • Applicants required to procure restoration of frozen funds from Wingpitch's rental income if letting occurs.