Remblance v Octagon Assets Ltd

Remblance v Octagon Assets Ltd

The statutory demand against the guarantor should be set aside because, having regard to the co-extensive nature of the guarantor's liability and the principal debtor's substantial cross-claim, justice requires the guarantor to be treated comparably to the principal debtor. The ability of the guarantor to pay the debt is not, in itself, a sufficient reason to refuse to set aside the statutory demand under Rule 6.5(4)(d).

Parties
Appellant: John Remblance; Respondent: Octagon Assets Limited
Jurisdiction
England and Wales
Judgment Date
17 June 2009
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division, Bankruptcy Court) to Court of Appeal
Outcome
appeal allowed
Legal Topics
Statutory Demand, Guarantee Liability, Set Off, Bankruptcy, Discretion to Set Aside Statutory Demand
Insolvency Law Contract Law Statutory Demand Guarantee Liability Set Off Bankruptcy Discretion to Set Aside Statutory Demand

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Parties

John Remblance

Appellant

Octagon Assets Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division, Bankruptcy Court) to Court of Appeal

Legal Issues

  1. 1 Whether the statutory demand against a guarantor should be set aside under Rule 6.5(4)(d) of the Insolvency Rules 1986 when the principal debtor has a cross-claim exceeding the debt and the guarantor can pay the debt.
  2. 2 Whether the ability of the guarantor to pay the debt is a relevant or decisive factor in refusing to set aside the statutory demand.
  3. 3 Whether justice requires the guarantor to be treated comparably to the principal debtor in the context of insolvency proceedings.

Ratio Decidendi

The statutory demand against the guarantor should be set aside because, having regard to the co-extensive nature of the guarantor's liability and the principal debtor's substantial cross-claim, justice requires the guarantor to be treated comparably to the principal debtor. The ability of the guarantor to pay the debt is not, in itself, a sufficient reason to refuse to set aside the statutory demand under Rule 6.5(4)(d).

Court Disposition

appeal allowed

Orders

  • The statutory demand against Mr Remblance is set aside.
  • Permission to amend the grounds of appeal is refused.