In the matter of Kaupthing Singer and Friedlander Limited (in administration) and In the matter of the Insolvency Act 1986

In the matter of Kaupthing Singer and Friedlander Limited (in administration) and In the matter of the Insolvency Act 1986

The rule against double proof excludes both statutory set-off and the equitable rule in Cherry v Boultbee in insolvency situations involving suretyship; the creditor must be paid in full before the surety can prove against the principal debtor's estate.

Parties
Principal Debtor: Kaupthing Singer & Friedlander Ltd (in administration); Subsidiary/principal Debtor: Singer & Friedlander Funding plc (in administration); Trustee: HSBC Trustee (CI) Ltd; Appellant Advocate: Gabriel Moss QC; Appellant Advocate: Richard Fisher; Respondent Advocate: Robin Dicker QC; Respondent Advocate: Tom Smith
Jurisdiction
England and Wales
Judgment Date
19 October 2011
Procedural Posture
Appeal / Supreme Court Judgment
Outcome
Appeal allowed
Legal Topics
Rule Against Double Proof, Suretyship, Equitable Rule in Cherry V Boultbee, Statutory Set Off, Distribution of Insolvent Estates
Insolvency Company Law Rule Against Double Proof Suretyship Equitable Rule in Cherry V Boultbee Statutory Set Off Distribution of Insolvent Estates

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Parties

Kaupthing Singer & Friedlander Ltd (in administration)

Principal Debtor

Singer & Friedlander Funding plc (in administration)

Subsidiary/principal Debtor

HSBC Trustee (CI) Ltd

Trustee

Gabriel Moss QC

Appellant Advocate

Richard Fisher

Appellant Advocate

Robin Dicker QC

Respondent Advocate

Tom Smith

Respondent Advocate

Procedural Posture

Appeal / Supreme Court Judgment

Legal Issues

  1. 1 Whether the equitable rule in Cherry v Boultbee applies in insolvency where the rule against double proof excludes statutory set-off
  2. 2 Whether the rule against double proof prevents a surety from proving against the principal debtor's estate before the creditor is paid in full

Ratio Decidendi

The rule against double proof excludes both statutory set-off and the equitable rule in Cherry v Boultbee in insolvency situations involving suretyship; the creditor must be paid in full before the surety can prove against the principal debtor's estate.

Court Disposition

Appeal allowed

Orders

  • Chancellor’s direction set aside
  • Trustee must be paid in full before any proof against Funding by KSF as guarantor