1998/195 - PSD Enterprises v Barrett [1998] UR 195 (24 September 1998)

1998/195 - PSD Enterprises v Barrett [1998] UR 195 (24 September 1998)

The Royal Court correctly applied the cash flow insolvency test and its finding of insolvency stands. However, the Royal Court failed to adequately address and reason the issue of requisite desire to prefer, particularly by not testing the appellant's evidence by cross-examination or providing sufficient reasons. This constitutes an error of law requiring rehearing on the issue of requisite desire only.

Citation
[1998] UR 195
Parties
Appellant: Miss Phyllis Eileen Barrett; Respondent: The Viscount; Company: PSD Enterprises Limited
Jurisdiction
Jersey
Judgment Date
24 September 1998
Procedural Posture
Bankruptcy Appeal / Appeal From Royal Court Order
Outcome
appeal allowed in part
Legal Topics
Voidable Preferences, Director's Duties, Insolvency Test, Requisite Desire, Repayment of Preference
Insolvency Bankruptcy Company Law Voidable Preferences Director's Duties Insolvency Test Requisite Desire Repayment of Preference

Case Brief

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Parties

Miss Phyllis Eileen Barrett

Appellant

The Viscount

Respondent

PSD Enterprises Limited

Company

Procedural Posture

Bankruptcy Appeal / Appeal From Royal Court Order

Legal Issues

  1. 1 What is the correct legal test for insolvency under Article 17 of the Bankruptcy (Désastre) (Jersey) Law 1990?
  2. 2 Did the Royal Court correctly apply the insolvency test?
  3. 3 What is the correct approach to determining 'requisite desire' for a preference?

Ratio Decidendi

The Royal Court correctly applied the cash flow insolvency test and its finding of insolvency stands. However, the Royal Court failed to adequately address and reason the issue of requisite desire to prefer, particularly by not testing the appellant's evidence by cross-examination or providing sufficient reasons. This constitutes an error of law requiring rehearing on the issue of requisite desire only.

Court Disposition

appeal allowed in part

Orders

  • Matter remitted for rehearing on the issue of requisite desire only.
  • Finding of insolvency at the material time stands.