Trentham v. Lawfield Investments [2002] ScotCS 126 (3rd May, 2002)

Trentham v. Lawfield Investments [2002] ScotCS 126 (3rd May, 2002)

The pursuer established a significant risk of the defender's insolvency due to the small surplus of assets over liabilities, reliance on a single development, discrepancies in asset valuations, outstanding liabilities, and the likelihood that other creditors would be paid before the pursuer. The existence of a defence was not sufficient to negate this risk, as the defence was not substantial and the pursuer had a good prima facie case. The practical difficulties of inhibition in relation to heritable property did not outweigh the need for judicial security in this case.

Citation
[2002] ScotCS 126
Parties
Pursuer: Barry D Trentham Limited; Defender: Lawfield Investments Limited
Jurisdiction
Scotland
Procedural Posture
Civil Commercial (construction) / Motion for Recall of Inhibition on the Dependence
Outcome
Defender's motion for recall of inhibition refused.
Legal Topics
Inhibition on the Dependence, Risk of Insolvency, Construction Contract Payments, Judicial Security, Prima Facie Case
Civil Procedure Construction Law Insolvency Law Inhibition on the Dependence Risk of Insolvency Construction Contract Payments Judicial Security Prima Facie Case

Case Brief

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Parties

Barry D Trentham Limited

Pursuer

Lawfield Investments Limited

Defender

Procedural Posture

Civil Commercial (construction) / Motion for Recall of Inhibition on the Dependence

Legal Issues

  1. 1 Whether there is a significant risk of the defender's insolvency justifying inhibition on the dependence
  2. 2 Whether the existence of a defence to the pursuer's claim is relevant to the justification for inhibition
  3. 3 Whether inhibition is circular where the defender's stock in trade is heritable property

Ratio Decidendi

The pursuer established a significant risk of the defender's insolvency due to the small surplus of assets over liabilities, reliance on a single development, discrepancies in asset valuations, outstanding liabilities, and the likelihood that other creditors would be paid before the pursuer. The existence of a defence was not sufficient to negate this risk, as the defence was not substantial and the pursuer had a good prima facie case. The practical difficulties of inhibition in relation to heritable property did not outweigh the need for judicial security in this case.

Court Disposition

Defender's motion for recall of inhibition refused.

Orders

  • Inhibition on the dependence to remain in force.