Restraining the Presentation of a Winding Up Petition
In a recent case, Tallington Lakes Limited –v- South Kesteven District Council  EWCA civ 443, Tallington Lakes Limited sought to appeal the decision of a lower court to refuse to restrain the presentation of a winding up petition by South Kesteven District Council.
One means by which a party can seek to restrain the presentation of a winding up petition is to show that the debt underlying the possible winding up proceedings is disputed, possibly by showing that there is a possible defence to the claim.
On the facts of this particular case, Lord Justice Etherton found that, as at the date of the original hearing in this matter on 14 January 2011, there was an undisputed debt in excess of £750.00 owed by the appellant, Tallington Lakes Limited, and accordingly for that reason permission to appeal the lower court’s refusal to restrain the presentation of a winding up petition in this matter was dismissed.
Lord Justice Etherton provided useful guidance as to the circumstances in which such an application might succeed:-
“I have to emphasise, however, in this context that it is well established that the threshold for establishing that a debt is disputed on substantial grounds in the context of a winding up petition is not a high one for restraining the presentation of the winding up petition and may be reached even if, on an application for summary judgment, the defence could be regarded “shadowy”.”
This is usefully guidance to parties giving consideration to pursuing and/or enforcing debts by means of statutory demands and winding up petitions in circumstances where it is possible that the debtor may have a defence, albeit a “shadowy” defence, in respect of the claimed debt.
It is also useful guidance for parties seeking to restrain the presentation of winding up proceedings.
If you would like any more information about this topic, please contact Philip Vickers.