After service of a Statutory Demand by a football club in connection with disputed charges it claimed were owing under an agreement over use of storage facilities at its grounds, commercial and insolvency lawyers in B P Collins’ dispute resolution group were instructed to apply to set aside the Demand after the club refused to withdraw it.
Simon Carroll, a partner and advocate in the group, represented the applicant, who argued: (a) that the agreement relied upon was, in fact, an oral discussion only later committed to writing and in disputed terms; (b) that the charges, which were for use of containers on land, failed to account for the use of the same space by the club itself; and (c) that even if due, a counter/cross-claim arose from the club’s use and for unpaid work done by the applicant at the club grounds.
The club argued unsuccessfully that the debt was not disputed, and sought to rely on a written record of the alleged agreement as evidence of the same, and a lack of evidence from the applicant to show that the debt was not due.
In setting aside the Demand on the basis that the debt appeared disputed on substantial grounds per paragraph 10.5(5)(b) of the Insolvency (E&W) Rules 2016 and unsuitable for determination by the insolvency courts, the Judge also ordered costs, having considered the pre-application correspondence and found there to be no good reason for the Demand not to been withdrawn at a much earlier stage, at the applicant’s invitation.
Key features of the case
Particular features of this case included the unusual length of time to a hearing – following a set aside application in December 2020 the first operative hearing took place in April 2022. Although also undoubtedly impacted by Covid, and often governed by other factors, court selection can play a significant part in time to listing and litigants would be well-advised to consider these factors.
Secondly, this case exemplified the consequences of the misuse often made of Statutory Demands, whether strategically or unwittingly as an alternative issuing a claim in disputes over commercial debts. Whilst a Demand certainly has value in the litigator’s arsenal, care (and advice) should be taken to ensure it is not deployed and relied on mistakenly.
If you have a commercial or insolvency dispute, or would like further information please contact the dispute resolution group at enquiries@bpcollins.co.uk.
