Can debtor companies re-run the same arguments? (EDF Energy Customers Ltd v Re-Energised Ltd)

Can debtor companies re-run the same arguments? (EDF Energy Customers Ltd v Re-Energised Ltd)

The High Court has reaffirmed that a court will not allow a debtor company to run the same arguments at a winding-up petition hearing that have already been adjudicated upon at a hearing of an application to restrain advertisement. Daisy Brown, barrister at Guildhall Chambers, who represented the respondent in EDF Energy Customers Ltd (formerly EDF Energy Customers plc) v Re-Energised Ltd, looks at the implications of the case for practitioners.

EDF Energy Customers Ltd (formerly EDF Energy Customers plc) v Re-Energised Ltd [2018] EWHC 652 (Ch), [2018] All ER (D) 02 (Apr)

The High Court has reaffirmed that a court will not allow a debtor company to run the same arguments at a winding-up petition hearing that have already been adjudicated upon at a hearing of an application to restrain advertisement. Daisy Brown, barrister at Guildhall Chambers, who represented the respondent in EDF Energy Customers Ltd (formerly EDF Energy Customers plc) v Re-Energised Ltd, looks at the implications of the case for practitioners.

EDF Energy Customers Ltd (formerly EDF Energy Customers plc) v Re-Energised Ltd

What are the practical implications of this case?

The case reaffirms the principle (adopted by analogy from personal insolvency cases including Harvey v Dunbar Assets [2017] EWCA Civ 60, [2017] All ER (D) 127 (Feb)) that, absent exceptional circumstances, a court will not allow a debtor company to run the same arguments at a winding-up petition hearing that have already been adjudicated upon at a hearing of an application to restrain advertisement. This principle extends to arguments that the company had the opportunity to run at the earlier stage and failed to. To permit the company to do so would be a waste of court resources and potentially res judicata.

The case may affect the approach to advising a debtor company before making an application to restrain presentation or the advertisement of the petition—there is a high degree of risk in making a rushed application when all the possible arguments are not yet known or documents unavailable. However, the case is fact-sensitive and the court found that the new arguments being run by the company did not have merit.

It remains to be seen whether, in a case where the company has an extremely compelling and determinative argument that it omitted to run at an earlier stage, this might be an exceptional circumstance as envisaged by Neuberger J in Atherton v Ogunlende [2001] Lexis Citation 1383

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About the author:

Neeta has been working as a paralegal in Banking and Insolvency for the past 4 and a half years.

She started her legal career at Allen & Overy in 2008 in the midst of the global financial crisis and the collapse of Lehmans where she gained most of her experience.

Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office. Neeta graduated with a 2:1 honours degree from University of London, Queen Mary College and went on to obtain a distinction from the College of Law in the Legal Practice Course. She moved to Lexis®PSL in April 2013.