Setting aside a statutory demand—Dunbar Assets plc v Butler

Setting aside a statutory demand—Dunbar Assets plc v Butler

What lessons can lawyers learn from the Chancery Division’s decision to allow an appeal against a decision of a deputy registrar setting aside a statutory demand that had been served on a guarantor? Faith Julian of 9 Stone Buildings analyses the decision in Dunbar Assets Plc v Butler.

Original news

Dunbar Assets plc v Butler [2015] EWHC 2546 (Ch), [2015] All ER (D) 138 (Sep)

The Chancery Division allowed an appeal against a decision of a deputy registrar setting aside a statutory demand that had been served on a guarantor, where an alleged representation that the guarantees would not be enforced was not arguably capable of giving rise to estoppel and there was no other ground for finding that the guarantee was not entitled to enforce the guarantees. Further, the deputy registrar had been wrong to conclude that there was a genuine triable issue as to the guarantor’s liability for the sums claimed. The defendant had had no realistic prospect of making out the factual basis of his case.

What was the background to the application briefly?

This was an appeal against an order setting aside a statutory demand based upon various personal guarantees given by Mr Butler. At first instance the deputy registrar found that there was a genuine triable issue as to whether the guarantees were enforceable on the basis of an alleged compromise reached between Dunbar Assets Plc (Dunbar) and Mr Butler.

What were the legal issues that the deputy judge had to decide in this application?

The deputy judge was asked to consider whether or not:

  • the deputy registrar had applied the correct test for setting aside a statutory demand
  • Mr Butler’s evidence, taken at its highest, was capable of establishing the alleged promissory estoppel (ie the compromise), and
  • the deputy registrar had attached sufficient weight to contemporaneous documentation postdating the alleged compromise

Why

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.