Q&As

If an error is made in a company statutory demand, would this render the demand invalid under the Insolvency (England and Wales) Rules 2016?

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Produced in partnership with Lana Ashby of Durham University
Published on LexisPSL on 22/02/2018

The following Restructuring & Insolvency Q&A produced in partnership with Lana Ashby of Durham University provides comprehensive and up to date legal information covering:

  • If an error is made in a company statutory demand, would this render the demand invalid under the Insolvency (England and Wales) Rules 2016?

If an error is made in a company statutory demand, would this render the demand invalid under the Insolvency (England and Wales) Rules 2016?

The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, Pt 7, Ch 2 relates to statutory demands under sections 123(1)(a) and 222(1)(a) of the Insolvency Act 1986 (IA 1986) which apply to companies, while IR 2016, SI 2016/1024, Pt 10, Ch 1 relates to statutory demands in bankruptcy. In answering this Q&A, it should be noted that IR 2016, SI 2016/1024, Pt 7 does not provide a direct answer to the treatment of errors in statutory demands while more detailed guidance is provided under IR 2016, SI 2016/1024, Pt 10. Nonetheless, even in cases where there is little statutory guidance (IR 2016, SI 2016/1024, Pt 7) or such guidance is given (IR 2016, SI 2016/1024, Pt 10), the jurisprudence has been useful in illustrating the court’s approach to such issues. Where there is a correlation between a repealed rule in the case law and the IR 2016, SI 2016/1024, this is noted below.

The decision of Munshi v Architectural Association (Chancery Division—decided 23 July 2015) (not reported by LexisNexis®) is instructive on the approach that the courts would adopt in cases of errors in statutory demands. Though decided under a now repealed rule (Insolvency Rules 1986 (IR 1986), SI 1986/1925, r 6.1),

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