- Creditor v creditor on challenging proofs of debt (Re Farrar Construction Ltd; Levi Solicitors LLP v Wilson)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Burden of proof
- Interpretation of the contract
- Case details
Restructuring & Insolvency analysis: This was an application pursuant to the Insolvency Rules 1986 (IR 1986), rule 4.83(2), by Levi Solicitors LLP (‘Levi’) as a major creditor of Farrar Construction Ltd (‘Farrar’) for relief in relation to a proof of debt submitted by JKR Property Development Limited (‘JKR’) on the basis that the supervisor of Farrar’s company voluntary arrangement (CVA), Mr Wilson, was wrong to have admitted the proof of JKR in the sum of £185,921.70. By its application, Levi sought directions from the court that JKR’s proof should be rejected on the basis that it was not sufficiently established and, thereafter, further directions to the supervisor in relation to the same. Prior to the hearing, a list of issues was agreed between the parties and the amount for which the proof was admitted by Mr Wilson (£185,921.07) was no longer in issue, on the basis that Mr Wilson accepted that the proof was overstated by £30,000. The amount in which JKR contended the proof should have been admitted was adjusted to £128,921.70. In respect of the list of issues, the court was tasked with the question of who had the burden of proof on the application; Levi as applicant or JKR as second respondent, as well as the issues in dispute regarding the interpretation of the JCT contract to which the proof derived from. Upon consideration of the same, as considered below, the judge found that JKR’s proof should be accepted by Mr Wilson in the revised sum of £128,921.70. Written by Amie Boothman, a commercial barrister at Exchange Chambers who was instructed by Carrick Read Solicitors LLP on behalf of the first respondent.
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