In Bridging Finance Inc v Lyons [2025] EWHC 1694 (Ch), Deputy ICC Judge Baister (formerly Chief Registrar) heard a final hearing on a bankruptcy petition, where (amongst other things), the (alleged) debtor opposed the making of a bankruptcy order against him, on the basis that the debt, said to found the petition, was disputed. Under the heading 'The disputed debt issues', Deputy ICC Judge Baister said, at paragraph 62:
'The fundamental legal principles are uncontroversial...
(1) The bankruptcy court will dismiss a petition if there is a genuinely triable issue as to the existence of the petition debt: the test is the same as that applicable to disputed statutory demands (Markham v Karsten [2007] EWHC 1509 (Ch); Muir Hunter on Personal Insolvency at 3-414).
(2) The test set out in the Practice Direction on Insolvency Proceedings is that the court will normally set aside a statutory demand where on the evidence there is a genuinely triable issue (Alexander-Theodotou v Michael Kyprianou [2016] EWHC 1493 (Ch), at [12], per Briggs J, as he then was).
(3) There is no practical distinction between “the genuine triable issue” test in the PDIP and the “real prospect of success” test in Part 24 of the CPR (Ashworth v Newnote Limited [2007] BPIR 1012; Muir Hunter 7A-138.4; Smith v Gregory [2022] EWHC 190, at [5]).
(4) The court should be alive to a debtor’s seeking to raise a “cloud of objections” that a debt is disputed and that the dispute is not able to be determined on documentary evidence and without cross-examination (Angel Group Limited v British Gas Trading Ltd [2012] EWHC 2702 (Ch), per Norris J; Coilcolor Ltd v Camtrex Ltd, at [35]).
(5) It is open to the court to reject an applicant’s evidence if it is inherently implausible or it is contradicted or not supported by contemporaneous documentation. A mere assertion by the applicant that something has been said or has happened will not generally be enough if those words or events were in dispute and material to the issue between the parties (Collier v P&MJ Wright (Holdings) Limited [2007] EWCA Civ 1329, at [21], per Arden LJ).
(6) The court may reject evidence as being manifestly incredible, if it is shown to be the case by other facts which are admitted, or by reliable contemporaneous documents (Coyne v DRC Distribution Ltd [2008] EWCA Civ 488, at [58], per Rimer LJ).
(7) In determining whether there is a substantial dispute as to the debt, the court may consider the commercial improbability of the applicant’s case, and whether it is inherently unlikely or implausible that the respondent would have entered into such an agreement (Macplant Services Ltd v Contract Lifting Services (Scotland) Ltd CSOH 158, [57]-[59], per Lord Hodge).
(8) The court may ask itself why arguments run before it have not previously been run (West Bromwich Building Society v Crammer [2002] EWCA Civ 1924, at [19], per Chadwick LJ).'[1]
Collatory Case Series
The Collatory Case Series, is an series of bulletins, designed to report that one case which collates the essential principles/propositions of law, for a particular doctrine/area of law. It is not designed as a deep and comprehensive review of an area of law, but to provide that quick 'go to' case.
SIMON HILL © 2025*
BARRISTER
33 BEDFORD ROW
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole, or the Copyright holder. No attempt has been made to provide an exhaustive review/account of the law in this area. *Copyright is owned by Barrister Search Limited.
[1] It is probable right to note, that when Deputy ICC Judge Baister said 'uncontroversial', he was referring to uncontroversial as between counsel before him, rather than in some wider sense (see paragraphs 62 and 63)