In Doubtfire v Horrell [2026] EWHC 2173 (Ch) ('Doubtfire'), Chief ICC Judge Briggs heard an application to set aside a statutory demand ('SD') served on an individual/(alleged) debtor ('D'), by an alleged creditor ('H'), on grounds under Insolvency (England and Wales) Rules 2016 (the 'Rules'), r.10.5(5), that:
(a) 'the debtor appears to have a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt specified in the statutory demand;'
(b) 'the debt is disputed on grounds which appear to the court to be substantial;'
(d) 'the court is satisfied, on other grounds, that the demand ought to be set aside.'
H's SD was founded upon a personal guarantee and indemnity given by D in respect of the liabilities of the principal debtor Silversword Developments Limited ("Silversword"), of which D was a director. As Chief ICC Judge Briggs explained:
'D resists the demand upon two distinct footings. The first is that the guarantee is vitiated by duress or undue influence, and is accordingly liable to be rescinded, so that the debt is disputed upon substantial grounds within rule 10.5(5)(b) of the Insolvency (England and Wales) Rules 2016 (the "Rules"). The second is that he has cross-claims against H in defamation and in unlawful means conspiracy which equal or exceed the sum demanded, within rule 10.5(5)(a). Reliance was also placed, in the alternative, upon the residual jurisdiction under rule 10.5(5)(d) of the Rules.
It is convenient to record at the outset what is not in dispute. It is not in dispute that H advanced monies to Silversword, that Silversword failed to repay the loan according to its terms, that a demand for repayment was made and went unanswered, Silversword has entered creditors' voluntary liquidation, and that D executed the guarantee. Silversword has at no stage advanced any dispute as to its liability.' (paragraphs 3 and 4)
Under the heading 'The legal framework', Chief ICC Judge Briggs in Doubtfire said, at paragraph 26, set out the relevant provisions from the Rules:
'Rule 10.5(5) of the Rules provides, so far as material, that the court may grant an application to set aside a statutory demand if:
"(a) the debtor appears to have a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt specified in the statutory demand;
(b) the debt is disputed on grounds which appear to the court to be substantial; ...
(d) the court is satisfied, on other grounds, that the demand ought to be set aside."
Chief ICC Judge Briggs in Doubtfire then addressed r.10.5(5)(a), (b) and (d) in turn, before making some observations about quite what avoiding a mini-trials might entail. Chief ICC Judge Briggs said, at paragraphs 27 to 32:
'In applying rule 10.5(5) of the Rules the courts have formulated guidance. In respect of Rule 10.5(5)(a) the cross-claim must be one which can be characterised as genuine and serious, or of substance and the characterisation is evaluated on the evidence: Ashworth v Newnote [2007] EWCA Civ 793 [35]. It is therefore incumbent upon the debtor to demonstrate with evidence that his cross-claim is of substance, and neither bare assertion nor a "cloud of objections" contrived to justify factual enquiry will suffice.
The evaluative exercise will take account of any delay in prosecuting a cross-claim. The court may draw an adverse inference unless the delay is justified or explained to the satisfaction of the court. It is open to the court to reject evidence because of its inherent implausibility or because it is contradicted by or not supported by the documents: Ashworth v Newnote [2007] EWCA Civ 793 [34] citing National Westminster Bank plc v Daniel [1993] 1 WLR 1453, 1456-7; Portsmouth v Alldays Franchising Ltd [2005] BPIR 1394, [12].
In respect of rule 10.5(5)(b) the evaluative exercise I have explained above applies equally. A dispute is substantial only if it has "realistic prospect of success": Ashworth v Newnote [2007] EWCA Civ 793 [33].
Rule 10.5(5)(d) provides a residual discretion which will normally be exercised to prevent an injustice. The discretion is not unfettered. It is to be exercised judicially and in accordance with authority. In Re a Debtor [1989] 1 WLR 271, [276D], the court explained that the approach to sub-paragraph (d) is to ask whether the applicant can show "a substantial reason comparable to the sort of reason one sees in paras (a), (b) and (c) of r 6.5(4), why the demand ought to be set aside". See also Budge v A.F. Budge (Contractors) Ltd [1997] BPIR 366 , 371G; Remblance v Octagon Assets Limited [2009] EWCA Civ 581 [58], "the search for comparability between the position of the debtor in (d) and the debtor in (a)."
[Counsel for D] submitted, and I accept, that the court must not conduct a mini-trial. That principle, however, has a defined content, and it is important to be precise about it, because it has been pressed rather further in argument than authority permits. The court may not resolve a conflict of testimony, prefer one witness's account of a conversation to another's, or determine a contested question of past fact upon the balance of probabilities. There are limited circumstances where the court does not need to cross the line into the balance of probabilities to determine if the evidence is genuine. I have previously mentioned Portsmouth v Alldays Franchising Ltd [2005] BPIR 1394. Paragraph 12 of the judgment is worth citing:
"the mere fact that a party in proceedings not involving oral evidence or cross-examination asserts that certain things did or did not occur, is not sufficient in itself to raise a triable issue. That evidence inevitably has to be considered against the background of all the other admissible evidence and material in order to judge whether it is an allegation of any substance."
The court may also decide a short point of law or of construction where it has the necessary material and the parties have had a proper opportunity to address it; it may rely upon the documentary record and the chronology which that record establishes; and it may take the debtor's evidence at its highest and ask whether, even upon that footing, the minimum evidential threshold has been met. I have confined myself to these principles, and I have determined nothing which required me to decide whether any contested account is true by crossing the balance of probabilities line.'
Later, Chief ICC Judge Briggs in Doubtfire said:
(a) at paragraph 54, when considering whether r.10.5(5)(a) had been shown:
'Rule 10.5(5)(a) requires a cross-claim which equals or exceeds the amount of the debt specified in the demand...A cross-claim of unascertained value cannot be shown to equal or exceed the Statutory Demand.'
(b) at paragraph 34, when considering whether r.10.5(5)(b) had been shown:
'A minimum evidential threshold must be crossed before it can be said that there is a substantial dispute, and assertion, however often repeated and however emphatically expressed, does not cross it.'
On the facts in Doubtfire, Chief ICC Judge Briggs said, at paragraph 87:
'...the debt is not disputed upon grounds which appear to me to be substantial, D does not appear to have a cross-claim which equals or exceeds the sum demanded, and there is no other ground upon which the demand ought to be set aside. The Application is dismissed.'[1]
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[1] In Doubtfire v Horrell [2026] EWHC 2173 (Ch),
(a) D alleged D had a cross-claim for arising from the tort of: (a) defamation; and (b) unlawful means conspiracy. Chief ICC Judge Briggs said, as to r.10.5(5)(a):
'...the cross-claim founders upon serious harm. By section 1(1) of the Defamation Act 2013 a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant.' (paragraph 48) and 'D adduces no evidence of serious reputational harm caused, or likely to be caused' (paragraph 51)
'...the cross-claim is wholly unquantified. Rule 10.5(5)(a) requires a cross-claim which equals or exceeds the amount of the debt specified in the demand.' (paragraph 54)
'...the defamation claim adds nothing to the conspiracy claim, and it is instructive that D's own pre-action letter of 30 June 2025 recites the Inspired Lending Email as an act done in furtherance of the alleged conspiracy. Whether the email is examined as an independent tort or as an element of the conspiracy, it fails for the reasons given: there is no evidence that it caused D any harm at all.
Accordingly the defamation cross-claim is not one of substance. It is a bare assertion of harm unsupported by evidence, and any loss that is said to arise is not shown to equal or exceed the amount specified in the demand.' (paragraphs 55 and 56)
As to the alleged cross claim founded upon the tort of unlawful means conspiracy, after considering the evidence said to estabilsh the ingredients of the tort, Chief ICC Judge Briggs said:
'Taking those matters together, the alleged conspiracy as it was advanced at the main hearing is not a genuine and serious cross-claim. There is no substantial evidential basis from which a combination or agreement between H and Mr Nouri could realistically be inferred. The primary facts do not rationally support an inference of an intention to injure D. No unlawful act was identified with sufficient particularity. The loss complained of was, upon D's own case, caused by the administrators and not by H. And the sum claimed is unsupported by any evidence from which a chance of any value could be evaluated.
There is no substance in the claim and it fails to carry a degree of conviction such that it can be said that it is genuine.' (paragraphs 83 and 84)
As a result,
'D does not appear to have a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt specified in the demand, within rule 10.5(5)(a).' (paragraph 84)
(b) D alleged D had a defence to the claim, founding the SD, based on duress and undue influence (in other words, D entered into the personal guarantee and indemnity document, by reason of duress/undue influence, which vitiated his consent to the document (and the obligations it contains)). As to r.10.5(5)(b), Chief ICC Judge Briggs said:
'...the case upon duress and undue influence is a bare assertion of the character which is unsubstantial, contradicted by the contemporaneous documents and unsupported by any material capable of establishing that illegitimate pressure operated upon D's entry into the Guarantee. It does not have a realistic prospect of success, and it carries no degree of conviction such that it can be said it is genuine. The debt is not disputed upon grounds which appear to me to be substantial within rule 10.5(5)(b).' (paragraph 45)
(d) as to r.10.5(5)(b), Chief ICC Judge Briggs said, under the heading 'The residual ground and the amount of the debt':
'[Counsel for D] advanced no independent case under Rule 10.5(5)(d), and I can identify no basis upon which it would be unjust to permit this Statutory Demand to stand. In my judgment [Remblance v Octagon Assets Limited [2009] EWCA Civ 581 [58]] proceeded on the co-extensive nature of the guarantor's liability, so that where the principal debtor could itself have resisted a demand the guarantor should be treated comparably. Here Silversword has at no stage disputed its liability, made no answer to the demand made on 15 April 2025, and has entered creditors' voluntary liquidation. There is accordingly no comparison with the Remblance kind, and D can show no substantial reason comparable to the sort of reason seen in paragraphs (a), (b), and (c) why the demand ought to be set aside.
I note that the demand under the Guarantee of 16 April 2025 was for £399,772.00, whereas the Statutory Demand and [counsel for H's] skeleton refer to a sum of approximately £430,000 together with interest. Any residual dispute as to the precise quantum would not of itself justify setting aside, since where there is no doubt that the creditor is a creditor for a sum sufficient to found the demand, a dispute as to the precise amount owing is not a sufficient answer: Re Tweeds Garages Ltd [1962] Ch 406. Nevertheless reasons for the increase should be provided to afford D an opportunity to meet the Statutory Demand, if he is able, with some confidence.' (paragraphs 85 and 86)
There was a further hearing in Doubtfire, prior to judgment being handed down. D sought to apply to rely upon further evidence - an agreement between shareholders (2022 Shareholder Agreement) (paragraph 89).
After considering this, Chief ICC Judge Briggs said,
(1) 'In my judgment [SIC] is fair and just to permit the 2022 Shareholder Agreement to be admitted for the limited purpose of considering whether it affects the existing cross-claim relied upon under rule 10.5(5)(a). On the other hand, it is not fair and just to allow D to advance, for the first time orally at the resumed hearing, a new and independent ground based on breach of the 2022 Shareholder Agreement.' (paragraph 95);
(2) '...2022 Shareholder Agreement does not alter the conclusions reached above. The debt is not disputed on grounds which are substantial, and D has not demonstrated to the satisfaction of the court any counterclaim, set-off or cross-demand equalling or exceeding the amount of the Statutory Demand.' (paragraph 109)