Stanbic Bank Limited v Jonah Investments Limited & Another (Miscellaneous Application 8 of 2017)

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

Held that a company's non-compliance with a statutory demand following service establishes the court's jurisdiction to make a winding up order under section 3(2)(a) of the Insolvency Act 2011, even if the company is in fact able to pay its debts. Where a judgment creditor serves a statutory demand which exceeds the statutory minimum and the company fails to comply, the company is deemed unable to pay its debts and a winding up order may be issued.

Outcome

Company ordered to be wound up with Official Receiver appointed as Provisional Liquidator

Facts

Judgment was entered in favour of Stanbic Bank Limited against Jonah Investments Limited on 12 September 2005. The respondent lodged a notice of appeal which was struck out by the Court of Appeal on 19 June 2015. A statutory demand was served on the respondent on 14 June 2017 requiring payment of the decretal amount. Service was acknowledged by the respondent. Despite receipt of the statutory demand and ample time to pay, the respondent failed to pay the decretal amount specified in the demand. The applicant contended the respondent was unable to pay its debts as and when they fell due.

Issues

1. Whether the 1st respondent's non-compliance with the statutory demand establishes the court's jurisdiction to make a winding up order.
2. Whether the 1st respondent is deemed unable to pay its debts for the purposes of insolvency proceedings.

Orders

• Declaration made that Jonah Investments Limited failed to comply with the statutory demand and is deemed unable to pay its debts and is thus insolvent.
• Application allowed.
• Order to wind up/liquidate Jonah Investments Limited issued.
• The Official Receiver appointed as Provisional Liquidator.
• Costs of the applicant to be met from the proceeds of the winding-up/liquidation process.

Rules and key headnotes

Legislation cited (4)

• Insolvency Act 2011 s.3(2)(a)
• Insolvency Act 2011 s.4(2)(a)
• Insolvency Regulations 2013 reg.85(2)(a)
• Insolvency Regulations 2013 reg.97(a)

Cases cited (4)

• BNY Corporate Trustees Services Ltd v Neuberger Berman Europe Ltd [2011] EWCA Civ 227
• Mann v Goldstein [1968] 2 All ER 769
• Cornhill Insurance plc v Improvement Services Ltd [1986] BCLC 26
• Jomayi Consultants Limited v NC Bank Uganda Limited (Company Cause No. 5 of 2020)

The original judgment as reported. Read the original PDF before relying on any passage.