MacPherson v Wise

On an application to set aside a statutory demand, the court must decide whether the alleged dispute about the debt has substantial grounds. It need not accept every factual assertion or order a trial merely because the evidence conflicts. The evidence must be assessed as a whole, including its reliability and the legal consequences of the facts asserted.

Where a debtor relies on an alleged oral agreement postponing repayment until an uncertain future event, the issue is whether there are substantial grounds for believing that the particular agreement asserted was made. The court may reject the contention as incredible or insufficiently supported without conducting a full trial. A promissory estoppel also requires relevant detriment; consequences that merely reflect the debtor’s existing liability do not necessarily constitute detriment.

Mr Macpherson accepted that he owed Mr Wise at least £268,500 arising from loans and sale proceeds. He applied to set aside a statutory demand for approximately £338,000, contending that the parties had agreed that repayment would not be required until the sale of property owned by Howard Land Limited.

The District Judge dismissed the application under Insolvency Rule 6.54(b), finding no genuinely triable issue. Mr Macpherson appealed, arguing that the evidence raised a substantial dispute, and alternatively that Mr Wise was prevented by promissory estoppel from serving the statutory demand. The central issues were whether the alleged postponement agreement had substantial evidential grounds and whether any detriment supported estoppel.

1. Appeal dismissed. The District Judge had correctly dismissed the application to set aside the statutory demand.
2. Under Insolvency Rule 6.54(b), the court asks whether the debt is disputed on grounds which appear substantial. The procedure is not a substitute for a trial, but the court is not required to accept any dispute supported by an assertion of fact. It must assess the evidence against all admissible material and determine whether the alleged dispute has real substance. The principle stated in Re a Debtor [1995] Ch 66 was applied.
3. Where the debtor alleges an oral agreement postponing repayment, the relevant question is whether there are substantial grounds for believing that the particular agreement asserted was made. The court may assess the reliability, coherence and sufficiency of the evidence for that purpose. The approach stated by Patten J in Portsmouth v Alldays Franchising Ltd [2005] EWHC 1006 (Ch) was applied.
4. The alleged agreement was indefinite and unsupported by adequate evidence. The surrounding events, including the later legal charge and the statutory demand, were more consistent with a further opportunity to repay than with a binding postponement until an uncertain sale. The District Judge’s description of the evidence as incredible and very thin disclosed no error of law.
5. The alternative promissory-estoppel argument also failed. The asserted detriment either reflected Mr Macpherson’s existing obligation to pay the debt or was unsupported by evidence of relevant expenditure or liability.

• Slough County Court: District Judge Devlin dismissed the application to set aside the statutory demand.
• High Court (Chancery Division): The appeal was dismissed and the District Judge’s decision upheld.