Barrowfen Properties Ltd v Hambros Investments Ltd & Anor

An injunction restraining presentation of a winding-up petition requires the debtor to show that the debt is disputed on genuine and substantial grounds. The threshold is not high, but a mere assertion or evidential cloud is insufficient. The court must assess the evidence as a whole. Previous dishonesty or contempt by a witness does not create a presumption that the witness will lie in later proceedings. Reliable contemporaneous documents may establish the debt even where primary banking evidence is unavailable. Assertions of mistake or misconduct, unsupported by evidence, do not create a substantial dispute requiring cross-examination.

Barrowfen Properties Ltd applied for an injunction preventing Hambros Investments Ltd and Anupam Investments Ltd from presenting a winding-up petition. The alleged debt arose under a loan agreement and included sums paid to solicitors for the purpose of compensating a protected commercial tenant before redevelopment of property.

Barrowfen accepted receipt of most advances but disputed, among other matters, whether Hambros had funded a £160,000 tranche and whether the loan agreement was enforceable. An interim injunction had been granted pending the final hearing. The central issue was whether Barrowfen had shown a genuine and substantial dispute sufficient to deprive Hambros of standing to present a petition.

1. Application dismissed. Barrowfen failed to establish a genuine and substantial dispute concerning the £160,000 tranche. The sum was due and owing.
2. The applicable test was whether the debt was disputed on genuine and substantial grounds. The threshold in winding-up proceedings is not high and may be met even where a defence would be regarded as shadowy on an application for summary judgment. A substantial dispute is sufficient to show, for present purposes, that the petitioner lacks standing.
3. The court rejected the submission that Girish Patel’s previous findings of dishonesty and contempt meant that his evidence had to be approached on the presumption that he would lie. Such history could be taken into account, but the court had to consider all the evidence and reach its conclusions fairly.
4. The absence of a bank statement identifying Hambros as the source of the payment did not create a genuine and substantial dispute. The ledger and other records of Stevens & Bolton, including evidence of receipt from Hambros and payment of compensation to the tenant, objectively and sufficiently established the relevant payment.
5. A bare assertion that the solicitors had made a mistake or deliberately falsified their ledger was unsupported by evidence. It was an unfounded objection of the kind identified in Re Claybridge Shipping Company SA [1981] Com LR 107, and did not justify requiring cross-examination or restraining presentation of the petition.
6. The arguments based on the proof of debt and the solicitors’ invoices did not displace the evidence taken as a whole. The court therefore found no genuine or substantial grounds for contending that the loan had not been made in accordance with the loan agreement.

First-instance decision. The judgment records an earlier interim injunction granted by ICC Judge Jones on 8 August 2019, which was continued pending this final decision.