BV8 Limited v BV9 Limited (in administration) & Anor

An appeal against rejection of a proof of debt must be determined by reference to the claim actually proved and adjudicated upon. A materially different claim, such as a loan or an unparticularised running-account balance, cannot ordinarily be introduced for the first time in an appeal without amendment, fair notice and a proper opportunity for investigation and response.

Where the evidence requires an account to establish liability, the court should not determine the claim merely by checking whether figures are arithmetically correct. The underlying transactions, contractual terms and supporting records must be proved. An entire agreement clause may prevent reliance on extrinsic terms which add to, vary or qualify the written agreement.

BV8 appealed under Rule 14.8 of the Insolvency (England and Wales) Rules 2016 against the administrators’ rejection of a proof of debt for £1,074,036.91. The proof described the claim as earned interest margin arising from assignments of loan books to BV9.

On appeal, BV8 advanced successively different formulations: an unpaid loan made on 16 December 2020, and monies due on a running inter-company account. It also relied on an alleged estoppel arising from amendments made to transfer documents. The central issues were whether those reformulated claims could be determined on the appeal and whether the evidence established liability.

1. Disposition. The appeal was dismissed as framed. The claim in the proof of debt had been abandoned and superseded by materially different claims based on a loan and then an inter-company account.
2. Proof and scope of appeal. Rule 14.4 of the Insolvency (England and Wales) Rules 2016 requires a proof of debt to give sufficient particulars of how and when the liability arose, the documents substantiating it, and relevant deductions or set-off. This enables the office-holder to adjudicate efficiently and allows any appeal to address the claim actually considered. BV8 had not applied to amend its proof, and the administrators were entitled to prepare their case on the basis of the interest-margin claim.
3. Insufficient evidential basis. The loan claim depended upon an inter-company account, while the account claim required investigation, underlying documentation and application of the assignment terms. The court could not responsibly verify the account without submissions and evidence addressing its opening balance, transactions, contractual basis and interaction with Kookmin’s facilities. The administrators had not investigated or adjudicated the superseding claims, and deciding them would risk prejudice to BV9’s creditors.
4. Contractual documents. The deeds of assignment were to be construed objectively, by their natural and ordinary meaning in contractual and commercial context. Their entire agreement clause precluded introducing terms which added to, varied or qualified the written terms. The deeds contained no term requiring payment of the claimed interest margin.
5. Estoppel. The administrators’ correspondence referred to consideration but did not represent that the amount claimed was accepted. There was therefore no representation on which BV8 could rely. The alleged estoppel failed.
6. The court’s observations concerning possible amendment or a new proof, Kookmin’s involvement, and further investigation were not directions or determinations of those issues. Any further steps were for BV8 and the administrators in the exercise of their statutory functions.

The judgment records an appeal under Rule 14.8 of the Insolvency (England and Wales) Rules 2016 from the administrators’ decision rejecting BV8’s proof of debt. The High Court dismissed the appeal as framed.