TCPC Management Limited v Windrush Alliance UK Community Interest Company

The company applied to strike out a winding up petition presented by TCPC Management Ltd on the basis that the petition debt of £928,113.01 was bona fide disputed on substantial grounds and/or that the petition was an abuse of process. The principal legal test was whether the petition debt was bona fide disputed on substantial grounds, applying the approach in Angel Group Ltd v British Gas Trading Ltd and related authorities.

The petition debt derived from a Settlement Agreement dated March 2023 which recorded a compromise of disputes arising under a Service Level Agreement dated 1 March 2022. The company alleged the arrangements were unlawful or fraudulent (invoking CIC asset-lock constraints and the Regulator for Social Housing's Governance and Financial Viability Standard), that the Settlement Agreement was not binding, and that the petitioner had failed to particularise the debt.

The court rejected each ground. The Settlement Agreement was a comprehensive compromise which released prior claims and removed the force of the company's requests for particulars; the company's regulatory and asset-lock arguments did not establish illegality or factual absence of consideration that would invalidate the petition debt; contemporaneous documentary evidence and payment history undermined the fraud allegation; and an email by a former director did not raise a triable issue as to whether the agreement had been fixed. Abuse of process was not established. Accordingly the company’s strike-out application was dismissed and the petition may proceed.

Background and procedural posture:

• The application was a first instance hearing of Windrush Alliance UK CIC's attempt to strike out a winding up petition presented by TCPC Management Ltd following a statutory demand.
• The petition followed validation orders permitting Windrush to trade and three occasions on which the court allowed Windrush to make payments in the ordinary course.

Nature of the application and issues:

• The company sought dismissal of the petition on two principal bases: (i) that the petition debt was bona fide disputed on substantial grounds; and (ii) that the petition constituted an abuse of process.
• Specific issues were whether the Settlement Agreement crystallising historic liabilities was binding, whether the underlying arrangement was unlawful or a sham in breach of CIC asset-lock and regulatory constraints, whether the petitioner had sufficiently particularised the debt, and whether the petition was brought for an improper collateral purpose.

Facts and parties:

• Windrush Alliance UK CIC is a community interest company and registered provider of social housing supplying supported exempt accommodation, constrained by an asset-lock and regulator standards. The petitioner is a company controlled by Mr Ayo Jenyo which provided services under a Service Level Agreement (SLA) and later entered a Settlement Agreement with Windrush. The petition debt arose under the Settlement Agreement for unpaid sums.
• Background disputes included contested director conduct and litigation with a former chief executive, Mr Trevor Fothergill, culminating in a judgment in separate Chancery proceedings ([2023] EWHC 2729 (Ch)).

Court's reasoning (concise):

• The governing test was whether the debt was bona fide disputed on substantial grounds; the court was entitled to weigh the documentary evidence and draw adverse inferences where parties failed to call available evidence.
• The Settlement Agreement was a freestanding compromise containing a broad release (clause 5) and therefore removed the force of the company’s demands for further particulars or re‑characterisation of pre-existing liabilities.
• Allegations that the SLA and Settlement Agreement were unlawful or a fraudulent device to evade CIC/regulatory constraints had insufficient evidential foundation. The Regulator’s notice and governance concerns did not, of themselves, render the contractual obligations unenforceable and section 39 of the Companies Act 2006 prevented challenge to validity on internal constitutional grounds alone.
• Contemporaneous correspondence, subsequent payments by Windrush to the petitioner and the absence of explanatory evidence from key witnesses (notably the finance director involved in negotiations) undermined the company’s case that the petition debt was substantially disputed.
• Allegations of abuse of process (collateral purpose to pressurise the company in its dispute with the former chief executive) were not made out and, in any event, any such tactical timing had passed as a ground to dismiss the petition.

Conclusion: The strike-out application was dismissed and proceedings on the petition were permitted to continue; the court invited the parties to agree a form of order.

The company's application to strike out the winding up petition is dismissed and proceedings on the petition are permitted to continue. The court held that the petition debt, arising from the March 2023 Settlement Agreement, was not bona fide disputed on substantial grounds and that abuse of process was not established. The Settlement Agreement constituted a comprehensive compromise and release; regulatory and asset-lock concerns did not, without more, render the debt unenforceable; and the company’s evidential case was insufficient to raise a substantial triable issue.