Enfield Highway Development Limited v Park Estate Holidings Limited

The presentation of a winding up petition may be restrained where the company establishes, in good faith and on substantial grounds, that the debt is genuinely disputed or that a cross-claim exceeds the petition debt; however, the court will examine the evidence closely and will not restrain a petition where the asserted dispute or cross-claim lacks credibility, causation or sufficient quantum to neutralise the undisputed debt, save for discrete, legitimately contested elements of the creditor's claim (for example a disputed £15,000 item in an invoice).

The applicant company seeks an injunction to restrain a threatened winding up petition based on an alleged unpaid commission. The dispute centres on whether (1) the sale fell within the agent's contractual "Agency Period" or was governed by a later arrangement, (2) the contractually stated "Strike Price" was ever agreed, and (3) the company has a bona fide cross-claim for loss caused by the agent's alleged breaches exceeding the claimed commission. The court heard affidavits and detailed correspondence and was asked to determine whether the debt was disputed in good faith and on substantial grounds such that the petition should be restrained.

Overall disposition: The application for an injunction restraining presentation of a winding up petition is dismissed (see (1)–(6) below).

1. The correct legal approach is that a company may resist a creditor's petition by showing in good faith a substantial dispute as to the whole of the petition debt (or enough to reduce the undisputed part below the statutory threshold), but the court will scrutinise the evidence and will not allow mere clouds of objections to defeat a petition — the principles summarised in [2012] EWHC 2702 (Ch) (Angel Group v British Gas Trading Ltd) and authorities cited therein govern the exercise (see paras 6–7).
2. On the facts, the argument that the relevant introduction and commission were governed by a separate post‑Agreement arrangement (relying on a 30 June 2022 message) lacks credibility. The contemporaneous February 2023 correspondence proceeded on the basis of the Agency Period and the Agreement's mechanism (including references to Strike Price and 40% of commission). The purported alternative arrangement is inconsistent with the documentary record, the wording of the correspondence, and the parties' conduct (see paras 27–33).
3. There is, however, a limited, genuine factual dispute as to an element of the invoice: whether a £15,000 item described as for the car park was properly included. The invoices and the February 2023 correspondence support a real dispute between a balance of £39,180 and the revised figure of £54,180 (see para 34).
4. The challenge to the existence or enforceability of the Strike Price mechanism is unconvincing. The court finds the account that Schedule 2 (containing Strike Prices) was not part of the Agreement, or that Strike Prices were to be agreed later, inconsistent with contemporaneous documents and the commercial purpose of the pricing mechanism, as well as the Agreement's entire agreement clause (see paras 35–37).
5. The asserted cross‑claim for losses said to flow from the agent's management failures does not disclose a bona fide claim in quantum sufficient to defeat the petition. The applicant's evidence is largely assertionary, lacks contemporaneous particulars of the alleged breaches, does not demonstrate causation of the asserted refinancing losses, and fails to establish that the agent's conduct alone caused the delay. The court therefore concludes there is no substantial cross‑claim exceeding the petition debt (see paras 38–40).
6. Outcome and practical conclusion: the application is dismissed, save that there is a limited contested issue between £39,180 and £54,180 which remains a discrete factual contest; the evidence does not justify restraining presentation of a petition based on the full sum claimed by the creditor (see paras 41–42).