Portland Stone Firms Limited v Albert Goodman LLP

On an application to restrain advertisement of a winding-up petition, the court need not determine the precise amount of the debt. The relevant question is whether an indisputable debt exceeding the statutory minimum is owing and is not bona fide disputed on substantial grounds. A creditor may proceed where the evidence establishes such a debt, even though the exact sum remains uncertain and the company appears solvent. The court should avoid conducting the full merits assessment appropriate to the petition hearing. Non-payment of an undisputed debt exceeding £750 may provide both creditor status and evidence supporting an allegation that the company cannot pay its debts. The injunction application was therefore refused.

Portland Stone Firms Limited applied to restrain Albert Goodman LLP from advertising a winding-up petition based on two unpaid invoices for accountancy services. The company argued that the invoices represented unliquidated claims for reasonable remuneration and that the alleged June 2023 payment arrangement did not convert them into a liquidated sum. It also argued that the debt was disputed on substantial grounds and that the company was solvent.

An interim injunction had previously been granted. On the return application, the central issues were whether more than £750 was indisputably owing and whether the petition could properly proceed despite uncertainty about the precise amount and the company’s evidence of solvency.

1. Application refused. The interim injunction restraining advertisement of the petition was continued until judgment and then discharged.
2. The court did not need to determine whether the June 2023 arrangement was a binding agreement which converted the invoices from unliquidated to liquidated claims. That issue remained suitable for determination elsewhere and was not necessary to dispose of the injunction application.
3. For an application to restrain advertisement, the court should identify whether an indisputable debt exceeding £750 is owing and is not bona fide disputed on substantial grounds. The court need not determine the precise sum or conduct the full accounting exercise required at the petition hearing.
4. On the evidence, more than £750 was plainly owing. The company’s objections were late, selective and unlikely to reduce the amount due below the statutory minimum. They therefore did not establish a substantial dispute sufficient to restrain advertisement.
5. The combined effect of Harada Limited, Berkeley Credit & Guarantee Limited v Commissioners for Her Majesty’s Revenue and Customs, Cornhill Insurance plc v Improvement Services Ltd, Wolf Rock (Cornwall) Ltd v Langhelle and Angel Group Ltd v British Gas Trading Ltd was that the respondent was a creditor for the purposes of Insolvency Act 1986, notwithstanding uncertainty about the exact amount.
6. Non-payment of an undisputed debt exceeding £750 was sufficient to give the respondent locus standi to present the petition and to support an allegation that the company could not pay its debts. Evidence that the company was probably solvent did not justify restraining advertisement. The application was accordingly refused.

First-instance decision. No prior appellate decision is stated in the judgment.