NW Publishing UK Ltd v Newsweek Publishing LLC

Presenting a winding-up petition for a debt which is disputed is an abuse of process and a high-risk strategy. A debtor may seek injunctive relief for the disputed part of a statutory demand even if it pays another component. A later undertaking does not retrospectively make the application unreasonable where the proposed petitioner had rejected the dispute and supplied only a short, time-limited confirmation. In a without-notice application, materiality is assessed objectively by asking whether the omitted matter could have influenced the decision to grant relief or its terms, and whether the presentation was fair in all material respects. An alternative legal analysis or immaterial detail is not material non-disclosure. Indemnity costs were appropriate.

The applicant sought an injunction restraining the respondent from presenting a winding-up petition based on two sums in a statutory demand. The injunction was granted without notice on 5 August 2025. The respondent later gave a permanent undertaking not to present a petition, so the remaining issue was costs.

The respondent argued that the injunction application was unnecessary, that the applicant had failed to comply with the duty of full and frank disclosure, and that the applicant had acted unreasonably in refusing an offer of no order as to costs. The court had to determine whether the applicant was entitled to seek relief in relation to the disputed part of the debt, whether any alleged non-disclosure was material, and what costs order was appropriate.

Disposition. The applicant was awarded its costs on the indemnity basis. The later permanent undertaking made the injunction unnecessary, but did not alter the costs analysis.

1. Costs are discretionary. Under Civil Procedure Rules 1998 CPR 44.2(1), the general rule that the unsuccessful party pays the successful party may be displaced after considering the circumstances, including the parties’ conduct, partial success and reasonable settlement offers.
2. The respondent had chosen to base its statutory demand on two separate debts. It knew the grounds on which the rent deposit debt was disputed, rejected the existence of any dispute, and provided only a short, time-limited confirmation that it would not present a petition. The applicant was therefore entitled to seek injunctive relief in relation to the disputed debt.
3. The court applied the approach illustrated by Re A Company (No 0012209 of 1991) [1992] 1 WLR 351: presenting a petition for a debt known to be disputed is an abuse of process and a high-risk strategy capable of justifying indemnity costs. Paying the settlement sum to the landlord did not prevent relief being sought in respect of the separately disputed rent deposit debt.
4. The duty of full and frank disclosure is high, but materiality is assessed objectively. A matter is material if it would have influenced the judge in deciding whether to make the order or the terms on which it should be made. The question is whether the application was fairly presented in all material respects. The court found no material non-disclosure. Details of the payment to the landlord, the respondent’s earlier conduct and its alleged willingness to give an undertaking did not affect the material issue, namely whether the rent deposit debt was disputed. The distinction between an implied term and a gift or loan was a merits issue, not a disclosure failure. The applicant was not unreasonable in rejecting the earlier no-order costs offer.

No appellate history is stated in the judgment.