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Mulalley and Co Ltd v Regent Building Society Ltd (2017)

The respondents (the building society and a Christopher White) served a statutory demand on the company, on the basis of debts which had allegedly been assigned to one of the respondents by a subcontractor of the company, who had presented a winding up petition prior to the purported assignment.

The company disputed the debts on the grounds that under the written agreement between the company and its subcontractor, the assignment could not take place without the company’s consent. At the time of the statutory demand, some of the debts had not fallen due, and others had been paid already. The authenticity of the assignment agreement was also disputed.

The company sought an injunction against the respondents presenting a petition based on the statutory demand.

The High Court noted that the threshold for the granting of such an injunction was low, and that the court did not need to determine if the dispute was valid. It was held that the challenge to the debt must merely be in good faith and have sufficient substance to justify it.

An injunction was granted, as it was held that each of the grounds for dispute were sufficiently substantial and the arguments were in good faith.

Posted: 01.03.2018
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