CR-2024-006692 - [2025] EWHC 2120 (Ch)

There was no disagreement between the parties as to the applicable principles on restraining petitions. It is well-settled that the court will restrain a petitioner from presenting a winding up petition where the debt on which the petition is based is disputed on genuine and substantial grounds. In Angel Group Ltd v British GasTrading Ltd [2012] EWHC 2702 (Ch), Norris J gave this wellknown summary at [22]:

“The principles to be applied in the exercise of this jurisdiction are familiar and may be summarised as follows:-

a)

A creditor’s petition can only be presented by a creditor, and until a prospective petitioner is established as a creditor he is not entitled to present the petition and has no standing in the Companies Court: Mann v Goldstein [1968] 1WLR 1091.

b)

The company may challenge the petitioner’s standing as a creditor by advancing in good faith a substantial dispute as to the entirety of the petition debt (or at least so much as will bring the indisputable part below £750).

c)

A dispute will not be “substantial” if it has really no rational prospect of success: in Re A Company No.0012209 [1992] 1WLR 351 at 354B.

d)

A dispute will not be put forward in good faith if the company is merely seeking to take for itself credit which it is not allowed under the contract: ibid. at 354F.

e)

There is thus no rule of practice that the petition will be struck out merely because the company alleges that the debt is disputed. The true rule is that it is not the practice of the Companies Court to allow a winding up petition to be used for the purpose of deciding a substantial dispute raised on bona fide grounds, because the effect of presenting a winding up petition and advertising that petition is to put upon the company a pressure to pay (rather than to litigate) which is quite different in nature from the effect of an ordinary action: in Re A Company No.006685 [1997] BCC 830 at 832F.

But the court will not allow this rule of practice itself to work injustice and will be alert to the risk that an unwilling debtor is raising a cloud of objections on affidavit in order to claim that a dispute exists which cannot be determined without cross-examination (ibid. at 841C).

The court will therefore be prepared to consider the evidence in detail even if, in performing that task, the court may be engaged in much the same exercise as would be required of a court facing an application for summary judgment: (ibid at 837B).”

I have also been referred to the summary of principles in the decision of Deputy ICCJ Kyriakides in Sandstone Legal Limited v. Curzon Claims Limited t/a Clockwork Claims [2025] EWHC 363 (Ch) at [16]. At [16.8], the Deputy Judge noted the well-known principle that “the court will also restrain a company from presenting a winding up petition in circumstances where there is [a] genuine and substantial cross-claim that exceeds any part of the petitioner’s claim which is undisputed.”

In considering any witness statement evidence before the court, it has been held that it would be open to the court to reject that evidence if it was inherently implausible or if it was contradicted, or was not supported, by contemporaneous documentation: Collier v P & MJ Wight (Holdings) Limited [2007] EWCA 1329 at [21].