Cases - Re Environmental Services Ltd
Record details
- Name
- Re Environmental Services Ltd
- Date
- (2001)
- Legislation
- Keywords
- Outstanding interim payment - gross claim
- Summary
-
This case involved a winding up petition following an outstanding interim payment.
Celcius Energy Control Ltd. ('Celcius') presented a petition for the winding up of AM Environmental Service Ltd. ('Environmental'). Celcius was Environmental's sub-subcontractor under a construction project. The petition was based on a debt of £8,834.43 plus VAT. Celcius claimed that this sum was due under an application for an interim payment, in respect of which Environmental had not served any withholding notice. Environmental claimed that it had various counterclaims.
Held, by Mr Justice Hart: By reason of the Housing Grants, Construction and Regeneration Act 1996, at the date of the petition, Environmental was indebted to Celcius in the sum claimed. However, if a company has a genuine and serious cross claim in an amount exceeding the petitioner's debt which it has been unable to litigate, then in the absence of special circumstances the court ought to stay or dismiss the petition. In this case, Environmental did have a genuine and serious cross claim. Environmental gave three reasons for not having litigated its cross claim. First, it had proceeded under the misconceived view that it had no present liability to Celcius and therefore was under no pressure to rush to litigate its cross claim. Secondly, it did not know the quantum of the claim being made against it by the main contractor, which it would be passing onto Celcius. Thirdly, Environmental had only recently begun to canvas the claim in correspondence. Mr Justice Hart was satisfied that Environmental had not had a reasonable opportunity to litigate its cross claim and had not acted unreasonably in not having litigated it at the date of the petition. He held that a company should not be criticised for delaying the pursuit of its cross claim by adjudication, arbitration or litigation until after it had put the details of that cross claim to the other party.
See Re a Company No 1299 of 2001 (June 2001) CILL, where on different facts it was held that the company had had a reasonable opportunity of litigating its cross claim.