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The Judge (Roger Kaye Q.C.) allowed R's application to strike out the windingup
Petition on the basis that there were complex issues to be tried showing that
R bona fide disputed the Petitioner's claims on serious grounds. Obiter, the
Judge did say that in the context of winding‐up "paid" must mean "liable to
pay" even if the assured only receives a dividend of its claim. If this had been the
only issue, the petition would not have been struck out. However, there was
also the dispute relating to whether valuation amounted to a "loss settlement"
or "compromise settlement". In that regard, the Judge also made an obiter
reference to the reasonableness in principle of a "loss settlement" embracing
IBNR and outstanding claims such that they could form the basis of a windingup
order. (See also Cleaver v Delta American Reinsurance Co (In Liquidation)
summarised below.
Banco de Portugal v Waddell (1880) 5 App. Cas 161. One company which carried
on business in both England and Portugal became insolvent. Prior to its
insolvency the company had issued bills of exchange. The question before the
Court of Appeal in this case, was whether the creditors holding such bills could
prove in both the English and Portuguese proceedings. The court held that, by
virtue of section 37 of the Bankruptcy Act 1869, the creditors were not
permitted to double proof. They held that such a double proof was permissible
only under the legislation when there were two distinct estates to be wound up.
In this case, there was one business only which happened to be carrying on in
two places. This meant that if there was a surplus after the creditors were
satisfied in Portugal then the surplus would belong to the English trustee of the
estate (i.e. the estates were not separate). As such, the creditors could not
prove in the English proceedings without giving credit for the amount they
received in the Portuguese proceedings.
Re Bank of Credit and Commerce International SA (No. 9) [1994] 2 B.C.L.C 636.
The English appointed liquidators of BCCI, a company incorporated in
Luxembourg, and one of its affiliate companies were granted a worldwide
Mareva injunction against two foreign individuals, M and K. It was alleged that
M and K we accomplices to frauds committed by senior BCCI executives. The
liquidators gave an undertaking to the English court that they would not utilize
the Mareva injunction anywhere other than England without leave of the
English Court. M and K appealed this decision and asked that the undertaking be
extended to the commencement of proceedings in other jurisdictions. The
Court of Appeal found that the liquidators should not be hindered from
providing information in the prosecution of fraud. However, it also found that in
order to prevent multiple suits the English court's permission should be sought
in order to commence proceedings in jurisdictions other than Luxembourg.
Bradley v Eagle Star [1989] A.C. 957. This was an appeal to the House of Lords
concerning at what point an insured's right to claim under a liability policy will be
transferred to a third party under the Third Parties (Rights against Insurers) Act
1930 (the 1930 Act). The purpose of the 1930 Act is to give a third party claimant
against an insured the right to claim on that insured's liability policy in place of
the insured when the insured becomes insolvent. This means that the third
party can be paid in full in respect of his claim rather than the insurance
proceeds falling into insured's estate. In this case, Bradley had been employed
by a cotton mill from 1933 to 1970. In 1970, he was diagnosed with byssinosis, a
disease caused by inhaling cotton dust. The mill was wound up in 1975 and the
company dissolved in 1976. In 1984 Bradley brought a claim against Eagle Star,
the mill's liability insurers, on the basis that the mill's right to claim on its Eagle
Star policy had been transferred to Bradley under the 1930 Act. He sought preaction
disclosure of the Eagle Star policy, which is a right given to third party
claimants under the 1930 Act. The House of Lords ruled that a third party did not
receive rights under the 1930 Act until that third party had established the