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Stein so that he could pursue it. Blake argued that the assignment could not
take place until his own counterclaim had been set off i.e. an account was to be
made of the extent to which each of the two parties was liable to pay the other.
The House of Lords concluded that where a trustee in bankruptcy had
automatically acquired a claim to a net balance following set off, he could assign
that net balance back to the bankrupt. As part of his rationale Lord Hoffmann
contrasted the position between (1) the statutory set off provisions which
created a machinery allowing for creditors' claims against an estate to be
accelerated i.e. estimated for the purposes of set off, and (2) a debtor's future
or contingent debt due to the insolvent where no such machinery exists and
therefore it cannot be estimated. This proposition is now qualified in the case of
corporate insolvency in Rule 4.90(8) of the Insolvency Rules 1986 which came
into force by amendment on 1 April 2005.
Stocznia Gdanska SA v Latreefers Inc & Others [2000] C.P.L.R. 65. Latreefers
was a company incorporated in Liberia. Judgment was obtained by Stocznia
Gdanska ("SG") for US$11 million in respect of certain shipping contracts and
petitioned to wind‐up Latreefers in the UK. There were two aspects to this case
(1) the question of whether a Liberian company could be put into liquidation in
the UK and (2) whether another party could be ordered to pay costs. We are
concerned with (1). Latreefers appealed against the winding‐up order saying
that the judge did not have jurisdiction to make the order as Latreefers had no
assets in the UK and also it had not been shown that SG would benefit from the
winding‐up in the UK. The Court of Appeal held that it was not a precondition to
the winding‐up of a foreign company that it should have assets in the UK. Given
the existence of possible claims for misfeasance in wrongful trading as well as
fraudulent trading against Latreefers' directors, it was possible that the windingup
would bring about a benefit to SG and Latreefers' other creditors. This case
was referred to in the case of Drax Holdings Ltd [2003] EWHC 2743 (CH)
summarised below.
Transit Casualty Co (In receivership) v Policyholders Protection Board [1992] 2
Lloyd's Rep. 358 (Note). This case relates to the estimation of creditors' "long
tail" claims against an insolvent insurance company. Five insurance companies
proposed a Scheme of Arrangement under the then applicable S.425 of the
Companies Act 1985 (now Part 26 of the Companies Act 2006). In view of the
fact that creditors' "long tail" claims would not be ascertained until long after a
typical policy had expired, the Policyholder Protection Board which, on a
liquidation of the company stepped in to pay policy holders in full, needed to
know the value of such claims. The court heard representations from the
Policyholders' Protection Board and the companies in question. One of the
points which the Court had to consider was whether the Insurance Companies
(Winding‐Up Rules) 1985 (now replaced by the Insurers (Winding‐Up) Rules
2001) (the 2001 Rules) were a "complete and exhaustive code" for the valuation
of claims. The court held that such rules did amount to such a code and that
such "long tail" liabilities were to be valued under Paragraph 2(b) of Schedule 1
by applying a just estimate of those claims. The 2001 Rules in this respect are
identical to the 1985 Rules so that this case continues to apply.
UIC Insurance Co Ltd (In Provisional Liquidation), Re [2007] B.P.I.R. 589. The
provisional liquidators of UIC Insurance Co Ltd applied to fix their remuneration
for two periods. The court found that many of the provisional liquidators' fees
were excessive and often disproportionate. As a result, the court imposed a
reduction on the amount which was to be paid to the provisional liquidators.