LexisLibrary and LexisPSL
Sign up for a free trial today and get full access for a weekTrial
It has been announced that the Lord Neuberger is to replace the Lord Phillips as President of the Supreme Court of England and Wales on the Lord Phillips' retirment. This provides an opportune moment to review some of the insolvency related decisions/opinions that the Lord Neuberger has given whilst sitting as the Master of the Rolls and before. A cursory search of Westlaw reveals some 91 judgments that feature the terms 'insolvency' and 'Neuberger.' The term 'bankruptcy' reveals 20 hits. We can now examine some of the more important decisions to assess the Lord Neuberger's contribution to the insolvency jurisdiction.
Perhaps the most notable recent judgment is that of HIH Casualty & General Insurance Ltd  UKHL 21;  1 W.L.R. 852, a case which concerned s.426 of the Insolvency Act 1986 and the English assets of four insolvent Australian insurance companies, in compulsory liquidation in Australia and in provisional liquidation in England. Lord Neuberger's judgment commences at paragraph 64. In terms of the substance of the case and the issue to be decided regarding control of assets in the two jurisdictions (England and Australia) he notes, "Your Lordships all agree that the answer is that the assets should be remitted for distribution in accordance with the Australian insolvency regime..." For general readers perhaps the most interesting part of the judgment relates to Lord Neuberger's very succinct summary of the principles and distribution pursuant to the English regime. He notes:
"The main substantive features of the English insolvency regime in relation to unsecured creditors can be broadly summarised as follows. First, preferential creditors (listed in Schedule 6 to the 1986 Act) enjoy priority on a pari passu basis as between themselves ( sections 175 and 386 of the 1986 Act). Secondly, all other creditors rank behind them, also on a pari passu basis as between themselves ( rule 4.181 of the 1986 Rules). Thirdly, there is a mandatory set-off requirement ( rule 4.90 of the 1986 Rules) as explained by Lord Hoffmann (albeit in a bankruptcy context) in Stein v Blake  1 AC 243."
Another interesting insolvency case that Lord Neuberger gave judgment in is Inland Revenue Commissioners v The Wimbledon Football Club Ltd & Ors  EWHC 1020 (Ch),  B.C.C. 638. His judgment involves a very thorough exposition of the CVA regime and a specific CVA proposal. Perhaps one of the most interesting parts of the judgment though relates to the nature of CVAs. He notes: "...the CVA regime is intended to be an additional, and particularly flexible, option in the case of corporate insolvency, in addition to liquidation, administration and administrative receivership. Secondly, a particular feature of a CVA is that any proposal can include, or be based on, moneys or other assets belonging to persons other than the company concerned
In what may be one of his last insolvency judgments as Master of the Rolls, the Lord Neuberger had to address the following question in Hunt v Aziz (Harb intervening)  EWCA Civ 1239,  1 W.L.R. 317: "If a trustee in bankruptcy assigns a claim on terms that the bankrupt's estate will receive a share of any recovery on the claim, can he safely assume that no order for costs will be made against him if the claim fails?" It was held that, "if the trustee wished to pursue a claim which the bankrupt had had before the bankruptcy he would do so in his own name; that, like any other trustee pursuing litigation on behalf of a trust, the trustee in bankruptcy would in those circumstances in principle be liable for the costs of the proceedings, both his own and, if the claim failed, those of the successful party; that, therefore, it would be wrong in principle and unfair on a defendant, where a claim had been transferred by a trustee to an assignee on terms that the trustee would receive a substantial proportion of the proceeds if the claim were successful, to be precluded in advance from contending that the trustee was liable for costs on the basis that the claim had been pursued for his benefit."
As noted above there are many more judgments. A paper to follow perhaps!
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...