Cornhill Insurance plc v Improvement Services Ltd, 1986 1 WLR 114
Citation:Cornhill Insurance plc v Improvement Services Ltd, 1986 1 WLR 114
Link to case on WorldLII (refence).
Rule of thumb:If an organisation is sent a very large bill and does not respond to it, can bankruptcy proceedings be lodged or do they have to be warned of this? Sometimes a winding up petition bankruptcy proceedings can be lodged without warning if an organisation does not respond at all to a bill sent for a very large debt.
Judgment:
The Court in this case held that the failure to respond to an invoice and invoice reminder meant that the party was stating that they were unable to pay it. In this scenario insolvency proceedings could legitimately be raised, ‘When a company was under an undisputed obligation to pay a specific sum and failed to do so, it could be inferred that it was unable to do so; that accordingly, the defendants could properly swear to their belief in the plaintiff company’s insolvency and present a petition for its winding up’, Harman J.
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.