Cornhill Insurance plc v Improvement Services Ltd
Encyclopedia
Cornhill Insurance plc v Improvement Services Ltd [1986] 1 WLR 114 is a UK insolvency law
case concerning the presentation of a winding up petition.
to their building form their insurers, Cornhill Insurance plc (now part of Allianz
after a takeover in 1986). £65000 was paid out already under the insurance policy. The solicitors of Improvement Services Ltd agreed with the loss adjusters at Cornhill that £1,154 was owed still: for some damage to plaster and damage to an injection machine lance. But Cornhill was not paying up. The solicitors repeated demands. They were not heard. So they went to the Chancery Court and presented a petition to wind up the company on the ground that it was insolvent under the Insolvency Act 1986
ss 122(f) and 123(1)(a). Straight away Cornhill Insurance claimed that Improvement Services was engaged in frivolous, vexatious litigation
and applied for an injunction
to restrain the winding up petition. It brought to the court its accounts, showing how much money it had. It was granted an interim injunction, but the matter still needed to be given a full hearing on continuing the injunction.
Cornhill Insurance's debt was paid very sharply after this decision.
UK insolvency law
United Kingdom insolvency law deals with the insolvency of firms and individuals in the United Kingdom. The important statutes are the Insolvency Act 1986, as amended by the Enterprise Act 2002, as well as the Company Director Disqualification Act 1986 and the Companies Act 2006.Insolvency is a...
case concerning the presentation of a winding up petition.
Facts
Improvement Services Ltd claimed money under an insurance policy covering damage by fireFire
Fire is the rapid oxidation of a material in the chemical process of combustion, releasing heat, light, and various reaction products. Slower oxidative processes like rusting or digestion are not included by this definition....
to their building form their insurers, Cornhill Insurance plc (now part of Allianz
Allianz
SE is a global financial services company headquartered in Munich, Germany. Its core business and focus is insurance. As of 2010, it was the world's 12th-largest financial services group and 23rd-largest company according to a composite measure by Forbes magazine.Its Allianz Global Investors...
after a takeover in 1986). £65000 was paid out already under the insurance policy. The solicitors of Improvement Services Ltd agreed with the loss adjusters at Cornhill that £1,154 was owed still: for some damage to plaster and damage to an injection machine lance. But Cornhill was not paying up. The solicitors repeated demands. They were not heard. So they went to the Chancery Court and presented a petition to wind up the company on the ground that it was insolvent under the Insolvency Act 1986
Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
ss 122(f) and 123(1)(a). Straight away Cornhill Insurance claimed that Improvement Services was engaged in frivolous, vexatious litigation
Vexatious litigation
Vexatious litigation is legal action which is brought, regardless of its merits, solely to harass or subdue an adversary. It may take the form of a primary frivolous lawsuit or may be the repetitive, burdensome, and unwarranted filing of meritless motions in a matter which is otherwise a...
and applied for an injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
to restrain the winding up petition. It brought to the court its accounts, showing how much money it had. It was granted an interim injunction, but the matter still needed to be given a full hearing on continuing the injunction.
Judgment
Harman J refused the continuing injunction on the substantive hearing holding that the defendants were entitled to present a petition.Cornhill Insurance's debt was paid very sharply after this decision.
See also
- Mann v Goldstein [1968] 1 WLR 1091
- Re a Company (No 012209 of 1991) [1992] 1 WLR 351
- Taylor's Industrial Flooring Ltd v M&H Plant Hire (Manchester) [1990] BCC 44
- In re A Company (1950) 94 SJ 369