An important appeal court ruling on insolvency matters was made last month in a joint decision on two cases: Bresco Electrical Services Ltd (in liquidation) vs Michael J Lonsdale (Electrical) Ltd and Cannon Corporate Ltd and Primus Build Ltd [2019] EWCA Civ 27.

In the Bresco appeal, Bresco was in insolvent liquidation where the Insolvency Rules mutual debit, credit and set-off provisions automatically applied, the practical effect of which is that an account must be taken by the liquidator of what is due to or from the company and a creditor to produce a single figure for payment. Lonsdale argued that the effect of Bresco being in liquidation meant these provisions applied such that only the Bresco liquidator had the jurisdiction to determine that single payment figure, and that Bresco’s attempt to do this by way of adjudication was inappropriate because an adjudicator had no jurisdiction to perform that exercise. Lonsdale therefore sought an injunction to prevent the adjudication from proceeding, and a declaration that the adjudicator had no jurisdiction. 

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