''Re Gray’s Inn Construction Co Ltd''
9801 WLR 711 is a leading
UK insolvency law
United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...
case, concerning the cessation of transactions without court approval after a winding up petition.
Facts
Gray’s Inn Construction Co Ltd was a building business, which did a number of small jobs. When one of its creditors, Field-Davis Ltd presented a petition, it was ordered to be wound up by the court. Between the petition date and the court order date, its bank, Natwest (
Tavistock Square
Tavistock Square is a public square in Bloomsbury, in the London Borough of Camden.
History
Tavistock Square was built shortly after 1806 by the property developer James Burton and the master builder Thomas Cubitt for Francis Russell, 5th Duke ...
branch) allowed it to operate its account. It traded unprofitably.
Judgment
Buckley LJ declined to validate most of the transactions and gave guidance on when they would or would not be
void
Void may refer to:
Science, engineering, and technology
* Void (astronomy), the spaces between galaxy filaments that contain no galaxies
* Void (composites), a pore that remains unoccupied in a composite material
* Void, synonym for vacuum, a ...
. He held that all transactions in and out of the bank account were ‘dispositions’ within the
Insolvency Act 1986
The Insolvency Act 1986c 45 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
The Insolvency Act 1986 followed the publication and ...
section 127 (at the time,
CA 1948
The Companies Act 1948 (11 & 12 Geo.6 c.38) was an Act of the Parliament of the United Kingdom, which regulated UK company law. Its descendant is the Companies Act 2006.
Cases decided under this Act
*''Bushell v Faith'' 970AC 1099
*''Scottish ...
s 227). The court should validate transactions to ensure that unsecured creditors will not be prejudiced, applications for specific transactions have to show proof there will be no prejudice, and the more speculative a transaction is, the more unlikely it should be approved. Applications to court need not be made if there is a need for speedy action and the beneficial character of the bargain is obvious. Sales of assets for full market value raise no concern.
Buckley LJ's judgment read as follows.
Goff LJ and
Sir David Cairns concurred.
Comment
The decision in ''Gray's Inn'' was treated as authoritative for many years, but it has now been effectively overruled and superseded by .
See also
*
UK insolvency law
United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...
*''
Coutts & Co v Stock''
000
Triple zero, Triple Zero, Zero Zero Zero, Triple 0, Triple-0, 000, or 0-0-0 may refer to:
* 000 (emergency telephone number), the Australian emergency telephone number
* "Triple Zero", a song by AFI (band), AFI from ''Shut Your Mouth and Open Your ...
1 WLR 906
*''
Hollicourt (Contracts) Ltd v Bank of Ireland
is a UK insolvency law case concerning whether a bank should pay restitution for moneys paid out of its account after a moratorium under the Insolvency Act 1986 section 127.
Facts
Hollicourt was a construction company and it went insolvent in 1 ...
''
000
Triple zero, Triple Zero, Zero Zero Zero, Triple 0, Triple-0, 000, or 0-0-0 may refer to:
* 000 (emergency telephone number), the Australian emergency telephone number
* "Triple Zero", a song by AFI (band), AFI from ''Shut Your Mouth and Open Your ...
EWCA Civ 263,
001Ch 555,
0011 BCLC 233
Notes
{{reflist, 2
References
*
United Kingdom insolvency case law
Court of Appeal (England and Wales) cases
1980 in case law
1980 in British law