Restraining a petition

Moorside Investments Ltd v DAG Construction Ltd (2007) ChD 1 November 2007

The existence of a genuine and substantial cross-claim, just as much as a defence would, ordinarily entitled a company to injunctive relief to prevent advertisement of a winding-up petition and would justify the dismissal of a petition that had in fact been advertised. That was not a rule of law, but of practice, and although exceptional circumstances would produce a different result, there was nothing in the instant case that amounted to such a special circumstance. Both sides had claims that could not be ruled out as frivolous, and the claim for additional financing costs was a genuine and substantial cross-claim. In those circumstances, it would be appropriate to restrain presentation of a winding-up petition.