Claims against guarantor

Octagon Assets Ltd v Remblance and another [2009] EWCA Civ 58; TLR 27 July

Rule 6.5 (4)(d) of the Insolvency Rules 1986 granted a residual discretion normally exercised in circumstances making it unjust for a statutory demand to give rise to bankruptcy consequences. It is difficult to conceive of circumstances where ability to pay could be the sole or principal reason for refusing to set aside a statutory demand, as the judge had found in the present case. Further, to allow the claimant to proceed against the guarantor by the insolvency route if it could not so proceed against the tenant, effectively the guarantors alter ego would also be unjust. The obligations upon a tenant and guarantor are co-extensive, and there were no good reasons for distinguishing between the position in this case and that which would have obtained had the tenant applied under r6.5(4)(a) of the 1986 Rules to set aside a statutory demand.