Jurisdiction(s):
United Kingdom

Statutory demand upheld: arbitration clause superseded by entire agreement; personal liability and promissory notes affirmed; duress, undue influence and misrepresentation rejected (Staveley v Restis) [2024] EWHC 670 (Ch)

Published on: 09 April 2024

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Staveley v Restis [2024] EWHC 670 (Ch)

What are the practical implications of this case?

This decision offers a timely illustration of the court’s approach to applications to set aside a statutory demand. Although it is enough to establish a dispute on substantial grounds, that does not mean any merely arguable point will do. Rather, as this ruling shows, the evidential material put forward to support the alleged dispute will be tested with care. In the face of contemporaneous records, the court may find that account inherently unlikely. The judgment also underlines that, while arbitration clauses are generally upheld in insolvency proceedings, a respondent may contend that the clause no longer subsists. A later agreement revising lending terms can, where it includes an entire agreement provision, achieve that result.

What was the background?

The application related to a statutory demand seeking £36,841,287.12, being a £10m loan together with accrued interest. The advance was made in 2008 to the applicant’s companies (the ‘companies’) or, it was alternatively alleged, to her personally. No formal loan contract existed. After certain repayments, the applicant and the companies acknowledged the remaining sum due as outstanding and payable on the figures recorded at the relevant time...

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