Jurisdiction(s):
United Kingdom

AFP Assets v Hugill: High Court (England and Wales) permits reliance on unstated existing breaches to justify termination and emphasises debtor’s burden on applications to set aside statutory demands

Published on: 18 February 2025

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

AFP Assets Ltd v Hugill and others [2025] EWHC 256 (Ch) What are the practical implications of this case?

This judgment is a timely reminder for practitioners across diverse fields of the principle in Reinwood Ltd v L Brown & Sons Ltd [2008] EWCA Civ 1090: a party bringing a contract to an end may later uphold that step by relying on facts that existed at the time but were not articulated in the termination notice. In this case, those matters were known to the parties when the notice was given, although that is not a prerequisite; frequently they are not known then, hence their omission. As such, the point can be a potent tool for a terminating party facing a challenge to its notice, and it is certainly something advisers to recipients should keep in mind. It therefore pays both those issuing and those receiving termination notices to consider what contemporaneous, albeit unmentioned, grounds may support or undermine the step. A second headline from the decision is of greater relevance to those working in insolvency. The underlying facts and the determination on appeal restate the principles applicable to applications to set aside statutory demands—long‑established, yet often blurred in day‑to‑day practice...

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