Can previous unsuccessful arguments be repeated at a hearing to set aside a second identical statutory demand?

In the recent decision of Harvey v Dunbar Assets Plc [2015] EWHC 3355 (Ch) (26 November 2015) the high court held that a debtor who unsuccessfully raised an argument at an application to set aside a statutory demand (and abandoned the argument on appeal) could not raise the same argument again at the hearing of an application to set aside a second statutory demand based on the same debt.

There being no direct authority on whether a debtor could repeat earlier arguments, made in relation to a previous statutory demand, in respect of a new statutory demand, the court concluded that absent special circumstances (which were not present in this case) the debtor could not raise those arguments again.

Whether the result was based on res judicata, issue estoppel or the authority of Turner v Royal Bank of Scotland Plc [2000] B.P.I.R. 683, the result was the same: repeat litigation on the same point and the same material should be avoided in the public interest.

The court did not make clear the special circumstances in which it would be acceptable to raise an identical argument to set aside a second statutory demand but this case highlights the importance of debtors obtaining legal advice at the earliest opportunity in order to ensure that any application to set aside a statutory demand is properly made out in the first instance and bankruptcy is avoided.

For further information about this case or any insolvency enquiries please contact our insolvency specialist, Lauren Hartigan-Pritchard, on 01905 677051 or lhartiganpritchard@thursfields.co.uk

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