Dusoruth v Orca Finance UK Ltd (in liquidation)

Lance Ashworth KC and Wilson Leung, instructed by Stephenson Harwood LLP, acted for the successful respondent in Dusoruth v Orca Finance UK Ltd (in liquidation) [2022] EWHC 2346 (Ch).

In this instructive judgment, ICC Judge Mullen clarified the requirement, contained in section 267(2) of the Insolvency Act 1986, that the debt upon which a bankruptcy petition is founded must be for a “liquidated” sum. He held in particular that a claim for restitution based on unjust enrichment was, by its nature, not for a “liquidated” sum. This is so even if the creditor can specify an exact amount for the claim.

Hence, when drafting a bankruptcy petition, practitioners should check that the petition debt is for a liquidated sum, especially where the claim is not based on a straightforward money debt.

However, ICC Judge Mullen proceeded to hold that, even if the petition debt was not for a liquidated sum but the bankruptcy order was made, and the bankrupt subsequently applies to annul the bankruptcy order, the court still has a discretion whether to annul. On the facts of this case, he decided not to annul, based on the bankrupt’s uncooperative attitude and the existence of other indisputable creditors.

View the judgment here.