Lewis Preston successfully resisted a High Court appeal relating to the rejection on paper of an application to set aside a statutory demand.

14th March 2014

Zafar v Waltham Forest LBC
WF served a statutory demand upon Z based on council tax liability orders. Z applied to have the statutory demand set aside, stating that she was appealing the liability orders on the ground that she did not live in the relevant property. That application was dismissed on paper at first instance on the basis that the court would not look behind the liability orders.

Z, then a litigant in person, was given permission to appeal that decision, inter alia on the basis that the bankruptcy court was wrong not to have adjourned the hearing of the application to set aside until the hearing of her appeal or that it was wrong not to have granted a hearing to allow Z to explain her case.

WF successfully argued that, where there was a liability order, the bankruptcy court could deal with the matter on paper and ought not to adjourn unless there was cogent documentary evidence in support of an extant appeal; a mere assertion by Z in her evidence in support of the application was insufficient.

Whereas previously the court had allowed a full investigation into the substance of a debt at both statutory demand and petition stages, now, if the debtor has become subject to a liability order or judgment, the court will prefer to adjourn at the petition stage, when the property of the debtor is secure.