MBS Recovery Limited vs Kenneth George Quinney

High Court Dismisses Appeal on Statutory Demands in Debt Dispute

The High Court of Justice, Business and Property Courts of England and Wales, Chancery Appeals (ChD) delivered a judgment on 11 March 2025, dismissing an appeal by MBS Recovery Limited against Kenneth George Quinney. The case revolved around two statutory demands issued by MBS Recovery Limited, which were set aside by a lower court order.

The statutory demands, issued on 25 August 2023 and 4 September 2023, were based on different computations of the same debt, leading to inconsistencies in the amounts demanded. The demands were related to proceedings in the Business and Property Courts initiated by MBS Recovery Limited against Quinney, concerning the alleged appropriation of funds exceeding an agreed 50% share under a contract.

Quinney applied to set aside the statutory demands, and ICC Judge Burton granted the application on 18 March 2024. The appellant contended that the judge improperly used case management powers under the Civil Procedure Rules (CPR) rather than the insolvency framework of the Insolvency Act 1986 and Insolvency Rules 2016.

The appeal was heard by Mr Justice Marcus Smith, who examined the five grounds of appeal presented by MBS Recovery Limited. The first ground argued that the statutory demands did not relate to a certain and ascertained sum of money. The second ground contested the use of CPR for the set-aside application, while the third and fourth grounds challenged the clarity of the statutory demands. The fifth ground concerned the summary assessment of costs.

Justice Smith dismissed the appeal, finding that the judge acted within her insolvency jurisdiction under the Insolvency Act 1986 and Insolvency Rules 2016, not the CPR. He noted that the statutory demands were parasitic on the pleadings in the Business and Property Courts proceedings but were not part of those proceedings.

The judge highlighted the tenuous link between the statutory demands and the underlying pleadings, which justified the lower court's decision to set aside the demands. He concluded that the demands were insufficiently clear and did not meet the requirements of section 267 of the Insolvency Act 1986.

Consequently, Justice Smith dismissed all grounds of appeal, upholding the original order to set aside the statutory demands and the associated costs order. The decision underscores the importance of clarity and certainty in statutory demands and the appropriate use of insolvency procedures.

Learn More

For more information on insolvency proceedings, see BeCivil's guide to Contractor Law.