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Peart -v- Promontoria [2018] CSIH 35

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Peart -v- Promontoria [2018] CSIH 35


22 May 2018

The Inner House issued its opinion today in the case of Peart & Others -v- Promontoria (Henrico) Limited. Promontoria, had bought the pursuer’s debt from Clydesdale Bank plc. It called up the debt and served a charge for payment. The charge expired and the pursuers then sought reduction of the charge and interdict against Promontoria preventing it from sequestrating them. Lady Wise granted interim interdict. Promontoria reclaimed. It argued that the Bankruptcy (Scotland) Act 2016 set out a complete and exhaustive code which prevented the Court exercising a general equitable jurisdiction to prevent sequestration once a debtor’s apparent insolvency had been constituted. The Court rejected that argument and held that it retained an over-riding general equitable discretion to intervene where exceptional and limited circumstances required it, even where a debtor on whom a charge had been served had allowed the days of charge to expire (para [53]). This is an important clarification of the Court’s retained equitable powers in the field of insolvency law. Gavin Walker QC, of Axiom was instructed for the Pearts. Ruth Crawford QC and Susan Ower, both of Axiom, were instructed for Promontoria.