The decision deals with the difficult interrelationship between Tomlin Orders (compromise generally), guarantees and the liability of guarantors when the principal debtor has compromised a claim.
Simon’s clients had settled a significant dilapidations claim against the former tenant company, culminating in a Tomlin Order in December 2021 following mediation. When the tenant failed to pay what had been agreed, the Tomlin order was enforced by application to the High Court and then the sums demanded from the guarantor in the usual way.
Incidentally the guarantor and the tenant were owned by the same person, who was the sole director.
Simon successfully contended that the guarantor was not entitled to argue that the debt was substantially in dispute and therefore his clients should be entitled to present a winding up petition.
The guarantor raised a multitude of points of dispute including several entirely new points only 2 days before the hearing which were in summary:
Deputy Insolvency and Companies Court Judge Kyriakides held that:
The judge therefore concluded that the debt was not disputed on substantial grounds.
Permission to appeal has been granted although this was conditional and it remains to be seen whether the appeal will be pursued.
Simon has been asked to prepare an article for Lexis Nexis as they consider the case important for both insolvency and property practitioners. Simon’s article will feature on the Chambers website in due course.
Simon is a senior junior barrister and mediator practicing in the fields of property and estates, in particular landlord and tenant. Simon’s work is principally based in London and the South and South West of England.