Amber applied under rule 7.24 of the Insolvency (England and Wales) Rules 2016 for final injunctions to restrain Ilyrian from presenting winding-up petitions founded on two statutory demands dated 15 November 2025. One concerned works at the Alton Estate in 2019, where £27k was said to be due; the other, works at Mander Court in 2021 where £39k was said to be due.
A court will restrain presentation of a winding-up petition where the debt on which it is founded is disputed on genuine and substantial grounds. In the case of Elevate Estates Management Ltd v Fine Star Ltd [2026] EWHC 1831 (Ch), it was held that:
“The term ‘substantial’ demands that the arguments possess weight, something that can bear scrutiny. The test would require a case to survive being probed and turned over.”
Where there is a cross-claim, following Re Bayoil SA [1999] 1 WLR 147, that cross-claim: “must be genuine and serious or, if you prefer, one of substance“. It must also equal or exceed the debt that is not itself disputed.
The parties had also agreed that an applicant should not be kept out of a cross-claim by a failure to litigate that cross-claim, but the court is entitled to take into account the fact that a company has not even attempted to litigate the cross-claim, and consider whether there were reasons why it had not done so.
Chief ICC Judge Briggs noted that the HGCRA did not alter these principles. An employer who has failed to serve a pay less notice may still raise a genuine and serious cross-claim in answer to a petition.
On the Alton project, the judge held that Illyrian did not have a debt that was capable of supporting a winding-up petition.
Firstly, the Payment Application relied upon had failed to comply with the mandatory requirements of the relevant clause under the contract. It was not, therefore, a valid application and did not give rise to a notified sum payable under the contractual and statutory payment machinery.
Applying the reasoning in Netomnia Ltd v MJ Quinn Integrated Services Ltd, (see Dispatch, Issue 314) the court rejected the argument that the recipient’s practical understanding cured non-compliance. Amber’s assessment of the account did not change the contract’s meaning or validate the application.
Further, Amber had established a genuine and serious cross-claim arising from alleged delay, under-resourcing and defective workmanship. That claim was supported by contemporaneous material, including the notice of specified default served in November 2019. Although its quantification was open to criticism, the cross-claim could not be rejected on an application to restrain presentation of a winding-up petition.
Finally, Amber had a substantial limitation defence. Ilyrian’s evidence identified 11 March 2020 as the final date for payment. No proceedings or adjudication were commenced before expiry of that period. Ilyrian said that, under clause 4.12.2. of the JCT subcontract, a failure to pay an interim payment postponed the start of the limitation period until the Final Payment Notice was served. The judge noted that a claim to an interim payment is a claim in debt. The cause of action accrues when the sum falls due and is not paid. Each interim payment is a debt distinct from the final payment.
Here, nothing in clause 4.12 suspended or deferred a cause of action that has already accrued. The words “without affecting the rights of the subcontractor in respect of any interim payment not paid in full by the contractor by its final date for payment” preserved the right to an unpaid interim payment on its existing terms. They did not postpone it. Further, the Final Payment Notice showed the Final Sub-Contract Sum “less the total amount previously due as interim payments“. An interim payment that was due but unpaid is deducted in arriving at the final balance; it is not carried into it. Such a sum is recoverable only as an interim debt. Once that claim was statute-barred, the final account does not revive it.
No proceedings or adjudication were commenced before 11 March 2026. Nothing prevented Ilyrian from issuing a claim or referring the dispute to adjudication in the eleven weeks before the period expired. Service of a statutory demand was not the equivalent of the bringing of an action and did not stop time running.
The position was different on Mander Court. The judge did not consider that, with only limited exceptions, the deductions Amber alleged it was entitled to make had any substance.
The judge explained that there was a distinction to be drawn between the evidence produced to oppose the Alton statutory demand and the Mander demand. The opposition to the Alton statutory demand was supported by various contemporaneous documents that demonstrated a genuine claim. In respect of the Mander demand there were no contemporaneous records or evidence to quantify the deductions for rectification or overhead and profit. The judge said that: “an inference cannot provide a connection that Amber has not itself asserted”. Ilyrian in contrast provided contemporaneous documents concerning on the issues, including fire certification. The judge concluded that the:
“absence of documents produced to support deduction in the teeth of documents supporting Ilyrian’s claim leads to a finding that the purported deductions are not justified.”
The deduction for overhead and profit was unparticularised and lacked substance. Whilst Amber accepted that a sum was due, it was expressed to be conditional on a valid application. The acceptance is evidence that a valid application was made. The suggestion that the original payment application was invalid was therefore rejected.
The Mander debt was not disputed on genuine and substantial grounds. The whole debt claimed in the Mander statutory demand was due and owing. However this was not the end of the story. Despite that finding, the Mander petition was restrained because Amber had a genuine cross-claim on the Alton project which exceeded the sums due by some £9k. Remember the court had concluded that the Alton debt was not due. A cross-claim need not arise under the same contract. Typically, it will lie between the same parties in the same capacities. Applying Re Bayoil, the judge concluded that the presentation of the petition on Mander should be restrained unless there were special circumstances. There were none. Therefore, the judge granted a final injunction restraining Ilyrian from presenting a winding-up petition founded upon the Mander statutory demand.