Respondent company wound-up where there was insufficient evidence of a set-off/cross-claim

The court wound-up a respondent company where it failed to provide sufficient evidence of its set-off or cross-claim to reduce the petition debt to less than £750.

The respondent was a media firm which had entered into a sponsorship agreement with the British Film Institute (BFI), under which it would be the main sponsor of the 65th BFI Film Festival and receive certain benefits for a sponsorship fee of £200,000 plus VAT.

A dispute arose between the respondent and BFI in the context of the BFI not delivering some of the benefits which were contractually due. This dispute was compromised between the parties by way of a reduction in the sponsorship fee of £20,000 plus VAT. The respondent thereafter failed to pay the reduced sponsorship fee despite agreeing to do so.

A Statutory Demand was served by the BFI following non-payment. Subsequently, a winding up petition was presented, which the respondent disputed on the grounds of set-off or cross-claim. However, the respondent failed to provide any evidence of substance to dispute the petition debt.

The court concluded that the respondent’s evidence did not establish any substantial dispute to the effect that losses had been suffered. At its highest, any cross-claim would still leave an undisputed debt in excess of £100,000. The respondent had also only provided evidence which said that it anticipated net profit in the region of £31,000. This was not enough to satisfy the petition debt. 

Overall, the court concluded that the BFI had standing to present a petition and ask for the usual compulsory order even if the amount payable was uncertain. Accordingly, the winding up order was made on the basis a debt of more than £750 was due and payable and could not be satisfied by the respondent.

In regards to Hall Media Group Ltd, Re Chancery Division | [2023] EWHC 3110 (Ch).

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