The creditor presented a winding-up petition against the debtor company in respect of unpaid invoices under a construction contract. The debtor applied for an injunction restraining advertisement of the petition.
An interim injunction order was made, and a subsequent consent order staying proceedings was agreed stating that “UPON the agreement between the parties that there was a genuine dispute….”
The matter then returned to court, with the debtor raising disputes and counterclaims. It relied on the recital in the consent order as evidence that the creditor had accepted there was a genuine dispute.
The judge rejected this argument and, on the dispute, held that the debtor had never served any payless notices in respect of the invoices and therefore, under the contract and construction law, there was no genuine dispute to the invoices.
It was accepted that the lack of payless notices did not prevent the debtor from asserting counterclaims. However, the judge held that the debtor’s unmeritorious disputes undermined the debtor’s counterclaim arguments.
The judge therefore held that the debtor’s alleged counterclaims for defective work were not supported by the evidence and, whilst acknowledging that the threshold for establishing a counterclaim was low, the company had failed to get over that threshold and the application for an injunction was dismissed.
Developstate Limited v Alexander Luxury (Yorkshire) Limited [2026] EWHC 2170 (Ch)
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