Insolvency

(i) It was established law that if one of the conditions in r 6.5(4) of the Insolvency Rules 1986 (SI 1986/1925) was satisfied, the statutory demand would usually be set aside. That was because it would be unjust to require the principal debtor to face the consequences of bankruptcy if he appeared to have a counterclaim, set-off or cross demand.

(ii) The failure to litigate a cross claim was not fatal to a genuine cross claim defeating a winding-up petition. However, in deciding whether it was satisfied that the cross claim was genuine and serious, the court was entitled to take into account all the relevant circumstances. In corporate insolvency cases it was no longer a requirement that the company was unable to litigate its counterclaim; that was something which might be a relevant circumstance but it was not decisive. The law relating to corporate insolvency was not necessarily applicable to personal insolvency, where the Insolvency Act 1986 and the