The High Court has dismissed a bankruptcy petition lodged by a leading law firm owed money by a client.
National firm Irwin Mitchell attempted to serve the petition in connection unpaid monies for legal services provided to client Antony Canning.
In August 2015 the court ordered ithat Canning pay assessed costs of £14,347 plus interest. Irwin Mitchell issued a statutory demand the following March.
In April 2016, the firm hand-delivered this first demand to an address in Cornwall, to which it said there was no response. A bankruptcy petition followed a few weeks later.
Irwin Mitchell viewed the first demand as ‘deemed served’ and said it took all reasonable steps to bring it to Canning’s attention.
But Canning disputed he had ever been served with the petition, or the first demand, and produced evidence that he lived in Essex rather than Cornwall.
The address delivered to by Irwin Mitchell was in fact the registered office of a company of which Canning had been a director.
A district judge found at first instance that Canning had been deprived of an opportunity to set aside the first demand, but that any application to do so would have been bound to fail, with the result that no serious prejudice was sustained.
Following a one-day hearing last month in Canning v Irwin Mitchell LLP, Mr Jeremy Cousins QC allowed Canning’s appeal and dismissed the petition.
By reason of the failure to serve the statutory demand, the judge ruled, there was no proper basis for the presentation of the bankruptcy petition.
‘There was a fundamental failure to effect service; in no meaningful sense could Mr Canning be said to have been served with the statutory demand, which never reached him, or came within his dominion,’ said Cousins.
He added that the real connection of the debtor to the service address was ‘extremely tenuous’ and there was no room for discretion.