On 21 May 2026 judgment was awarded to H&J in the matter of Henderson & Jones Ltd -v- Wilcocks Contractors Ltd & David Shaun Wilcock, following H&J’s application for summary judgment on the basis of the “Habib Bank Rule” (per BCCI v Bank Ltd [1999] 1 WLR 42) and Insolvency Rule 14.8.
The dispute between H&J and the Defendants concerned a debt of £240,506 (the Debt) owed to a (now dissolved) company (Thorntree Properties Ltd - TPL) by Wilcock Contractors Ltd (WCL) - a company connected by the common directorship of David Wilcock. The Debt was recorded in the intercompany loan account ledger and in the statutory accounts of both companies prior to TPL entering Administration in 2017.
Following TPL entering Administration, WCL submitted a proof of debt for a net balance of £57,039 said to be owed to it by TPL. The Joint Administrators of TPL formally rejected WCL’s proof of debt in accordance with Insolvency Rule 14.7 and gave notice that WCL had 21 days to make an appeal to the court if it wished to contest the decision (per Rule 14.8). WCL failed to make an appeal within that period (or at all) and failed to pay the Debt when demanded by the Administrators.
H&J subsequently took an assignment from TPL of its claims against WCL and Mr Wilcock related to the Debt. Following (unanswered) pre-action correspondence being sent by H&J, proceedings were issued against WCL for payment of the Debt and, in the alternative, against Mr Wilcock for breach of duties in writing off, waiving or otherwise not demanding payment of the Debt. The Defendants’ Defence set out various grounds on which it was alleged that the Debt was not owed or had been extinguished by various (alleged, but wholly unparticularised) rights of set-off. The sums allegedly owed to WCL which were claimed to give rise to a right of set-off fell into two categories:
- those raised previously in WCL’s proof of debt (the Category 1 Sums); and
- further claims which, for reasons best known to the Defendants, were not included in WCL’s proof of debt (the Category 2 Sums).
Following the close of pleadings, H&J applied for Summary Judgment on the basis that the Defendants’ Defence and the grounds relied upon was no more and no less than a weak attempt at circumventing the Habib Bank Rule, which provides: “[...] if a person who claims to be a creditor has his proof rejected but does not exercise his right to apply to the court, he cannot have a second bite at the cherry by submitting another proof to the liquidator for the same debt…My second proposition is that, given that he cannot have a second go against the liquidator by submitting a second proof, he cannot have a second go by some other procedure instead.” The Rule was, more recently, affirmed by the Court of Appeal in John Doyle Construction Ltd v Erith Contractors Ltd [2021] EWCA Civ 1452 (coincidentally also a case in which H&J was involved), in which Coulson LJ remarked that ”importantly, if a creditor fails to appeal within the stated time against a liquidator's decision, he cannot thereafter challenge that decision or assert his claim by way of set-off”.
After a lengthy hearing of the application for Summary Judgment spanning 2 days, judgment was awarded to H&J for the full value of the Debt plus interest and costs. In his detailed and carefully considered judgment, DDJ Lewis found - despite the “kitchen sink of meritless objections” raised by the Defendants - that “WCL has no real prospect of successfully defending the claim (or any of the claim) against it”. Specifically:
- Of the Category 1 Sums, it was found that “the Habib Bank Rule provides an unassailable answer…” and that “WCL is accordingly barred by the Habib Bank rule from raising Category 1 as a defence to the claim for the WCL Debt, whether by way of set-off or on some other basis”; and
- Of the Category 2 Sums, DDJ Lewis found that “As with the Category 1 sums, the Defendants’ case is, in truth, little more than a bare assertion” and that there was a general “paucity of evidence provided by the Defendants (and WCL in particular) to support their case…” and consequently found that the Defendants had no real prospect of successfully relying on these sums to establish a defence of set-off.
The judgment represents an excellent success for H&J and demonstrates the breadth of its knowledge and experience - wielding the Habib Bank Rule and the Insolvency Rules to its advantage in bringing this matter to a swift and cost-effective conclusion without the need for a full trial. Further, by reasserting the long standing principle of the Habib Bank Rule and the power of Insolvency Rule 14.8, this decision is a helpful precedent to practitioners across the insolvency industry, particularly those grappling with debtors with a penchant for raising spurious counterclaims and purported rights of set-off.
