Cross-claim

Bolsover District Council v Dennis Rye Ltd [2009] EWCA Civ 372; [2009] WLR (D) 147; TLR 19 May

On the hearing of a winding-up petition, the company contended that it had a genuine, serious cross-claim for restitution of overpaid council tax on empty properties which it said were effectively blighted in consequence of impending compulsory purchase orders and in respect of which it therefore ought to have had exemption under Class G of the Council Tax (Exempt Dwellings) Order 1992. The company had not contested the tax when it had been served with bills and had not appealed against those bills. If a company had a genuine and serious cross-claim which was likely to exceed the petition debt, the court would normally exercise its discretion by dismissing the winding up petition and allowing the company the opportunity to establish its cross-claim in ordinary civil proceedings. A company was not prevented from raising a cross-claim in winding up proceedings simply because it could have raised or litigated the claim before the presentation of the petition or it had delayed in bringing proceedings on the cross-claim. The issue for the judge had been whether the evidence before him was sufficient to satisfy him that the company’s cross-claim was not merely arguable, but was genuine and serious.