Winding up petitions
“It is a matter for the discretion of the judge whether a winding up order should be made on a disputed debt, and it is also a matter of discretion whether he decides the substantive question of debt or no debt.”
Brinds Ltd v Offshore Oil NL [1986]
“….If a petitioner’s debt is bona fide disputed on substantial grounds, the normal practice is for the court to dismiss the petition and leave the creditor first to establish his claim in an action. The main reason for this practice is the danger of abuse of the winding-up procedure. A party to a dispute should not be allowed to use the threat of a winding-up petition as a means of forcing the company to pay a bona fide disputed debt. This is a result of practice rather than law and there is no doubt that the court retains a discretion to make a winding-up order even though there is a dispute: see, for example, [Brinds]. But the board does not find it necessary to examine the limits of the discretion because they consider that there is no substantial dispute.”
Parmalat Capital Finance Ltd v Food Holdings Ltd [2008]
