3- Proof of Debts

Question 1

Introduction to PQ?

Answer 1

X would need to prove in the liquidation/administration/bankruptcy, as an unsecured creditor.

The right to prove one’s debts is the most important and strongest right that an unsecured creditor has, as they lose their right to bring an action when the co/individual enters liquid/admin/bank.

If the proof is accepted the unsecured creditor will receive a dividend of the share of the estate that is left for unsecured creditors after the secured creditors, expenses, preferential creditors and FT holders have been paid.

If there are insufficient assets to fulfil all of the UC proofs, then the rest will be distributed PP inter se- s.107/s.236(3).

Question 2

1) Is the debt expressly unprovable section?

Answer 2

IR14.2(1) and (2)

Question 3

IR14.2(1)

Answer 3

All claims by creditors, except as provided by this rule, are provable, whether they are present or future, certain or contingent, ascertained or sounding only in damages.

Question 4

IR14.2(2)

Answer 4

The following are not provable:
- Just read. Use if related to drugs, payment out of the social fund, a fine imposed for an offence in bankruptcy, an obligation under an order in family proceedings, an obligation of child support.

Question 5

2) Liquidation- Is the claim a debt as defined in 14.3 as:

Answer 5

(a) A debt or liability to which the co was subject at the relevant date;
(b) A debt or liability to which the debtor may become subject after the relevant date by reason of a obligation incurred before that date; or
(c) Any interest provable as mentioned in 14.23

Question 6

2) Bankruptcy- is the claim a ‘bankruptcy debt’ as defined in s.382 IA?

Answer 6

(a) any debt or liability to which he is subject at the commencement of the bankruptcy;
(b) any debt or liability to which he may become subject after the commencement of bankruptcy (including after his discharge from bankruptcy) by reason of any obligation incurred before the commencement of bankruptcy.
(d) any interest provable as mentioned in s.322(2).

Question 7

Relevant date for liquidation 14.1(3)(a) and (b)?- provision?

Answer 7

14.1(3B)- just use appropriate one.

Question 8

Commencement of liquidation provision, for 14.1(3B)?

Answer 8

s.247(2)

Question 9

s.247(2)

Answer 9

A co goes into liquidation if it passes a resolution for voluntary winding up or if a court order is made to that effect.

Question 10

Commencement of bankruptcy for s.382(a) and (b)? -provisions?

Answer 10

Bankruptcy commences at the date the bankruptcy order is made and continues until the discharge.

Question 11

s.342 or s.244

Answer 11

The provisions for preferences and transactions at an undervalue, which would mean the debt is not provable.

Question 12

The scope of ‘liability’ under s.382(1)- provisions?- bankruptcy

Answer 12

s.328(3) and (4)

Question 13

s.328(4)

Answer 13

Liability means a liability to pay money or money’s worth, including liability under an enactment, liability for breach of trust, liability in contract, tort or bailment and liability arising from an obligation to make restitution.

Question 14

s.328(3)

Answer 14

For the purpose of references to liabilities, it can be present or future, certain or contingentm or fixed or liquidation, capable of being ascertained by mixed rules or as a matter of opinion.

Question 15

The scope of ‘liability’ under 14.1(3)- provision? Liquidation

Answer 15

14.1(4),(5),(6)

Question 16

14.1(4)

Answer 16

Liability includes liability in tort if (a) the cause of action had accrued at the relevant date (14.1(3B)), or
(b) all elements necessary to establish the cause of action existed at the relevant date except for actionable damage,

Question 17

14.1(5)

Answer 17

For the purpose of references to a debt or liability, it can be present or future, certain or contingentm or fixed or liquidation, capable of being ascertained by mixed rules or as a matter of opinion.

Question 18

14.1(6)

Answer 18

Liability means a liability to pay money or money’s worth, including liability under an enactment, liability for breach of trust, liability in contract, tort or bailment and liability arising from an obligation to make restitution.