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| Coutts & Co v Stock | |
|---|---|
 | |
| Court | High Court of Justice |
| Decided | 24 November 1999 |
| Citation(s) | [1999] EWHC Ch 191 [2000] 1 WLR 906 |
| Keywords | |
| Insolvency, voidable transaction | |
Coutts & Co v Stock [1999] EWHC 191(Ch) , [2000] 1 WLR 906 is a UK insolvency law case, concerning voidable transactions.
Coutts & Co gave Mr Stock’s company a £200,000 overdraft. Mr Stock gave a personal guarantee for it. Then came a winding up petition, as the account was £500 in credit. But by the time the petition was advertised, the account was overdrawn by £121,875 and £190,000 by the time the petition was granted. The bank honoured cheques in favour of third parties, most of which were three companies controlled by Mr Stock. Coutts & Co wanted to enforce the guarantee. Mr Stock argued the Insolvency Act 1986's section 127 [lower-alpha 1] prevented the bank from debiting the account, and so the bank could not recover from him.
The Bank was held to be entitled to the full sum claimed, as it was a debt owed by the Debtor. [1]
Lightman J noted that "[t]he authorities are in disarray and the state of the law is uncertain, if not confused." [2] He then proceeded to identify "the principles which would be expected to operate in a case where Section 127 applies": [3]
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