Insolvency: Doran v County Rentals included by Sealy & Milman

The latest update to Sealy & Milman: Annotated Guide to the Insolvency Legislation 24th Ed includes, under the notes to s.123 Insolvency Act 1986 (‘definition of inability to pay debts’), the recent case of Doran v County Rentals Ltd (t/a Hunters) [2021] EWHC 3478 (Ch) (20 Dec 2021) in which Arnold Ayoo acted. The case reiterated the principle that the court should be slow to infer an inability to pay debts from the mere fact of non-payment of a debt.

Doran concerned the Corporate Insolvency and Governance Act 2020 restrictions on petitions against companies affected by coronavirus. On the facts it did not matter that the petition sums fell due pre-pandemic (irrespective of coronavirus) as the supposed failure to pay when the sums fell due did not go to the question of inability to pay, and the court stressed that the coronavirus test had nothing to do with the effect of the coronavirus upon the indebtedness, only with whether the company would have been insolvent apart from the effect of the coronavirus.