Unjust enrichment: what’s liquidated?

13 January 2023 / Wilson Leung , Ryan Tang

Issue: 8008 / Categories: Features , Insolvency , Commercial

Dusoruth v Orca: does the absence of a liquidated debt automatically lead to the annulment of a bankruptcy order? Wilson Leung & Ryan Tang examine the judgment

In the judgment in Dusoruth v Orca in September 2022, ICC Judge Mullen held that a claim in restitution for unjust enrichment (even if it can be precisely quantified) is not a claim for a ‘liquidated sum’ within the meaning of s 267(2) of the Insolvency Act 1986, and hence cannot form the basis of a bankruptcy petition.
However, the court also held that it had a discretion not to annul the bankruptcy order even if the petition debt was not for a liquidated sum. In exercising its discretion, the court would consider various factors such as the bankrupt’s conduct, the interests of other creditors, and whether the annulment would be for no good purpose (eg where the bankrupt was plainly insolvent anyway due to other debts).

In Re Dusoruth (a bankrupt) Dusoruth v Orca Finance UK Ltd (in liquidation) [2022] EWHC 2346 (Ch), [2022] All ER (D) 31 (Sep), the applicant,

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Unjust enrichment: what’s liquidated?

Dusoruth v Orca: does the absence of a liquidated debt automatically lead to the annulment of a bankruptcy order? Wilson Leung & Ryan Tang examine the judgment

In the judgment in Dusoruth v Orca in September 2022, ICC Judge Mullen held that a claim in restitution for unjust enrichment (even if it can be precisely quantified) is not a claim for a ‘liquidated sum’ within the meaning of s 267(2) of the Insolvency Act 1986, and hence cannot form the basis of a bankruptcy petition.
However, the court also held that it had a discretion not to annul the bankruptcy order even if the petition debt was not for a liquidated sum. In exercising its discretion, the court would consider various factors such as the bankrupt’s conduct, the interests of other creditors, and whether the annulment would be for no good purpose (eg where the bankrupt was plainly insolvent anyway due to other debts).

In Re Dusoruth (a bankrupt) Dusoruth v Orca Finance UK Ltd (in liquidation) [2022] EWHC 2346 (Ch), [2022] All ER (D) 31 (Sep), the applicant,

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