COURSE TITLE : LAW OF INSOLVENCY

COURSE CODE : LLB 43209

COURSE CREDIT : 60 HOURS 04 UNITS
COURSE LEVEL : DEGREE, 3RD YEAR 2ND SEMESTER

Course Description
Uganda recently passed the Insolvency Act 2011 and with its coming into force, the course unit
shall focus primarily on the principles of insolvency law, both in respect of corporate entities and
individuals. The content or the order may change to suit eventualities, the structure of the course
will broadly follow the structure in this course outline. The law of insolvency therefore attempt
to minimize loss to creditors in situations of financial crises to both an individual and a company.

Course Objectives

Students who pass this course should be able to:

1. demonstrate an understanding of the basic principles and rules of insolvency law in Uganda;
2. evaluate the key theoretical and policy issues affecting insolvency law;
3. demonstrate an understanding of a range of approaches to the subject;
4. research and solve problems on insolvency law, and research and deal with policy and theory

Expected Learning Outcome

Students who pass this course should be able to:
1. demonstrate an understanding of the basic principles and rules of insolvency law Uganda;
2. evaluate the key theoretical and policy issues affecting insolvency law;
3. demonstrate an understanding of a range of approaches to the subject;
4. research and solve problems on insolvency law, and research and deal with policy and theory

COURSE CONTENT TOTAL = 60 HOURS

1 GENERAL CONCEPTS OF INSOLVENCY LAW 2hrs
1.1 Object
1.2 Meaning of Insolvency
1.3 Concept of Insolvency
 Re Global Tours, & Travel Ltd Winding Up (2001) 1 EA 195
 Tran Africa Assurance Co Ltd Vs Cimbria (EA) Ltd (2002) KLR 275
 Indian Building Contractors Ltd v R.B Purohit (1965) EA. 342.
 R v Venubhai Chunibhi Arnin (1962) EA 65.

1.4 Distinction between "Insolvency" and "Bankruptcy"

1.5 Background of Insolvency Law

1.6 The importance of insolvency law

1.7 Insolvency regimes

1.8 Justifications For Reforms

1.9 The Administrative Machinery Of Corporate Insolvency

Read:
Christopher Bwanika & Kabiito Karamagi K, Insolvency - The Uganda Experience in
Commercial Justice Reform Programme Uganda Law Reform Commission Conference
on Business Law & Development: The Way Forward 19-21 July 2004 Nile International
Conference Center Kampala.

2.0 INABILITY TO PAY DEBTS 2hrs

2.1 Section 3 Insolvency Act
• Figg v Moore Brothers (1894) 2 QB 670
• Re North Exporter Hasluck (1895) 2 QB 264
• Re Gentry (1910)1 KB 825
• ReADebtor(No.211 of 1912) (1912) 2 KB 533
• Re Teddy Seezi Cheeye (1996) v KALR 116
 • Re Expanded Plugs Ltd (1966) ALL ER 877
• Re Medipharm Publication (Nig) Ltd (1971) UILR42
• Trans Africa Assurance Co. Ltd v Cimbria(EA) Ltd (1997-2001) UCLR 139
• Noble Builders (U) Ltd and another v Jaspel S Sandhu (1997-2001) UCLR 110
• Re Hoima Ginnery (1964) EA 439
• Re Welsh Brick Industries Ltd (1946) 2 All ER 197
• Priamit Enterprises Ltd v AG (2003) 1 EA 236

2.2 The tests of inability to pay debts

• Cornhil Insurance Pic v Improvement Services Ltd (1986) I WLR 114

2.3 Statutory Demand

• Section 4
• Epaineti Mubiru v Uganda Credit and Saving Bank (1978) HCB 109
• General Parts (U) Ltd v NPART SCCA 5/99
• Setting aside a statutory demand

3 BANKRUPTCY PETITIONS 4hrs

3.1 Objectives of Bankruptcy:
3.2 Reasons for Bankruptcy:
3.3 Capacity
• Re A Debtor, Ex Parte Customs and Exercise Commissioners v The Debtor
(1950
• Levene v IRC (1928) AC 217
• Graham v Lewis (1888) 22 QBD
• Re Sarflex Ltd (1979) Ch 592

3.4 Creditor's Petition

• Sec 20(2) IA
• Re Miller (1901) 1 QB51
• Central Purchasing Co Ltd v Kahinda Otafire (2002 - 2004) UCLR 118.
• Re a Debtor (1952) Ch 192
• Re Barr (1896) 1 QB 616
• Kanji v. Sydney Moss (1953) EA 408
• Shiekh Mohamed Bashir v. Income Tax Comm. (1961) EA 408
• Re a Debtor (No.l of 1987) (1989) 2 All ER 46
• Re Marr (A Bankrupt) (1990) Ch 773
• Malicious presentation of bankruptcy petition
• In Beechey v. William Hill (Parkland) (1956) CLY 5442
3.5 Debtor's Petition
• Ke Jackson, Ex Parte Jackson (1989) 91 ALR 145
• Re Thomas Kato UCLR ( 2002 - 2004) 385
• Re Kasulu case

4 PROCEEDING AFTER PETITIONS 8hrs

4.1 Debtor's statement of Affairs -Sec 21IA

• Rv Pike (1902) 1KB 552
• Section 124IA
• Nanubhai Bapalal Trivedi v The Official Receiver [1960] 1EA422(CAM)

4.2 Arrangement With Creditors

• Section 119-120IA

4.3 Creditor's Meeting To Consider Proposed Arrangement

• Section 124IA
• Third Schedule

4.4 Meeting Of Creditors And Appointment Of Trustee

4.5 The Public Examination Of The Debtor

• Section 22 IA
• Bishopgate Investments management Ltd v Maxwell (1992) 2 All ER 856

4.6 The Bankruptcy Order

• Section 20
• Re A Debtor (No.12 Of 1970) (1971) 1 WLR 1212
• Re Teddy Cheeye (1996) IV KALR 116
• Housing Finance Corp (K) Ltd v Wanene & Others (2003) 1 EA 94
• National & Grindlays Bank Ltd v. Shariff & Anor (1972) EA 413
• Kanji Pursholtan Toprami v. Sydney Moss (1957) EA 408
 • Sheikh Mohamed Bashir v. Income Tax Comm. (1961) EA 255
• Re Wigzell, ex parte Hart (1961) 2 KB 835
• ReGhelaRamji(1919)2ULR303
• Kahel Mohammed Abdel Magid Nagy, Re (2002 - 2004) UCLR 294
• National & Grindlays Bank Ltd v Shariff and another
• [1972] 1 EA413 (CAD) (TZ
• National &. Grind lays Bank v. Sharif & Anor (1972) EA 413

a. Effect of Bankruptcy order

1. Section 27 IA
2. Section 45(4) IA
3. In R v. Hartley (1972) 1 All ER 597
4. In R v. Hayat (1976) Crim. L.R 508,
5. Rv. Miller (1977) 1 WLR 1129,
6. Effect of the Adjudication order in other legislations
7. Official Receiver v. United Stores Ltd (1962) EA 746
8. Annulment, revocation of bankruptcy order
9. Re Robertson(A Bankrupt) (1989) 1 WLR 1139
10. Beechey v WiUiam Hill (Park lane) (1956) CLY 5442

5 CONTROL OVER PERSON & PROPERTY OF DEBTOR 2hrs

5.1 Inquiry into debtor's dealings

5.2 Administrators Of The Estate Of A Bankrupt

• Official receiver:
• Special manager:
• The Trustee:
• Re Alafaci; Registrar in Bankruptcy v. Hardwick (1976) 9 ALLER 262
• Duties of a bankrupt to the Trustee
• Duties of a Trustee to the Bankrupt

6 CREDITOR'S CLAIMS 8hrs

6.1 Ascertaining amount of claim and interest

6.2 Claim of unascertained amount
 Re Lupkovks (1954) 1 WLR 1234
 RE Myers (1908) I KB 941
 Saudis v. De Silva (1950) 17 EACA 95
  The Official Receiver v. Chande & Ors (1960) EA 581
 Vadilal Chhababhai Soni v. Official Receiver (1946) 7 EACA 34

6.3 Mutual credit or set-off

 Halesowen Presswork Ltd v. Westminster Bank Ltd (1970) 3 All ER 473
 Re DH Curtis (Builders) Ltd (1978) Ch 162
 Re Cushla (1979) 3 AllER 415

a. Claims by unsecured creditors

6.5 Claims of secured creditor

 Re A Debtor (No.5 of 1967), Ex parte National Westminster Banker v.
Official
 Receiver (1971) 2 All R 93
 Rea Debtor (No.24 of 1971) ex parte Marley v. Trustee of the Property of
the Debtor (1976) 2 AllER 1010
 Re Aveling Barford Ltd (1989) IWLR 360
 Re Norman Holding Co. Ltd (1991) l WLR 10

6.6 Preferential creditors

6.7 Non -preferential debts

6.8 The Principle of equal distribution

6.9 Exceptions to the equal distribution principle

• MS Fashiona Ltd v Bank of Credit and Commerce International SA No. 2 (1993) 3
All ER 769
• Re Bank of Credit and Commerce International SA (No.8) (1997) 4 All ER 568.
• Re Norman Holding Co Ltd (1990) 3 All ER 757,
• Re British and Common Wealth Holdings PLC (No.3) (1992) IWLR 672
• Re Maxwell Communication Corp. Pic (No.2) (1993) IWLR1402
• British Eagle International Airline Ltd v Compagnie National Air France (1975) 1
WLR788

6.10 Surplus Assets

6.11 Declaration and distribution of dividends

6.12 Final Distribution

7.1 PROPERTY AVAILABLE FOR PAYMENT OF DEBTOR'S DEBTS 2hrs

1. Property Defined
2. Commissioner of Stamp Duties (Qld) v. Livingston (1965) AC 694
3. Official Receiver in Bankruptcy v. Schulz (1990) 170 CLR 306.
4. Rule in Cohen v Mitchell (1890) 25 QBD 262
5. Halani v. Official Receiver (1952) 19 EACA 200.
6. Official Receiver v. Liverpool Uganda Co Ltd (1942) 9 EACA 19.
7. C C Patel & Co Ltd v N B Patel [1967] 1 EA 458 (HCK)
8. Re Janmohamed Ladha (Debtor) [1961] 1 EA 175 (HCT) .
9. In Re Keene (1922) 2 CH 475
10. Torkington v'Magee (1902) 2KB 427
11. Post Office v Norwich Union Fire Insurance Society (1967) 2 QB 363,

8. PROPERTY NOT AVAILABLE FOR PAYMENT OF BANKRUPT'S DEBTS

8hrs

8.1 Family assets & Matrimonial home

1. Read Sec 31(2) IA
2. National Provincial Bank Ltd v Ainworth (1965) AC
3. Re Citro (1990)3 AH ER 952
4. Re Holiday (1981) 1 Ch 405. '
5. Re Lowrie (1981) 1 All ER 353
6. Re Bailey (1977) 2 All ER 26
7. Re Pavlou (1993) 3 All ER 955
8. Re Flint (1993) WLR537
9. Re Turner (1975) 1 All ER 5
10. Re Windle (1975)3AIlER987
11. Mwakalinde v NBC Holding Corporation (2001) 1 EA 148
12. Kitale v Kitale (2001) 1EA 90
13. Muthembwa v Muthembwa (2002) 1 EA 186
14. Chakupewa v Mpenzi and Anor (1999) 1 EA 32

8.2 Bankrupt's income

1. Re Roberts (1990) 1 Q.B 122
2. Re Walter (1929) 1 Ch 647

8.3 Property held on Trust

 1. In Re Kay ford Ltd (1975) 1 All ER 604
2. Barclays Bank Ltd v Quist Close Investments ltd (1970) AC 567
3. Space investments Ltd v Canadian Imperial Bank of Commerce Trust co (Bahamas )
Ltd (1986) 3 All ER 75.
4. Carreras Rothmans v Freeman Mathew Treasure Ltd (1985) 1 All ER 155
5. Janet Ulph, 'Equitable Proprietary Rights in Insolvency: The Ebbing Tide?
(1996)JBL482

8.4 Rule in exparte Waring

8.5 Reservation of Title Clause

1. Aluminum Indudtrie Vaassen BV v Romalpa Aluminum Ltd (1976) 2 All ER 552
2. Clough Mill Ltd v Martin (1984) 3 All ER 982 '
3. Borden (UK) Ltd v Scottish Timber Products Ltd (1981) Ch 25
4. Re Bond worth Ltd (1980) Ch 228.
5. Hendy Lennox (Industrial Engines Ltd v Graham Pultick Ltd (1984) 2 All ER 152.

8.6 Realization & Distribution Of Property

1. Re de Wit (1962) ALR 789
2. Property capable of being disclaimed
3. Re Hooley, Ex parte United Ordinance & Engineering Co (1899) 2 QB 579
4. Section 35 IA

9 VOIDABLE TRANSACTIONS 4hrs

9.1 General principles (Section 15, 16, 17 & 18)

1. RePahoff (1961) 20 ABC 17,
2. Re KB Docker (193 8) 10 ABC 198,245:
3. Re Keever, a Bankrupt; Ex parte, the Trustee of the Property of the Bankrupt v. The
Midland Bank Ltd (1966)3 WLR 779
4. Re Dalton (1962) 2 All ER 499
5. Re Wigzell, Ex parte Hart (1921) 2 KB 835

9.2 Preference,
1. Section 15IA
2. Sharp v. Jackson (1899) AC 419
3. Re Seymour (1937) 3 All ER 499
4. Downs Distributing Co v Associated Blue Star Stores Ltd (1948) 76 CLR 423.
5. Re MC Bacon Ltd (1990) BCLC 324 .
6. Uganda General Trading co Ltd v N T Patel [1965] 1 EA 149 (HCU
9.3 Transaction at under value

9.4 Voidable Charges

9.5 Insider Dealing

9.6 Setting Aside Voidable Transaction

10 DISCHARGE FROM BANKRUPTCY 2hrs

10.1 Procedure
1. Section 42 - 43 IA
2. Re Mills (1966) 1 All ER 516
3. Re Mullan (1975)6ALR161

10.2 Effect of discharge

1. Chanan Singh v. The official Receiver (1965) EA 426
2. Nirmal Singh v. Ram Singh (1961) EA 168 (CA
3. Re Hassanali Hussein 20 KLR 38
4. Haribar Patel v. Uganda (1966) EA 311
5. Rv. Amir (1962) EA 65
6. Re Dahyabhai Desaibhai (1935) 16 KLR 112
7. Re Tabrisky; Ex p. Board of Trade (1947) Ch 565

11 BANKRUPTCY OFFENCES
 Sec 53 - 55 IA
 Sec 259 IA
 Harihar Chotabhai Patel v. Uganda (1966) EA 311
 Gurdas Singh Gill v. R (1956) 29 KLR 127.
 R v. Ratital Amarshi Lakhani (1958) EA 140
 Mohamedali Jan Mohamed v. R (1956) 23 EACA 473
 R.v Mohanlal Ramji Popat (1961) EA 263

11.1 SPECIAL BANKRUPTCIES

 Bankruptcy of Partners
  Re Boots; Ex parte Official Receiver (1976) 12 ALR 427
 Official Receiver v Aggarwal [1968] 1 EA 468 (HCT

12 LIQUIDATION 4hrs

12.1 Voluntary Liquidation

12.2 Members’ Voluntary Liquidation

12.3 Creditor's Voluntary Liquidation

 Re Global Tours & Travels Ltd (2001) EA 105
 Sembule Steel Mills Ltd v Salzigitterhamdal GMBT (2002) KALR 412

12.4 Distribution of the Property of a company

 Simba Airlines Ltd v Heritage Bank Ltd (2002) 1 EA 302
 Mastermind Tobacco(U) Ltd Tobacco & Commodity Traders International Incorporated,
Re UCLR 2002 - 2004
 Re Metro Cash and Carry (U) Ltd Misc App 440 of 2007, HC U
 Re Windsor Steam (1929) 1 CH 151
 British and Commonwealth Holding Pic v Spicer and Oppenheim (1992) ALLER 876
 Re Silver Valley (1882) 71 Ch D 381

12.5 Liability of Liquidator

 Rudewa v Commissioner of Stamp Duties (1966) EA 576
 Re Home and Colonial Insurance Company Ltd (1930) I Ch 102,

12.6 Effect Of Winding Up & Dissolution

 Stead, Hazel and Company v Cooper (1933) 1 KB 840,
 Re Corbenstoke Ltd (No.2) 1990) BCLC 60
 Mohammed Muwanga v Lint Marketing Board( in Liquidation) (1999) KALR 592
 Re Muddu Awulira Enterprises Ltd (2002 - 2004 ) UCLR 418
 Re Roberts and Cooper Ltd (1929) 2Ch 383

12.7 Assets Available For Distribution

 Hindcastle Ltd v Barbara Altenborough Association Ltd (1996) ALL ER 737

12.8 Distribution Of Assets And Priority Of Payment Of Creditors' Claims

 Section 6-14 IA

12.9 Effect Of Dissolution

12.10 Supervision Of Liquidation By Court

12.11 Fundamental and General duties of liquidator

12.12 Vacation of the Office of Liquidator

12.13 Supervision and enforcement by the court

13 ADMINISTRATION IN RESPECT OF COMPANIES 4hrs

13.1 Rescue Measures.

13.2 Purpose and Procedure of Administration

13.3 Steps Leading to the Administrative Order

13.4 Effect of Presentation of the application

13.5 Effect of provisional administration

13.6 The Proposals

13.7 Requirement of Administration Deed

13.8 Execution of Administration Deed

13.9 Administration Compared with Liquidation and Receivership

13.10 General Effect of the Administrative Order
 Re Atlantic Computer Systems PLC (1992) 1 All ER 476
 Barclays Mercantile Business Finance Ltd v Sibec Developments (1993) 2 All ER 195
.

13.11 Duties and Liabilities of Administrator

 Re Atlantic Computer Systems PLC (1992) 1 ALL ER 476 -

13.12 Termination of the Administrator

13.13 Enforcement of the Administrator's duties

14 CORPORATE AND INDIVIDUAL RECEIVERSHIP 6hrs

14.1 Receiver Defined
 Re International Bank Commodities (1993)Ch77.

14.2 Circumstance in which receivers are appointed

14.3 Appointment
 Cryne v Barclays Bank (1987) BCLC 548
 Morris & Co Ltd v Kenya Commercial Bank Ltd & Others ( 2003) 2 EA 605
 Clovergem Fish & Foods Ltd v International al Finance Corp & 7 Others ( UCLR 2002-
2004)
 Nyali Beach Hotel Ltd v Kenya Commercial Bank Ltd & Anor ( 2006) 1 EA 304

14.4 Fundamental duty of a Receiver

14.5 Effect of appointment of receiver

 Newhart Development case (1977) ALL ER.
 Gomba Holdings UK Ltd v Homan (1986)3 ALLER94,
 Tudor Grange Holding P/C v Citibank NA (1992) Ch 53 (1991) 4 ALL ER 1,
 Githungo v Fidelity Shield Insurance Co Ltd and Others (2004) 1 EA 45
 Watts v MidlandBankP/C (1986) BC LC 15
 Gomba Holdings UK Ltd v Miniories Finance Ltd, LA 1986,_ (1989) 1 ALL ER 261
  Re Sobam BV (1996) I BCLC 446
 Re B. Johnson & Co (Builders) (1955) 2 All ER 775,
 Re Mack Trucks (1967) 1 All ER 977.
 Nicoll v Cutts (1985) BCLC 32 CA
 Re Foster Clark's Indenture Trusts (1966) 1 ALL ER 43,
 Griffiths v Secretary of State for Social Service (1973) 3 All ER 1184
 Gosling v Gaskill (1897) AC 575
 Re Newdigate Colliery (1912) I Ch 468
 Airline Airspares Ltd v Handley Page Ltd (1970) 1 All ER 29
 George Barker ( Transport) Ltd v Eynom (1974) 1 All ER 900
 Ratford v Northaron District Council_(1987 QB 357.
 Aluminum Industries Vaassen Bv v Romalpa Aluminum Ltd (1976) 2 All ER 552
 Leyland DAF Ltd v Automatic Products PLC_(1994) 1 BCLC 245
 Moss Steamship Co Ltd. v Whinney (1912) AC 254
 Lipe Ltd v Leyland DAF Ltd (1993) BCC 385

14.6 Effect of receivership on competing family interests

 Mwakalinde v NEC Holding Corporation (2001) 1 EA 148
 Kitale v Kitale (2001) 1EA 90
 Muthembvva v Muthembwa (2002) 1 EA 186
 Chakupewa v Mpenzi and Anor (1999) 1 EA 32

14.7 Powers Of The Receiver.

 Multi Contractors Ltd v UCBSCA 25/1994.
 Hard Fibres v Tanganyika Electric SSC Ltd (1969) EA 619.
 Grindlays Bank (U) Ltd v Edward Boazi CA 23/1997.
 Grindlays Bank (U) Ltd v Edward Boaz SCCA No 23/92
 Greenland Bank Ltd v PWC - HC CO Cause No. 22/1997.
 Standard Bank of South Africa v Mityana STA Cotton Co
 A.K Detergents Ltd v G,M Combined Detergent (1999) KARL 562
 People's Transport Co Ltd (in receivership) vs Africa Cooperative Society Ltd (1999)
KALR 627.
 Epaineti Mubiru v Uganda Credit and Saving Bank (1978) HCB 109 General Parts (U)
Ltd v NPART SCCA 5/99
 Barclays Bank of Uganda v Livingston Katenda Lutu (1994) 1 KALR 64 Fina Bank Ltd
v Ronak Ltd (2001) 1 EA 65
 Trust Bank v Eros Chemists Ltd (2002) 2 EA 550 .
 Nyali Beach Hotel Ltd v Kenya Commercial Bank Ltd (2006) 1 EA 304
 Mugambi v Housing Finance Co of Kenya Ltd (2006) 1 EA 231.
 Komassai Plantation Ltd v Bank of Baroda Kenya Ltd (203) 2 EA 535
 Morris & Co Ltd v Kenya Commercial Bank Ltd &Others (2003) 2 EA 605
 Jambo Biscuits (K) Ltd v Barclays bank .of Kenya Ltd & Others (2003)
 2 EA 443
 Mohd Muwanga v Lint Marketing Board (in Liquidation) (1999) KALR 592
 People Transport Co Ltd (In Receivership) v Afric Cooperative Society Ltd (1999)
KALR 627
 Allied Bank International Ltd v Winifred K Nalusimba & Anor UCLR 2002 - 2004

14.8 Duties And Liabilities Of The Receiver

 Lathia v Drons Field Bros (1987)BCLC 321
 Alan Berg," Duties of the Mortgagee and a Receiver" (1993) Journal of Business Law
213.
 In Downs View Nominees Ltd v First City Corp Ltd (1993) AC
 Bristol and West building Society v. Mathew (1996) 4 All ER 698
 Fina Bank Ltd v Ronak Ltd ( 2001) EA 65
 Palk v Mortgage Services Funding PLC (1993) Ch 330
 Consolidated Entertainments. Ltd v Taylor (1937) 4 All ER 432
 Ratford v North Avon District Council (1986) 3 ALL ER , 193
 David Mpanga and Anor v Roliat Property Agency (1997-2001) UCLR 239
 Emag AG v Standard Chartered Bank & Another (2002- 2004) UCLR 207
 RE B Johnson and Co Ltd (1955) 2 ALL ER 776
 R v Board of Trade, Expert St, Martins Preserving Co. Ltd ( 1964) 2 ALL ER 561
 Nugent v Nugent (1908) I Ch 546
 Cuckmere Brick Co v Mutual Financial. Ltd ( 1971) 2 ALL ER 633
 Standard Chartered Bank Ltd v Walker (1982) 3 ALL ER 938,
 Yorkshire Bank PIC, v Hall (1999) 1 ALL ER 879,

14.9 Duties in realizing asset

 Gomba, Holdings UK Ltd v Roman (1986) 3 ALL ER 94.
 Mirror Group Newspapers PIC v Maxwell (1980) BCC 324
 Re B Johnson & Co (Builders) Ltd (1955) 2 ALL ER 77
 Downs view, Nominees Ltd v First City Corporation Ltd (1993) 3 ALL ER 626.
 Barclays Bank of Uganda v Livingston Katende Luutu (1994) 1 KALR 64

14.10 Remuneration of Receiver

 DFCU Bank Ltd v Michael Mawanda HCS251 of2001

14.11 Priorities for application of proceeds of Receivership

• Mususa v Attorney- General and Anor (1991)1 E A 217
• SAA Technical (property) Ltd v Air Kenya Aviation Ltd (2006) 1 EA 317
14.12 Termination of the Receivership

14.13 Receiver Appointer By Court

 Re London Pressed Hinge Co Ltd (1905) Ch. 576
 BCC 1 S A v B.R. S Kumar Bros Ltd (1994) BCLC 21
 Re London Pressed Hinge Co Ltd (1905) I Ch 576
 Re Tilt Cove Copper. Co. Ltd (1913) 2 Ch 588).

14.14 Points to check before accepting an appointment

14.15 Power of Receivership on Liquidation or Bankruptcy

 Re Potters Oil Ltd (No2) (1986) 1 All ER 890,
 Sowraan v David Samuel Trust Ltd (1978) 1 All ER 616
 America Express International Banking Corp v Hurley (1985) 3 All ER 56
 Omondi v National Bank of Kenya & Others (2001) 1 EA 177

14.16 Control of Receivership

15 PERSONAL LIABILITY OF COMPANY DIRECTORS /OFFICERS DURING

INSOLVENCY 2hrs

15.1 Director's Duties

 Director Defined:
 Solomon v Solomon (1897) AC 22
 DK Construction Company Ltd and Another v Barclays Bank of Uganda Ltd (2002-
2004) UCLR 201.
 Dorchester Finance Co Ltd v Stebbing (1988) BCLC 488
 Re City Equitable Fire Insurance (1925) Ch 47
 National Bank of Kenya Ltd v First Interstate Trading Co Ltd
 & Others (2006) 1 EA 287
 Walker v Kimborne_( 1976
 3M Australia Pry Ltd V Kemish_ (1986) ACLC 185,
 Statewide Tobacco Services Ltd v Morlye_( 1991) ACLC 827
 Read: Andrew Keay, The Duty of Directors to take Account of Creditors’ Interests:
Has It Any Role to Play? July (2002) JBL 379

15.2 Potential Liabilities

  Refer to section 15,16,17, and 18 and other sections
 Proceedings by Liquidator for breach of duty owed to the company
 Liability for Fraudulent trading
 In Re Gerald Cooper Chemicals Ltd (1978) 2 All ER 49,
 Re Patrick and Lyon Ltd (1933) CH 786
 R v Grantham (1984) 3 AllER 166
 Re Maid Stone Building Provisions Ltd (1971) 3 All ER 363,
 Re Gerald Cooper Chemicals Ltd (1978) 2 All ER 49
 Re Gerald Cooper (Chemicals) Ltd (1978) 2 Ch 2
 MN Tejani & Others v The Official Receivers (1960) 1 EA 574
 How can directors avoid liabilities?

Read:
 Oditah, "Misfeasance proceedings against Company Directors"(1992) LMCLQ 207
 Fidelis Oditah," Wrongful Trading" (1990) LMCLQ 205

Teaching and Learning Method

Lectures are conducted formally and students will be expected to read in advance whatever is
specified for the following classes and come prepared to explain or discuss or query the material.

Coursework and Exam Assessment

Coursework To be submitted in the middle of the semester 30%
Final Exam End of Semester 70%
Total mark 100%

References

R.Pennington:Corporate insolvency Law, Butterworths, 1991

Fletcher, Law of insolvency, 2nd ED Sweet and Maxwell
Pennington(ed) Insolvency law guide and practivle series, Jordana, 1987
Goode, Principles of corporate insolvencylaw 2nd Ed 1997
Christopher Berry, Edward Bailey, Stephen
Christopher Berry, Edward Bailey, Stephen Schaw Miller, Personal Insolvency law and
Practice, Butterworth, London 1993.
Atkins Court Forms (Bankruptcy & Insolvency), 2nd Edition, 1993.
Halisbury's Law of England 4th Edition, Volume 3(2) (Bankruptcy& Insolvency).
Muir Hunter and David Graham, Williams on Bankruptcy, Stevens, 18th ed. 1968.
C.A Sales, The Law Relating to Bankruptcy, Liquidations and Receivership,
5th Ed., Macdnolds & Evans, 1956.
lan R McNeil, Bankruptcy Law in East Africa, 1966.
Dennis Campbell, International Corporate Insolvency Law, Butterworth, 1992.
Robert R Pennington, Pennington 's Corporate Insolvency Law, Butterworths.
Philip R Wood, Principles of International Insolvency, Sweet & Maxwell, 1995.
R.M Good, Legal Problems of Credit and Security, Sweet & Maxwell 2002.
R.M Goode, Principles of Corporate Insolvency Law (2nd Ed) 1997.
Stephen Barton, Butterworths Corporate Law Service - Insolvency
(Parts A-D), Butterworths Lexis Nexis, 2002.
Stephen Barton, Butterworths Corporate Law Service - Insolvency
(Parts E-G), Butterworths Lexis Nexis, 2002.
Tolly's Company Law, Tolleys Loose-leaf Service.
Fiona Tolmie, Introduction to Corporate & Personal Insolvency Law, 1998.

RECOMMENDED STATUTES
Insolvency Act 2011
Companies Act, Cap 110
Mortgage Act 2009
Financial Institutions Act 2004
Partnership Act, 2010
Sales of Goods Act, Cap 82
Debts (Summary Recovery) Act
Civil Procedure Act.