In insolvency, when a legal challenge is made against an officeholder’s decision to accept or reject a proof of debt, who bears the burden of proof? Two recent High Court decisions have cast light on the issue.
There are two potential answers to the above question.
1. The party applying to the court to overturn the decision bears the burden of proof. This logic is predicated on the basis that the party who brings the claim or application must prove its case.
2. The party asserting that it is owed the debt bears the burden of proof. This argument proceeds on the basis that it is for the party making a positive case that it is owed money must make good that assertion with evidence.
As a starting point, it is worth remembering that,when a court application is made to challenge an officeholder’s acceptance or rejection of a proof of debt, the court conducts a fresh re-hearing of the case. The merits of the case are considered from scratch. The court is not restricted to the evidence that was before the officeholder. It considers all the relevant evidence put before it and decideswhether the creditor’s claim is established: Re a Company (no. 004539 of 1993) [1995] BCC116 at 120.
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Please click on this link for the full article by Oberon Kwok on the burdens of proof when challenging officeholder decisions on creditor claims.