[misnamed in original as Everard v. The Society of Lloyds, -ed.] Chancery Division
 EWHC 1890 (Ch),  BPIR 1286
COUNSEL: Jeremy Callman for the applicants; Edward Bannister QC and David Foxton for the respondent
JUDGE: Laddie J
DATES: 18 July 2003
HEADNOTE: The applicants were a number of former Names at Lloyds where judgments in substantial sums had been obtained against them. A number of Names put forward cross-claims alleging fraudulent misrepresentation and the lead action in that regard was the Jaffray action. The claims in such action were, in the majority of cases, confined to fraud, although certain Names who had joined Lloyds before the Lloyds Act 1982 came into effect also included claims for negligent misrepresentation but only in relation to the periods before 5 January 1983. The threshold fraud issue was directed to be tried as a preliminary issue in the Jaffray action but before it was so tried Lloyds decided to enforce some of the judgments it had obtained and to that end served statutory demands. The applications to set aside the same in what are known as the Garrow proceedings were granted. Subsequently the threshold fraud point went against the Names at a trial before Creswell J, but, on appeal to the Court of Appeal, it found that there had been misrepresentation in various brochures given to Names but they had failed to prove fraud. The order of the Court of Appeal refused a stay of execution but such order was without prejudice to the Names ability to make a further application to amend to the Commercial Court. In early November 2002, Lloyds served further statutory demands which the Names applied to set aside, and, at about the same time, a number of the Names applied to amend so as to allege negligent misrepresentation. The latter application came before Cooke J on 26 March 2003, and, in his judgment, he held that certain Names (category 1) failed to obtain permission but the remainder (category 2) obtained permission to amend in principle subject to filing properly particularised claims including a properly particularised case under s 14A of the Limitation Act 1980. The effect of this would be that, if there were any claims in category 2 which should have permission, the period of time covered thereby would be severely limited and hence restrict the amount of any damages available. Cooke J refused permission to appeal, but an application for such permission was pending before the Court of Appeal when the applications to set aside the statutory demands came before the court.
Held — granting the applications to set aside the statutory demands —
(1) Save in the case of a challenge to a judgment debt, all objections to a statutory demand, including the existence of a counterclaim and the disputing of the debt, should be raised in an application to set aside the statutory demand; a debtor is obliged to get on with his challenge promptly and it would be inappropriate to defer such challenge so that it can be raised on the hearing of the bankruptcy petition.
(2) In respect of judgment debts, any challenge to the same should be considered on the hearing of the bankruptcy petition, but, in this regard, where the debtor seeks to show that he has a ground for appealing or setting aside a judgment the test is no different from the one that applies on the hearing of an application to set aside the statutory demand, namely that the debtor needs to show that he has a genuine triable challenge to the debt.
(3) Applying the above principles to the present case, the applicants were seeking to pursue a counterclaim and the question to ask was whether it was a genuinely triable counterclaim.
(4) The fact that Cooke J refused permission to plead the counterclaim, and, indeed, refused permission to appeal was not determinative of whether the Names proposed counterclaim raised a genuine triable issue; it was necessary to consider in the present case whether the proposed appeal was real rather than frivolous, and, if it was, there would be a genuine triable issue as to the proposed counterclaim such that the statutory demands should be set aside.
(5) Given that there was no suggestion that all of the Names arguments were hopeless, it was inappropriate to treat the proposed appeal as other than real but different considerations would apply if permission to appeal were refused or, in the event of permission being allowed, the substantive appeal were dismissed.
Per curiam: had the statutory demands not been set aside, it would almost certainly have been inappropriate to exercise any discretion to postpone the presentation of a petition under r 6.5(6) of the Insolvency Rules 1986 or the CPR.
LADDIE J:  This is the judgment in an application in which the primary relief sought is an order setting aside statutory demands issued by the respondent, the Society of Lloyds (Lloyds). The applicants are a number of former Names at Lloyds. The respondent has obtained judgments in substantial sums against each of them. The statutory demands are based on those judgment debts. There is no dispute as to the existence of the debts nor is there now any application to set the judgments aside or to appeal them. In fact, these are not the only statutory demands issued by the respondent against former Names. This application is being treated as a test case. Its outcome is likely to affect a considerable number of former Names in substantially the same position as the applicants here.
 The history of events leading to this application is long and tortuous. It, or parts of it, have been described in a number of judgments in earlier proceedings and applications. I set out below, as briefly as possible, the stages in that history which constitute the necessary background to this application. In doing so I borrow heavily from the admirable skeleton arguments prepared by Mr Jeremy Callman, who appears from the applicants, and Mr Edward Bannister QC and Mr David Foxton, who appear for Lloyds.
 As is now notorious, in the 1980s and early 1990s the Lloyds insurance market was rocked by financial problems which surfaced in large part, but not exclusively, as a result of claims arising out of asbestos litigation in the USA. Each Name had unlimited liability for the losses suffered by his syndicate. A reconstruction and renewal plan was put in place. Part of that involved Names and former Names reinsuring all their 1992 and prior years underwriting business into an entity called Equitas Reinsurance Ltd. Payment of the Equitas premium for this reinsurance was compulsory. These premiums were large. In some cases they were very large. Some Names, including the applicants in this case, refused to pay. In many cases they said that they did not have the resources to do so. Various challenges were made by Names to their obligation to pay the Equitas premium. All such challenges eventually failed in the courts. Judgments were obtained against defaulting Names and former Names, hence the judgment debts which underlie the statutory demands here.
 However, the final judgments in relation to the outstanding Equitas premiums was not the end of the Names fight against Lloyds. A number of Names put forward cross-claims alleging fraudulent misrepresentation. The leading action in which that allegation was raised is known as the Jaffray proceedings. In mid-1998, Colman J ordered the determination of a preliminary issue in those proceedings, sometimes referred to as the threshold fraud point. It is in the following terms:
Whether Lloyds made misrepresentations, which it knew to be untrue, and/or as to which it was reckless, whether they were true or false and whether such misrepresentations were communicated to the Names and if so, when.
 The trial of the threshold fraud issue, together with another issue which had been added by order of Creswell J, commenced before the latter judge on 4 March 2000. It lasted about 3 months. Judgment was given on 3 November of that year. (Society of Lloyds v Jaffray (unreported) 3 November 2000.) The claims made against Lloyds by Names in the Jaffray action were, in the majority of cases, confined to claims in fraud, although certain Names who had joined Lloyds before the Lloyds Act 1982 (Lloyds Act) came into effect, also included claims for negligent misrepresentation, but only in relation to periods before 5 January 1983. The reason for this cut-off date was that s 14(3) of the Lloyds Act purported to protect Lloyds from, amongst other things, misrepresentation claims unless the misrepresentations were made in bad faith.
 Before the trial of the preliminary issue had commenced, Lloyds decided to enforce some of the judgments it had obtained against defaulting Names. To this end, in 1998, Lloyds served statutory demands on a number of Names. The Names immediately applied to set them aside. The power of the court to do that is contained in r 6.5(4) of the Insolvency Rules 1986 (the 1986 Rules). The grounds, as set out in r 6.5(4), are as follows:
(a) the debtor appears to have a counterclaim, set-off or crossdemand which equals or exceeds the amount of the debt or debts specified in the statutory demand; or
It appears that the Names relied upon grounds (a) and (b).
 Those applications to set aside, which are known as the Garrow proceedings, came before Jacob J in June 1999. He declined to go into the merits of the threshold fraud issue in the counterclaims which were to be considered at the hearing of the Jaffray proceedings before Creswell J the following year. He said that to try to do so would be futile. He found for the Names under r 6.5(4)(a) of the 1986 Rules. An appeal from that decision to the Court of Appeal was dismissed. Both judgments are reported (see Re a Debtor (No 544/SD/98)  BCLC 103).
 As Mr Bannister explains in his skeleton, if the Names had succeeded in the Jaffray action in establishing fraudulent misrepresentations by Lloyds, their claims for losses would have extended, subject to questions of limitation, to all succeeding years including, in principle, the obligation to pay the Equitas premium because the Names had a new cause of action for each year of account in which they participated as underwriting members of Lloyds. The possibility of such recoveries meant that a successful counterclaim by a Name in the Jaffray action could result in a liability on the part of Lloyds to that Name at least equalling the amount of the judgment on the Equitas premiums. Any claims in the fraudulent misrepresentation would not have been covered by the immunity given to Lloyds under the Lloyds Act.
 Creswell Js judgment on the threshold fraud point in the Jaffray action went against the Names. He held that there was neither fraud nor any representation made by Lloyds to the Names. He refused permission to appeal. Such permission was subsequently given by the Court of Appeal. That appeal gave rise to a lengthy judgment (see Society of Lloyds v Jaffray and Others  EWCA Civ 1101,  All ER (D) 399 (Jul)). The Court of Appeal found that various brochures produced by Lloyds and given to Names contained:
A representation that there was in place a rigorous system of auditing which involved the making of a reasonable estimate of outstanding liabilities, including unknown and unnoted losses.
 It also found that those at the centre of Lloyds must have intended the representations to be understood in that way and that it was material, in the sense that it was intended to be relied on, and that the representation was false. However, the court also found that the Names had failed to prove fraud.
 As Cooke J has said in a recent judgment, the relationship of which to this history will be explained in a moment:
By an order dated 28 October 2002, the Court of Appeal spelt out the consequences of its decision. It refused applications for a stay of execution of enforcement of judgments obtained against any Name for that persons Equitas premium, of any costs orders made in the specified Lloyds litigation or of any original claims forms issued or to be issued in respect of Central Fund debt. By paragraph 8(2) the Court refused the application of the Names to discharge the order made by Creswell J on 27 April 2001, in which he dismissed the Names claims and refused permission to amend, but, in a passage in parenthesis, the Court stated that "for avoidance of doubt, nothing in that order shall prevent the Names or any of them making a further application for permission to amend to the Commercial Court".
 Thus, Lloyds was allowed to seek to enforce the judgments it had obtained against the Names while, at the same time, the Names were handed the opportunity to consider, and if appropriate, to apply to raise negligent misrepresentation claims. Such claims would be made as amendments in the Jaffray proceedings. Needless to say, the Court of Appeal was not in a position to consider and did not consider the strength of any negligent misrepresentation claim nor the impact, if any, such a claim might have on Lloyds future attempts to enforce the money judgments it had obtained.
 Both sides have made use of the opportunities made available to them by the Court of Appeal. In early November 2002, Lloyds served the statutory demands in issue here in an attempt to enforce the judgments it had obtained. At about the same time, a number of Names applied to amend to raise claims for negligent misrepresentation. This was resisted by Lloyds on a variety of grounds. Among other things, it relied upon the immunity given to it by virtue of s 14(3) of the Lloyds Act. It said that this immunity applied from the date of Royal Assent, namely 23 July 1982. Furthermore, it argued that none of the proposed claims had any realistic prospect of escaping the effect of the Limitation Act 1980 (the 1980 Act). Since, so it said, with certain exceptions, the proposed amended claims did not arise out of substantially the same facts as the facts pleaded in the Jaffray proceedings, no amendment to introduce them was permissible. Furthermore, even if the new claims did arise out of the same facts and matters pleaded in the Jaffray proceedings, they were time barred. At risk of great over simplification, old claims were caught by the 1980 Act, newer claims were caught by the immunity created by the Lloyds Act.
 The Names raised a significant number of arguments in response to these submissions. No purpose will be served by trying to précis them in this judgment. I only need to refer to one of them at this stage. For various reasons, and again at the risk of great over simplification, it was argued that the effect of the Human Rights Act 1998 (HRA 1998) was to make the court construe the Lloyds Act in such a way as to, in effect, remove any relevant immunity Lloyds might have.
 The application to amend came on for hearing before Cooke J on 26 March 2003. Some indication of the scope of the arguments advanced is given by the fact that the hearing lasted 11 days. Two days later, Cooke J gave a judgment which, to me at least, appears to have been written with great economy of style. For example, although reference is made to many of the authorities which had been cited, there is no extensive quotation from them. Notwithstanding this, the judgment runs to 78 pages, ignoring the schedules attached to it and contains 218 paragraphs of text. It is formidable.
 On most of the issues Lloyds won. Cooke J held that a majority of Names represented before him, referred to as the category 1 Names during the course of the argument before me, failed to obtain permission to amend. A somewhat smaller group of Names, the category 2 Names, did obtain, in principle, permission to amend, subject to them filing properly particularised claims which would need to be considered by the court. However, although the category 2 Names achieved some measure of victory, it was very limited in scope.
 Mr Bannister summarises the position as follows. First, a Name underwriting on more than 1 year of account suffered separate damage in respect of each year of account (paras - of the judgment). Secondly, the only Names with any realistic prospect of success, and thus of obtaining permission to amend, were those Names who had previously made claims for statutory negligent misrepresentation in the Lloyds brochure, as opposed to any other document in the Jaffray action, who had relied upon misrepresentations made within 15 years before their counterclaims were to be treated as having been commenced (because of the 15-year longstop provisions in s 14B of the 1980 Act) who had relied upon such representations in concluding arrangements with Lloyds and with underwriting agents before 23 July 1982 and who did not have the requisite s 14A knowledge earlier than 3 years before the commencement of their counterclaims (para (viii) of the judgment).
 As noted above, the category 2 Names did not thereby acquire an automatic right to amend to plead their counterclaim. Cooke J held that those Names would be given permission to amend only if they properly particularised the date of the operative representations and their reliance upon them and properly particularised a case on knowledge, such as to bring themselves within s 14A of the 1980 Act (see para (xv) of the judgment).
 In those circumstances, perhaps it is not surprising that during the short hearing at which his judgment was handed down, Cooke J commented that the category 2 Names had got home by the skin of their teeth. It should be noticed that the category 2 Names would not only have to address and overcome the particularisation hurdle set by the judge, but even if they did so, their counterclaims would be very severely limited. They would only be able to claim in respect of damages for the window between the application of the extended time limit under the 1980 Act and the commencement of Lloyds immunity under the Lloyds Act. This means that in all cases, the window of negligent misrepresentation in respect of which counterclaims may be possible, would be measured in months. This is particularly significant because in most, if not all cases, the permissible counterclaims would be worth significantly less than the sums in the relevant statutory demands.
 Cooke J refused permission to appeal. An application for permission has been lodged with the Court of Appeal. It is currently outstanding. That application is supported by a lengthy skeleton argument to which I will refer later.
 It is now necessary to go back in the chronology. It will be recalled that in November of last year, Lloyds issued the new statutory demands which are in issue here. Beside applying to amend to plead negligent misrepresentation, the Names applied to set aside those demands. In fact, as will be explained below, the relief sought by the Names went beyond simply asking for the statutory demands to be set aside. The Names pointed out that they had applied to plead new counterclaims on the back of the false representations which the Court of Appeal in Jaffray found to have been made by Lloyds and that, as in the Garrow proceedings, it would be wrong to allow the statutory demands to stand, which would rapidly lead to the service of bankruptcy petitions, while those counterclaims had not been adjudicated upon.
 Evidence was served in support of the applications to set aside. That included an affidavit of Michael David Freeman, the solicitor acting for many of the Names. It is dated 19 November of last year. In it, besides asserting that the negligent misrepresentation claims, if allowed to be pleaded and then successful, would overtop the sums covered by the statutory demand - not least because one of the heads of damage claimed is the Equitas premium - he suggested that the course being followed by Lloyds was not sensible, proportionate or consistent with proper case management. His affidavit neatly encapsulates the position taken by his clients. He said:
The application to amend the Counterclaim is pending and the Court will no doubt manage the Application efficiently. The hearing of the Application will inevitably last several days. No doubt at that Hearing Lloyds will deploy all of its arguments as to whether the Claims in negligent misrepresentation disclose a genuine triable issue. The Court will consider the Application in considerable detail. In the event that the Court felt that there was no genuine triable issue disclosed on the proposed amendments then no doubt Permission to Amend will be refused. The course being adopted by Lloyds in prematurely serving Statutory Demands will merely achieve a needless increase in costs. The proper form for an examination of the strength and the substance of the Counterclaim is at the forthcoming Application to Amend. In the event that the Application fails, then no doubt Lloyds will pursue its Statutory Demands at that stage. It is difficult to see what advantage is sensibly gained by proceeding at this stage in advance of the Application to Amend. To such extent as Lloyds may assert some advantage, that will be outweighed by the cost, lack of proportionality and procedural inefficiency of proceeding in the way that Lloyds is presently seeking to do. This is especially so given the relative disparity of funds available to Lloyds as compared to funds available to the various individuals faced with Statutory Demands.
 Sensibly, the parties agreed that is was not appropriate for the Names set aside application to be determined in advance of the application to amend the pleadings. Without making any concessions, Lloyds was agreeable to allowing the applications to set aside to stand over and to come on for determination after Cooke J had delivered his judgment on the amendment issues. Lloyds position was that the amendments proposed were hopeless. There was, therefore, no good basis upon which to set aside the statutory demands. Unsurprisingly, it says that this assessment has now been vindicated by Cooke J.
 In relation to the latter, it is worth bearing in mind what Cooke J was doing. He was not considering whether the Names would succeed in their claims for negligent misrepresentation, but only whether those claims were pleadable. The test he used was expressed by him as follows:
The essential question is therefore, whether or not the case which the Names wish to advance by way of amendment has a reasonable prospect of succeeding or is properly arguable. If it has no such reasonable prospect then the application should be rejected. If it has a real, not a fanciful, prospect of succeeding at the trial, then it is properly arguable and the amendment should be allowed. (judgment, at para )
 Mr Bannister suggests that it is also relevant to have in mind para 12.3 which is in the following terms:
Where the statutory demand is based on a judgment or order, the court will not at this stage go behind the judgment or order and inquire into the validity of the debt nor, as a general rule, will it adjourn the application to await the result of an application to set aside the judgment or order.
 Both counsel agree that, although r 6.5(4)(a) of the 1986 Rules is drafted in terms of what the court may do, this does not create a discretion. If the debtor appears to have a counterclaim which equals or exceeds the amount of the debt specified in the statutory demand, the court must set the demand aside. That was the limit of their agreement.
 Mr Callman puts forward three possible constructions of the Rule. His least ambitious argument is also his most persuasive. He says that what the court has to determine is whether there is a genuine triable issue on the counterclaim. Although Cooke Js judgment and his refusal to give permission to appeal may be taken into consideration, they are not determinative. On the other hand, the mere existence of an application to the Court of Appeal for permission to appeal is not enough to determine that a genuine triable issue exists. He says that a genuine triable issue exists if the application for permission to appeal and any appeal to be conducted if such permission is granted, amounts to an appeal of substance and weight.
 In relation to this issue, he drew my attention to a number of authorities. The starting point is Re Yeatman, ex parte Yeatman (1880) 16 Ch D 283. That was a case in which the bankruptcy proceedings had been commenced and the debtor had challenged the creditors debt. He had lost at first instance on that issue, but an appeal was pending. Translated to the modern procedures involving statutory demands, this was not an attempt to prevent the presentation of a bankruptcy petition, but an attempt to adjourn the hearing of that petition until after the determination of the appeal. It was, therefore, in substance an application like those covered by para 12.3 of the 1999 Practice Direction. In the Court of Appeal Cotton LJ, in considering the registrars power to adjourn, said:
But if he is satisfied that a real appeal from the judgment is pending, he ought, in my opinion, as was done in the present case, to adjourn the hearing of the petition until after the appeal shall have been disposed of.
 The next case chronologically is Re Noble (a Bankrupt) ex parte the Bankrupt v the Official Receiver and Another  Ch 129, in which Russell LJ said, at 145:
It seems to me that there is power to make a receiving order, where the petitioners debt is the subject of a pending appeal, although it should not be then made if the Registrar is satisfied that the appeal is bona fide
 Both these cases were considered by Harman J in Re a Debtor (No 799 of 1994) ex parte Cobbs Property Services Ltd  1 WLR 467,  BPIR 575. Once again, this was a para 12.3 case. Counsel for the debtor had submitted that the test was: Can the appeal be said to have some substance?. Harman J accepted that submission. He said, at 470 and 578C-E respectively:
Mr Patchett-Joyce shows me that the phrase "bona fide" [in the headnote in Re Noble] comes from the headnote in Re Yeatman 16 Ch D 283. The phrase of Cotton LJ himself was "a real appeal". That has been followed and applied in cases more recently, and the test advanced by Mr Patchett-Joyce, which in my judgment is the correct way to look at the matter for the purpose of the registrar considering whether to exercise the power which he has to adjudicate upon the bankruptcy petition or whether to adjourn that petition pending an appeal, must turn upon the registrars consideration as to whether the appeal was serious and whether the appeal was being taken seriously. Mr Patchett-Joyces words are, in my opinion, entirely apt. Serious appeals are real appeals, to use Cotton LJs phrase, and could be called bona fide appeals; that is, appeals properly worth considering and raising a point of law or other relevant appellate ground of substance.
And, at 471 and 578G respectively:
When I consider that test, and without involving the court in a mini-trial, which should not be undertaken for the purpose of this decision, it seems to me quite clear that there is a serious point of construction raised on appeal from Master Trenchs judgment. Whether that point is right or wrong is not a thing I ought now to consider, merely that there is a serious appeal.
 By 1994 Hoffman LJ was able to summarise the practice as follows in Royal Bank of Scotland v Farley  BPIR 638, at 641:
The bankruptcy procedure has ample safeguards built into it for enabling the bankrupt to challenge the existence of the debt. He may, as I say, do so on an application to set aside the statutory demand. If he has a bona fide appeal or application to set aside the judgment in existence at the time when the petition comes on to be heard, it is the invariable practice to adjourn the hearing of the petition until that application or appeal has been decided.
 Mr Callman argues that the terminology does not matter. Whether one talks in terms of real or bona fide appeals or appeals which are serious and are being taken seriously, where such an appeal exists, the court must allow the debtor to pursue it. At the stage of a statutory demand, this means that the court must accede to an application to set aside. The court is therefore obliged to consider whether there is a non-frivolous appeal which is being conducted seriously. In doing that, the court must not engage in a mini trial but it must get sufficient feel for the issues which the debtor wishes to raise in order to determine whether the appeal is sufficiently serious, real or bona fide. If it is then the counterclaim raises a genuine triable issue within the meaning of para 12.4 of the 1998 Practice Direction.
 I understand Mr Callman to go further than this. He relies on Clifton v Barclays Bank plc  BPIR 565 in which a statutory demand was set aside. The headnote records that this was because the debtor might have a counterclaim. The way Mervyn-Davies J expressed it in his judgment was, at 570:
it may well be that submissions could be made to the effect that [the debtor] has a substantial counterclaim.
 Based on this, Mr Callman suggests that a statutory demand could be set aside in a situation like this even if the appeal was not substantial, as long as it could be said that the debtor might have a counterclaim. Whatever the correct test for determining whether a counterclaim is genuinely triable, in my view it cannot be as low as this, nor do I read Mervyn Davies J as so holding. I will concentrate on Mr Callmans less ambitious argument that a counterclaim is genuinely triable if there is a real, substantial or bona fide appeal seeking the introduction of that counterclaim.
 Mr Callman argues that construing the 1986 Rules in accordance with his submissions is to be encouraged because it is consistent with the HRA 1998. The Names are entitled to have access to the appeal procedure made available under our court rules. The almost inevitable result of the failure of this application would be that the Names would be deprived of their right to pursue the appeal process to its natural conclusion.
 Mr Bannister argues that this is an illegitimate construction of the 1986 Rules and the 1999 Practice Direction. He has taken me through a tour of the history of the use of statutory demands in relation to bankruptcy proceedings and he argues that the authorities relied upon by Mr Callman, with the exception of Clifton v Barclays Bank plc  BPIR 565, are all cases in which what was at issue was an appeal in relation to the judgment which created the judgment debt. Very different considerations apply to these sort of cases.
 As he explains, the current rules make it clear that once a statutory demand exists it creates a rebuttable presumption that the money is owed. Furthermore, where the statutory demand is based on a judgment debt, unless and until the judgment debt is set aside, the existence of the debt and that it is owed to the creditor is not open to dispute. Any attempt to challenge the debt has to be made at the time of the hearing of the petition, which is consistent with the 1999 Practice Direction, para 12.3. At the hearing of the petition it is open to the debtor to challenge the judgment debt. It is in this context that Re Yeatman, ex parte Yeatman (1880) 16 Ch D 283 and the other authorities relied on by Mr Callman come into play. They indicate the level at which one must challenge a judgment debt. They throw no light on whether there is a genuinely triable issue as to whether the debtor has a counterclaim of sufficient merit and size to equal or exceed the debt set out in the demand.
 Mr Bannister develops the latter point as follows. Rule 6.5(4)(a), when read in conjunction with para 12.4, is dealing with cases where there has not been a judicial determination of the counterclaim. Appeals from, or application to set aside, judgment debts are dealt with at the hearing of the petition. Arguments that there is a triable counterclaim arise at the set aside stage. In this respect the terminology is important. Paragraph 12.4 refers to triable issues, not appealable ones.
 Translated to the facts of this case, there has been a judicial determination that the issues which the Names wish to raise are not triable. It is not open to me, nor am I being asked, to determine that Cooke J was wrong. Even if I were, the fact is that he has listened to 11 days of argument. I have heard very little. Indeed, Mr Bannister has only touched very lightly on one or two of the issues considered by the judge, but then only to give me a flavour of why Lloyds is confident that Cooke Js judgment is correct.
 The profound differences in these submissions can be appreciated by the limited concessions each side is prepared to make. Mr Callman concedes that, on his analysis, the application to set aside will fail if either the Court of Appeal refuses permission to appeal or, if it gives permission, the appeal fails. Save in those cases, the question is only whether there is a serious appeal or appeal process being advanced seriously by the Names. On the other hand, Mr Bannister only concedes that there will be a genuine triable issue if the Court of Appeal both gives permission to appeal and allows the appeal on points of substance. It is only in those circumstances that para 12.4 of the 1999 Practice Direction is engaged. This means, as he readily accepts, that, even were the Court of Appeal to give permission to appeal, before the appeal is determined there is no jurisdiction to set aside the statutory demand. Until such final determination, there is a judgment binding on all the parties that the Names claims are, in substance, not sufficient to be pleadable or triable. As Mr Bannister said in the course of his submissions, this would be so, even if, at the time of giving permission to appeal, the Court of Appeal were to express strong misgivings as to the correctness of Cooke Js judgment on matters of substance.
 Mr Bannister says this is not as unfortunate a result as it may at first appear. If the Court of Appeal were to grant the Names permission to appeal, it could always order that all further steps in the bankruptcy petition be stayed, pending the outcome of appeal. Similarly, Cooke J could have ordered a stay, but he did not. As Mr Bannister puts it, it is not for this court to impose a stay where other courts have not.
 These are not complete answers to the point. Most importantly, in many cases, of which this may well be one, the Court of Appeal may well not consider the application for permission to appeal before the creditor has launched the bankruptcy proceedings. The fact that those proceedings may be stayed does not address the desirability in suitable cases of avoiding the harm which is likely to be inflicted on the debtor by the presentation of the petition.
 In coming to a conclusion on the issues surrounding the application of r 6.5(4)(a), it is convenient to start at a fairly basic level. When an attempt is made to bankrupt an individual, it is a defence for that individual to demonstrate that his net indebtedness to the creditor is zero, or more precisely, below the bankruptcy limit of £ 750. This can be done in either of two ways. First, the debtor can demonstrate that there is no debt. Secondly, he can demonstrate that the debt is matched or exceeded by sums owed to him by the creditor. He could put forward a mixture of the two. Whichever ground or grounds he advances, the purpose is to demonstrate zero net indebtedness. The 1986 Rules and case-law impose procedures which indicate how and when the debtor can raise his objections to the bankruptcy procedure.
 Rule 6.5(4) of the 1986 Rules indicates that all objections, including the existence of a counterclaim and the disputing of the debt, can be raised at an early stage as grounds for setting aside the statutory demand. This means the petition will not be presented. However, there are refinements to this. First, where the indebtedness is challenged on grounds available under r 6.5(4), the debtor is obliged to get on with the challenge (see 1999 Practice Direction, para 12.1). Secondly, and more importantly, it is not appropriate to adjourn the challenge so that it can be raised on the hearing of the bankruptcy petition. In other words, the challenge should be assessed before the petition is issued. This was explained by Chadwick LJ in Turner v Royal Bank of Scotland  BPIR 683. Having referred to the Practice Note (Bankruptcy: Statutory Demand: Setting Aside) (No 1/87)  1 WLR 119 which is, in substance, the same as the 1999 Practice Direction, he said, at 693:
That note reflects the practice, long-adopted in the bankruptcy courts and in the companies court - in the context of petitions to wind-up companies, that insolvency proceedings are not the proper forum in which to determine issues in relation to disputed debts or cross-claims. If there is an issue which can be described as "a genuine triable issue", then that ought to be resolved by a trial before the insolvency process is invoked. But it is important to have in mind that para 4 of the Practice Note refers to a counterclaim, set-off or cross-demand which equals or exceeds the amount of the debt or debts specified in the statutory demand. There has to be a genuine triable issue on the question whether the amount of the cross-demand will exceed the amount of the debt specified in the statutory demand.
 He went on to state that once these challenges had been mounted at the set aside stage, they could not be argued again in the hearing of the bankruptcy petition. The effect of this is to require challenges which are capable of being levelled at the statutory demand, to be made at that stage and to be evaluated by the court at that stage.
 The same point was made, and the reasons for it explained, in the judgment of Robert Walker LJ in Re a Debtor (No 544/SD/98)  1 BCLC 103, at 116-117:
Although Lloyds has a judgment against G, it has chosen to proceed by way of a statutory demand and the statutory demand is crucial to the making of a bankruptcy order. It would be contrary to the scheme of the legislation, and to the practice of the bankruptcy court, to allow a doubtful statutory demand to stand on the ground that the debtor would still have the opportunity of opposing a bankruptcy petition, once presented. Counsel for Lloyds have argued that that course would enable Lloyds to present a petition and so establish a date by reference to which transactions might be invalidated or impeached under ss 284 and 339 (and following) of the Insolvency Act 1986, while protecting G by an adjournment of the final hearing of the petition. However, it is precisely because of the far-reaching effect of those sections (and comparable sections in the winding up legislation) that the bankruptcy court and the companies court have a strong and well-established policy of discouraging long or repeated adjournments of bankruptcy and winding-up petitions. The judge was right to reject the suggestion that he should allow a petition to be presented and then go into suspended animation.
 The other major refinement is that a different regime applies where the debtors attempt to demonstrate net zero indebtedness involves attacking a judgment debt. Perhaps because, as Mr Bannister says, as between the debtor and the creditor the judgment debt creates an issue estoppel, such a debt cannot be impugned prior to the presentation of the petition. This is expressly provided for in the 1999 Practice Direction, para 12.4. Thus, the procedure applied to these proceedings ensures that most challenges have to be mounted at the set aside stage. This includes all challenges based on the existence of an alleged counterclaim and most challenges to the existence of the debt itself. It is only one particular category of debt, namely judgment debts, which have to be challenged at the petition stage.
 Although this means that different challenges are to be considered at different stages, there is nothing in the 1986 Rules or authority to suggest that the courts assessment of the seriousness of the challenge should differ from one stage to the other. On the contrary, there is every reason why the height of the hurdle the debtor has to negotiate should be substantially the same at whichever stage he mounts his challenge. There can be no doubt, for example, that challenges to the debt which have to be brought at the set aside stage (r 6.5(4)(b)) have to demonstrate a genuine triable issue (1999 Practice Direction, para 12.4). There is no reason why the debtors challenge should have to reach a different level of substantiality when he challenges the debt (that is, in the form of a judgment debt) at the petition stage.
 If this is correct, then there is no difference of substance between the extent to which the debtor needs to show he has a triable counterclaim or challenge to the debt at the set aside stage and the extent to which he needs to show he has a ground for appealing or setting aside a judgment debt at the petition stage. If the debtor, at the petition stage, challenges a judgment debt, it is no answer to say that, pending a successful appeal, the original judgment binds the parties. Cases such as Re a Debtor (No 799 of 1994), ex parte Cobbs Property Services Ltd  1 WLR 467,  BPIR 575 factor in the reality that sometimes judgments are reversed on appeal.
 The question to ask at the set aside stage is whether the debtor has raised a genuine triable issue. The fact that at first instance a judge has held the issue to be too insubstantial to be allowed to be pleaded is an important factor in deciding whether the issue is genuinely triable but it is not determinative. If an appeal process is on foot, the court must decide whether it is a real, as opposed to a frivolous, appeal. Once again, the fact that the first instance judge refused permission to appeal is a factor to take into account in deciding whether the appeal is real, but it cannot be determinative.
 How, then, does one respond to Mr Bannisters point on the use of the word triable and not appealable in the 1999 Practice Direction, para 12.4? A simple answer is that there is nothing to suggest that the draughtsman of the paragraph had in mind and intended to draw distinctions between trials and appeals. Most challenges at the set aside stage will not have entered the list at all, let alone reached the level of an appeal. This litigation is likely to be somewhat unusual in that respect.
 A more involved answer can be given by reference to an example. It will be recalled that Mr Bannister argues that unless and until reversed by the Court of Appeal, Cooke Js judgment means that, as between the parties, the negligent misrepresentation claims are not sufficiently substantial to go to trial. They are, in the language of para 12.4, untriable. The result is that even were the Court of Appeal to grant permission to appeal and at that stage to express grave misgivings about the first instance judgment, the position would remain unchanged. Until successful on the appeal, the debtors counterclaim is not triable and the court has no jurisdiction to set aside the demand. Mr Bannister accepts that this might appear hard on the debtor but it is the inevitable consequence of the way the provisions are written. As Mr Callman points out, not only would this be hard on the debtor, it also would be arbitrary. If the appeal process were to be speeded up and the application to set aside slowed down, it might be possible to obtain a favourable judgment from the Court of Appeal before the court has to determine whether the counterclaim is triable.
 Mr Callman provides an answer to this point of construction. It is not in dispute that were the Court of Appeal to give permission to appeal and to allow the subsequent appeal on points of substance, at that stage it would be clear and determined once and for all, ignoring the possibility of appeals to the House of Lords, that the counterclaim is triable. If it is triable at that stage, it has always been triable even though at earlier stages that may have been less easy to discern. The position after the decision at first instance is that the judges decision to refuse permission to plead the counterclaim is a major factor in determining whether the counterclaim is triable but is not the final word.
 For these reasons, I have come to the conclusion that Mr Callman is correct in saying that Cooke Js judgment and his decision not to give permission to appeal are not determinative of whether the Names proposed counterclaims raise a genuine triable issue. It is necessary to take into account the fact that an application for permission to appeal has been lodged with the Court of Appeal and to assess whether the appeal which the Names wish to pursue is a real bona fide and non-frivolous one. In these circumstances it is not necessary to consider Mr Callmans argument that the construction of the 1986 Rules should be modified to accommodate HRA 1998 considerations.
 On the issue of whether the Names appeal here is substantial or real, I have been taken at some length through the skeleton argument which the Names have served in support of the application for permission to appeal so as to appreciate at least some of the major arguments which the Names intend to raise. Whether or not this exercise was necessary, or necessary in the detail with which Mr Callman conducted it, is academic because Mr Bannister has chosen not to challenge this part of his opponents submissions. Although it is clear that Mr Bannister considers that some of the Names argument, including in particular the HRA 1998 arguments designed to circumvent the effect of the Lloyds Act, to be hopeless, he does not argue that, taken as a whole, the appeal could be dismissed as frivolous or other than real. In the result, Mr Callman succeeds in relation to his r 6.5(4) argument.
 I would only add that, had I not been prepared to set aside the statutory demands, I would almost certainly have refused to exercise any discretion I have under the CPR to stay these proceedings so as to achieve an equivalent result by the back door. If the effect of the 1986 Rules is to prevent the court from setting aside the statutory demand, it would not be appropriate to try to undermine the legislative intent by use of the CPR. For very similar reasons, it is most unlikely that I would have felt it appropriate to exercise the power under r 6.5(6) in a way which appears to be contrary to its purpose.
 I would only add a few points. First, of course, if the application to the Court of Appeal for permission to appeal is unsuccessful, it will be open for Lloyds to serve new statutory demands. Secondly, if permission is granted, but the appeal is unsuccessful, subject to any questions concerning appeals to the House of Lords, again Lloyds will be able to serve new statutory demands. Thirdly, if permission is granted and the appeal is wholly successful, as Mr Bannister accepts, it will not be appropriate to serve new statutory demands.
 On the other hand, if the appeal is successful, but only in part, it may be that it would be open to Lloyds to serve new statutory demands. For example, if the Names were only to be successful on the issue of the commencement date of the Lloyds Act with the result that the period of negligent misrepresentation, in respect of which they could sue, is expanded by a few months, then it may well be that any counterclaim based on that would be too small to match the sums in the statutory demands.
 I should also say something about the undertakings offered by the Names in respect of the limitation period for the presentation of bankruptcy petitions. The precise form of these was not finalised or discussed before me and in any event, Lloyds is not prepared to accept them since they do not meet its concerns. In the circumstances, I shall set aside the statutory demands but without requiring any undertakings from the Names. The absence of any safeguard for Lloyds in relation to the limitation period is, however, a concern. For what it is worth, this is a matter which should be drawn to the attention of the Court of Appeal. It may affect the timing of consideration of the application for permission to appeal and the appeal, if there is one.