Current Law Cases

Scope	Lloyds Names; stay of execution of statutory demand allowed where liability to pay reinsurance premium equalled counterclaim
Case	Garrow v Society of Lloyd's
Court	(Ch D) Chancery Division
Jurisdiction
Judgment	June 10, 1999
Judges	Jacob, J.
Legislation	Lloyd's Act 1982 s.14; Supply of Goods and Services Act 1982 (c.29) s.13; Treaty of Rome 1957 Art.85
Reported	[1999] B.P.I.R. 668
Reference	Times, June 18, 1999
Abstract	L served on G, a Lloyd's Name, a statutory demand amounting to GBP 196,167.13 in respect of G's underwriting liability and a judgment debt arising from G's liability for his premium for compulsory reinsurance under the Equitas scheme. G applied for an order to stay execution of the demand on the basis of a counterclaim against L. The reinsurance contract clearly restricted the right of a Name to refuse the payment of the Equitas premiums and specifically stated that the premium would be paid notwithstanding any counterclaim or set off and that any stay of execution would be waived. Held, allowing the application, that the statutory demand was set aside. The power of the court to order a stay of execution was available where the interests of justice so required. On the assumption that the plaintiff had a good counterclaim, his damages would equal his liability. The rule in both insolvency law and company law was that a demand should be set aside where the counterclaim equalled or exceeded the liability and there was no reason why a similar principle should not apply in the present case as it would be unfair to impose the effects of bankruptcy on a party who might have a perfectly good counterclaim.
Subject	Insurance
Keywords	Lloyds Names, Reinsurance, Statutory demands, Stay of execution
Counsel	For G: Charles Purle Q.C. and Lawrence Jones. For L: Lexa Hilliard
Solicitors	For G: Grower Freeman & Goldberg. For L: Philip Coldbeck
Transcript	544/SD/98
Joined cases	Bloom Camill