High Court blocks winding-up petitions despite undisputed construction debt

The High Court of England and Wales has restrained Ilyrian Construction Ltd from presenting winding-up petitions against Amber Construction Services Limited over two unpaid construction debts, finding that a substantial cross-claim arising from one project could defeat a petition based on a separate contract, even where the underlying debt was not genuinely disputed. Chief Insolvency and Companies Court Judge Briggs also ruled that an invalid payment application could not trigger a payment obligation and that a subsequent final payment process could not revive a time-barred interim debt.

The dispute arose from subcontracting works carried out by Ilyrian for Amber at the Alton Estate in 2019 and Mander Court in 2021. Ilyrian served statutory demands in November 2025, ultimately relying on £27,119.90 for Alton and £39,329 for Mander. Amber sought injunctions under rule 7.24 of the Insolvency (England and Wales) Rules 2016, arguing that the Alton payment application was invalid, the claim was statute-barred and it had a substantial cross-claim for delays and defective workmanship.

In respect of Alton, the Court found that Ilyrian's payment application failed to comply with mandatory contractual requirements, including identifying the purchase order, project and site. Applying Netomnia Ltd v MJ Quinn Integrated Services Ltd [2026] EWHC 1824 (TCC), Judge Briggs held that contractual payment notice requirements must be enforced as written and could not be disregarded merely because the recipient understood that payment was being sought. The Court also accepted that Amber had a genuine and serious cross-claim of £62,203.39 arising from alleged delays, under-resourcing and defective workmanship. Although the claim lacked detailed supporting costings, contemporaneous default and payment notices demonstrated that it was not manufactured in response to the statutory demand.

The Court further held that, even if the Alton payment application had been valid, the claim would have become statute-barred at the expiry of 11 March 2026 at the latest. Ilyrian's argument that the limitation period was deferred until a final payment notice was issued was rejected. Judge Briggs found that interim payment obligations constitute separate debts, with limitation running from the date each payment falls due and remains unpaid. A final account does not revive an interim debt that has already become statute-barred, and service of a statutory demand does not stop time running.

The position was different at Mander Court, where the Court found that the full £39,329 debt was due and owing. Amber's proposed deductions for missing fire certification, rectification costs and overheads were insufficiently substantiated to establish a genuine and substantial dispute. Nevertheless, the Court held that Amber's Alton cross-claim, which Amber calculated at a net £47,728.01, exceeded the Mander debt and could be relied upon despite arising under a different contract. The cross-claim involved the same parties in the same capacities, satisfying the relevant mutuality requirement.

Granting final injunctions in respect of both statutory demands, Judge Briggs confirmed that a genuine and serious cross-claim need not arise from the same transaction as the petition debt, provided it equals or exceeds the amount owed.

Read the decision here.

Nicholas Towers of Selborne Chambers (instructed by Lawrence Stephens) acted for Amber, while Michael Woollcombe-Clarke (instructed by Direct Access) acted for Ilyrian.