Even where formalities required by a statute are peremptory, not every deviation is fatal. The question remains whether the object of the statutory provision has been achieved.
The facts of Cowan v Hathorn illustrate the point. Section 32(1)(b) of the Insolvency Act 1936 provides that, if a trustee fails to sue, a creditor may take over a claim against the third party. The creditor must indemnify the trustee against all costs of the litigation.
The question remains whether the object of the statutory provision has been achieved
The facts of the case
The creditor commenced the litigation before actually indemnifying the trustees against costs. The indemnity was offered prior to the proceedings but the indemnity was only finally lodged after the action began. It covered all costs incurred as a result of the litigation. The court found that the liquidators were adequately protected at all times against any costs order. There was therefore sufficient compliance with the peremptory requirement.
The modern solution-driven approach of the courts has helped a lot in achieving sensible results but strict compliance is always safest.
