Caveat Creditor…

Following a lengthy consultation period, the Ministry of Justice has now published the new Pre-Action Protocol for Debt Claims (‘the Protocol’). This will be of general interest to everyone, but perhaps particularly to landlords with individual tenants.

The Employment Appeal Tribunal has recently made some significant decisions which have increased the value of payments to be made to employees, including in insolvency situations. Below, we highlight the key facts you need to know.

(1) Additional elements to be included when calculating holiday pay

When goods are delivered to a professional storage operator (“Warehouseman”) for safe keeping or storage, it is usual practice that the parties will enter into express terms which often contain a right of lien in favour of the Warehouseman. The benefit of having an express right of lien is that the terms are clear and unequivocal, especially those relating to enforcement of the lien and sale of the assets.

When you are not the only lender to a company or group, it can be daunting trying to fairly balance the commercial needs of the other creditors and at the same time make sure you are protecting your own position. Below are Gateley’s top tips for dealing with intercreditor arrangements.

1. Get the terminology right

A recent case shows how a company’s Articles of Association, a document which defines the duties and responsibilities of members, must be adhered to when directors are exercising their powers.

The court had to consider whether a sole director of a company, whose articles required two directors for its board meeting to be quorate, could validly pass a resolution to appoint administrators under the Insolvency Act 1986 and, if not, whether the Duomatic principle could validate the appointment.

This interview was conducted by Lucy Trevelyan at LexisNexis. The views expressed by the interviewees are not necessarily those of the proprietor.

Property Analysis: A recent Court of Appeal decision on the payment of service charges, while correct in principal, was wrong on the facts, according to Peter Petts, barrister at Hardwicke Chambers.

Original News

Skelton and others v DBS Homes (Kings Hill) Ltd [2017] EWCA Civ 1139, All ER (D) 196 (Jul)

On 1 October 2017, the Pre-Action Protocol for Debt Claims (Protocol) will come into force. It will apply to all debt claims where:

• the creditor is a business (including sole traders and public bodies)
• the debtor is an individual (including sole traders), and
• no other specialised Protocol applies.

Why is this new Protocol being introduced?

The express purpose of the new Protocol is to:

The Pre-Action Protocol for Debt Claims comes into force on 1 October 2017. This note deals with the key elements to be aware of.

Applicability

While the Protocol is named the Pre-Action Protocol for Debt Claims the first thing to note is that it only applies to businesses claiming payment of debts from an individual (including individual sole traders) and does not apply to business-to-business debts.

The English Court of Appeal has recently decided that a corporation that held shares in a company remained a shareholder notwithstanding the shareholding company's dissolution.

BWE Estates Limited had two shareholders: an individual named David who held 75% of its shares and a company, Belvedere Limited, which held the remaining 25%. Although Belvedere was dissolved in 1996, it remained listed as a shareholder in BWE's share register.

The recent Court of Appeal decision in Saw (SW) 2010 Ltd and another v Wilson and others (as joint administrators of Property Edge Lettings Ltd) is the first case to address the effect of automatic crystallisation of an earlier floating charge upon a later floating charge.