This week’s TGIF considers the recent decision of Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305 in which the Court held that privilege attached to an expert report prepared for the purpose of obtaining litigation funding.
WHAT HAPPENED?
This week’s TGIF considers Re Akron Roads Pty Ltd (in liq) (No 3) in which the Court held that the liquidators had standing to seek a declaration against an insurer arising from the assignment of rights under a policy.
WHAT HAPPENED?
The previous High Court decision
This week’s TGIF considers State of Victoria v Goulburn Administration Services (In Liquidation) and Ors [2016] VSC 654, in which Special Purpose Liquidators were appointed despite a potential conflict arising from their firm having conducted compliance audits of the companies.
Background
In the decision of Re Arcabi Pty Ltd (Receivers & Managers Appointed) (in liq) [2014] WASC 310 the court considered:
- the application of the Personal Property Securities Act 2009 (Cth) (PPSA) to goods being held on a bailment or consignment basis by a company in receivership and liquidation; and
- the receivers’ rights to be indemnified for costs and expenses related to investigating and protecting the property of third parties.
What is the significance?
Phones 4u went into administration on 15 September 2014 following a decision by EE not to renew its contract. At the time of writing, all 560 stores and 160 concessions have been closed, pending a decision by the firm’s administrator whether to continue trading or break the company up in deals with, amongst others, EE and Vodafone.
This week the Court of Appeal has heard the long awaited appeal in Jervis and another v Pillar Denton Limited (Game Station) and others, better known as the Game Station case, which (depending on the outcome) may trigger a drastic change to the way in which rent in administration is treated.
Gym chain Fitness First is the latest high street name to propose a company voluntary arrangement (CVA) to its creditors. The chain currently runs more than 140 clubs in the UK but the arrangement proposes that 67 will be transferred to other operators within six months. Landlords will be reviewing the terms of the proposed CVA carefully.
A CVA is an agreement reached by a corporate debtor with its unsecured creditors. It is generally seen as a quicker and less formal route out of trading difficulties than administration.
Key points
- The High Court has ruled that, where a tenant goes into administration, rent which is payable in advance and falls due before the commencement of the administration is not recoverable by the landlord as an administration expense
- Landlords must take their place with other unsecured creditors in relation to sums payable before the appointment of administrators, even if they relate to a period during which the administrators had use of the property
Background