Introduction

The recent decision of Andrew Burrows QC, sitting as a Judge of the High Court, in Palliser Limited v Fate Limited (In Liquidation) [2019] EWHC 43 (QB), is a useful reminder of the difficulties that can arise where one party (here a tenant) relies on another (its landlord) to take out insurance.

The Facts

In 2010, a fire started at the ground floor restaurant owned and operated by a company called Fate Limited (“Fate”). It was not in dispute that the fire was caused by Fate’s negligence.

This case concerned both the appeal in Bresco v Lonsdale and Cannon Corporate v Primus Build. The present case comment is only concerned with the former.

Background

Bresco appealed to set aside the order of an injunction from Fraser J. That injunction prevented the continuation of an adjudication in which Bresco and Lonsdale (in liquidation) sought sums from each other in claims and cross-claims.

Trustees should be careful when disclaiming assets after bankruptcy, after a High Court ruling blocked an application on a property that turned a significant profit when sold.

The case in question is Sleight v The Crown Estate Commissioners [2018] EWHC 3489 (ch).

The facts 

The Applicant in Sleight was the trustee in bankruptcy (the Applicant). The Respondents were The Crown Estate Commissioners (the Respondents).

Insolvency Set-Off and Construction Contract Adjudications in light of Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (electrical) Ltd; Cannon Corporate Ltd v Primus Build Ltd [2019] EWCA Civ 27

[2019] EWCA Civ 27

The Cannon case was heard at the same time as the Bresco appeal, although if searching for it, the case will be found under the Bresco name and reference. Here, there was a lengthy procedural history culminating in Cannon resisting summary judgment of an adjudication decision on the basis that Primus might not be able to repay the sums, because Primus was in a CVA. The Judge at first instance said:

In its recent decision in LBI EHF v Raiffeisen Bank International AG [2018] EWCA Civ 719, the Court of Appeal confirmed the wide discretion enjoyed by a non-defaulting party under the default valuation provisions in the Global Master Repurchase Agreement (2000 edition) (“GMRA”) when it comes to determining the “fair market value” of securities.

In particular, when assessing “fair market value”, the non-defaulting party is entitled to have regard to any distressed or illiquid market conditions that were being experienced at the relevant time.

Re SHB Realisation Ltd (formerly BHS Ltd); Wright and another (as joint liquidators of SHB Realisations Ltd (formerly BHS Ltd)) v Prudential Assurance Companies Ltd [2018] EWHC 402 (Ch); [2018] All ER (D) 58 (Mar)

Synopsis

The Court of Appeal has issued a welcome clarification of rules regulating the payment of dividends to shareholders in Global Corporate Ltd v Hale [2018] EWCA Civ 2618.

Facts

The case was appealed from the ruling of Judge Matthews in the High Court [2017] EWHC 2277 (Ch). At issue were several payments made by Powerstation UK Limited (the “Company”) to Mr Hale, who was a director and shareholder of the Company at the relevant times.

Daniel Gatty discusses the recent High Court ruling in Leon v Her Majesty’s Attorney General and others [2018] EWHC 3026 (Ch) and its impact on the grant of vesting orders following the disclaimer of a lease.

Readers of this column will be aware of the complications that can ensue when a lease is disclaimed by a tenant’s liquidator under section 178 of the Insolvency Act 1986 (IA 1986), by a tenant’s trustee in bankruptcy under section 315 of the IA 1986 or by the Crown under section 1013 of the Companies Act 2006 (CA 2006) following dissolution of a tenant company.

The High Court has recently considered a number of questions of contractual construction in the context of guarantees: Barclays Bank plc v Price & Ors [2018] EWHC 2719 (Comm).