Criminal prosecutions for administrators are rare, and rarer still are prosecutions under employment legislation. However, a recent decision has confirmed that an administrator can be prosecuted and personally liable for a failure to notify the Secretary of State of proposed collective redundancies under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

We have previously reported on the developing area of adjudication by insolvent companies, now the subject of another key judgment. In Balfour Beatty Civil Engineering Limited and Astec Projects Limited (in liquidation) [2020] the Technology and Construction Court (TCC) has provided a further clear example of the type of strict conditions that will need to be satisfied to enable such adjudications to proceed.

In our update this month we take a look at some recent decisions that will be of interest to those involved in insolvency litigation. These include:

The Court of Appeal has recently overturned a High Court decision and limited the circumstances in which an After the Event (ATE) insurance policy can be used to defeat an application for security for costs. What should claimants and defendants consider when deciding whether to offer or accept such a policy?

APPLICATIONS FOR LEAVE TO APPEAL GRANTED

37323

James Chadwick Rankin, carrying on business as Rankin’s Garage & Sales v. J.J. by his Litigation Guardian, J.A.J., J.A.J., A.J.

(Ont.)

Torts — Negligence — Duty of Care — Motor vehicles

In Paul L. Schnier v. Her Majesty the Queen,[1]  the Tax Court of Canada (TCC) dismissed a motion to quash an appeal brought on the basis that the appellant did not, as an undischarged bankrupt, have the capacity, pursuant to Section 71 of the Bankruptcy and Insolvency Act, to deal with property, including the ability to bring an appeal. The Appellant believed he was required to file the appeal, but did not obtain the trustee in bankruptcy’s permission when he commenced the appeal.

The Court of Appeal has decided that rent accruing during a period of administration should be treated as an expense of the administration, irrespective of the date on which it falls due for payment. Administration expenses are paid by administrators in priority to liabilities owed to holders of security.

 Valuation evidence

The court has reaffirmed that comparable sales evidence is the best evidence when determining the retrospective valuation of a property.

GFI Acquisition, LLC v. American Federated Title Corp., 2010 Bankr. LEXIS 1217

An action was brought by the plaintiff alleging that the defendants breached an agreement of purchase and sale by failing to disclose provisions in the agreement which would operate to lock the plaintiffs out of subsequent negotiations to refinance loans on the properties to be assumed on the date of closing.

A question facing many landlords is whether, when a tenant company faces insolvency and shows no intention of continuing to trade from the premises, they should take back the property and seek to relet it?

There are several key issues here, including:

• rates liability
• mitigating losses
• ability to recover from third parties and former tenants.

A landlord's decision has often turned on the type of insolvency faced by the tenant.

If a liquidator disclaims the lease: