In a landmark decision Pillar Denton Ltd and Others v Jervis and Others [2014] EWCA Civ 180, a group of the UK's largest landlords have successfully overturned previous High Court cases that had allowed insolvent tenants to continue trading from their premises without paying rent. The landlords in this case, which involved the retailer GAME, have been allowed to recover £3,000,000 in outstanding rents from the period of the tenant's administration.
But is it GAME over?
Pillar Denton Ltd and Others v Jervis and Others [2014] EWCA Civ 180
Summary – What happened?
A group of the UK's largest landlords have successfully overturned previous High Court decisions that had allowed insolvent tenants to continue trading from their premises without paying rent. The landlords in this case, which involved the retailer GAME, have been allowed to recover £3,000,000 in outstanding rents from the period of the tenant's administration.
Key point
An English winding up does not cease to have effect when an overseas company is dissolved under the law of its state of incorporation.
The facts
Agrenco Madeira – Comercio Internacional LDA (the "Company") was incorporated under the laws of Portugal in March 2004. The Company presented a winding up petition in England in August 2009. Its centre of main interests was in Brazil and therefore the EC Regulation on Insolvency Proceedings did not apply. The Company was wound up in England as an unregistered company in October 2009.
Key point
Under English law there is a clear public interest in ensuring the timely and efficient administration of insolvent estates and parties should comply with all time limits in the Insolvency Rules 1986 unless there are good reasons for requiring more time.
The facts
Key point
The equitable rules designed to protect guarantors from amendments to the original financing agreements made without his consent do not apply to indemnities under English law.
The facts
A company entered into factoring arrangements. The directors entered into indemnities in favour of the factor.
Key point
Under English law a pre-pack sale of assets by administrators should be considered to be a "sale implemented under a court approved process."
Facts
The company was put into administration by an order of the court, and an order was made granting the administrators liberty to enter into an immediate pre-pack sale of all of the company's assets.
Key point
Only a current liquidator or a current creditor has standing in an English liquidation to pursue a claim under section 212 of the Insolvency Act 1986 ("IA 86"). A former liquidator has no standing to apply to court to expunge a proof of debt (Insolvency Rule 4.85).
The facts
Blue Monkey Gaming v Hudson & Others
Insolvency professionals will welcome the High Court's decision in Blue Monkey Gaming Limited v Hudson & Others [2014] which is clear authority that the onus is upon retention of title claimants, not administrators, to locate and identify retention of title goods. The court made clear that to require the administrator to identify retention of title goods would be "totally unrealistic and practically unworkable."
In the past, HMRC has allowed insolvency practitioners to cancel the VAT registration of businesses at an early stage and account for VAT on any subsequent supplies using form VAT 833. HMRC has received legal confirmation that a deregistered business cannot issue a valid VAT invoice, which could result in VAT registered buyers of assets from insolvent businesses being denied claims for input tax. As a result, HMRC will no longer allow the early deregistration of insolvent businesses.
Key point
Under English law it is now clear that, in order to trace monies through bank accounts, it is not necessary that payments should occur in any specific order.
The facts