The landlord of Lundy Island, which was let to a third party, distrained upon goods of the company which had been left upon the tenant’s property. The distraint was for rent which had fallen due more than a year after the winding up order. The tenant had agreed to assign the lease to the company but had not actually done so. He had however allowed the company into possession and the company had brought its goods upon the land. After the winding up order the liquidator retained possession with a view to a sale of the company’s assets on the land.
Held: The distress was allowed. It was not in respect of a claim for rent against the company, for which the landlord could have proved in the liquidation. The company was not his tenant. The landlord was exercising his ancient right to distrain upon any goods on the land, whether they belonged to his tenant or not. It should not make a difference that the third party to whom the goods belonged happened to be a company in liquidation. Second, even if the rent had been owing by the company, the liquidator had retained possession of the land for the purposes of the liquidation. ‘ . . if the company for its own purposes, and with a view to the realisation of the property to better advantage, remains in possession of the estate, which the lessor is therefore not able to obtain possession of, common sense and ordinary justice require the court to see that the landlord receives the full value of the property.’
James LJ said: ‘if the Company for its own purposes, and with a view to the realisation of the property to better advantage, remains in possession of the estate, which the lessor is therefore not able to obtain possession of, common sense and ordinary justice require the court to see that the landlord receives the full value of the property.’
Sir William James LJ
(1871) LR 6 Ch App 462
England and Wales
Citing:
Followed – In re Progress Assurance Co Ex parte Liverpool Exchange Co CA 1870
Where offices had been let to a company which was ordered to be wound up by the Court, a distress was subsequently put in for rent by the lessors, under which the office furniture was seized.
Held: as possession of the offices had not, in the . .
Cited by:
Cited – Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .
Applied – In re Watson, Kipling and Co ChD 1883
An assessment for rates had been made after the liquidation of the company upon property occupied by the company. The court rejected the submission of counsel for the rating authority that: ‘where a liability is incurred during the winding-up, that . .
Cited – In re Atlantic Computer Systems Plc CA 1992
The chargor was a company which arranged with the chargee, a funding bank, that it should purchase equipment and let it on hire purchase to the chargor with permission to sub-lease to end users. The chargor charged to the chargee by way of security . .
Cited – In Re Kentish Homes Ltd ChD 31-Mar-1993
The question was whether a post-liquidation liability to community charge on empty flats was an expense of the liquidation.
Held: The company was the chargeable person in respect of the flats for the relevant periods, but the liability was . .
Cited – Wright and Another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd ChD 6-Mar-2018
IVA is a special form of contract
Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 18 December 2021; Ref: scu.190095
