A mining lease provided that the rent was payable half-yearly in arrears. Rent became payable after presentation of the winding-up petition and a winding-up order was made after the rent became payable. The lease was subject to a proviso for re-entry. The landlords sought leave to destrain submitting that: ‘the entire rent which became due after the winding-up ought to be paid by the liquidator.’ The liquidator submitted that: ‘for the rent due before winding-up, the lessor can only prove . . and that under the Apportionment Act 1870 the rent must be apportioned up to that time [and therefore the landlord could only] destrain for the proportion of the rent which became due after presentation of the petition for winding up.’
Held: Fry J did not engage with the apportionment issue but instead held: ‘the lessors have this power: if rent remained unpaid for 30 days after the usual date for payment, they had a right to enter and stop the working as well as to destrain and accordingly, on 6 December, they gave notice to the liquidator demanding either payment of the arrears of rent or the stoppage of the works when the liquidator, considering it desirable to carry on the enterprise of which this colliery forms part, neither stopped nor paid the rent but continued working. That is, in my view, an election by the liquidator to continue in possession of the property and, if he continued in possession of the property, could only do so upon the terms of the lease, and it was only equitable if he keeps the lease as an asset of the company and for the purposes of the liquidation that he should satisfy those conditions upon which the asset remains his. In other words, he should pay the rent in full.’
Judges:
Fry J
Citations:
(1881) 17 ChD 158
Jurisdiction:
England and Wales
Cited by:
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.
Landlord and Tenant, Insolvency
Updated: 16 May 2022; Ref: scu.605853
