The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair dismissal, breach of contract and otherwise. The claims were issued anyway, and the administrators argued that they were a nullity, save for the claims for protective awards. The claimants argued that the claims had a real prospect of success, and to deny them would be inequitable.
Held: The claimants sought to have applied the wrong test. The claims were monetary claims. There has to be shown some exceptional reason to allow the actions. The claimants said that the fact that the claims would otherwise not be provable in the liquidation made them such, but this was rejected. The claims were contingent debts or debts. They did not require a judgment to be provable in the liquidation.
Norris J
[2010] EWHC 826 (Ch)
Bailii, Times
Insolvency Act 1986 Sch b1 p43(6), Employment Rights (Northern Ireland) Order 1996, Insolvency Rules 12.3(1)
England and Wales
Citing:
Cited – AES Barry Ltd v Txu Europe Energy Trading ChD 15-Jul-2004
Patten J considered whether to grant consent to a monetary action against the company now in administration, and said: ‘it will be in exceptional cases that the Court gives a creditor whose claim is simply a monetary one, a right by the taking of . .
Appeal From – Jones v Kernott ChD 10-Jul-2009
The couple were unmarried but had bought a property in joint names. Ms Jones had contributed the overwhelming share of the purchase price, and had paid all outgoings after Mr Kernott left several years ago. The County court judge had awarded J 90%, . .
Cited – AIB Capital Markets Plc and Another v Atlantic Computer Systems Plc and others; in re Atlantic Computers CA 25-Jul-1990
The court was asked how the administrators should deal with third parties seeking to exercise existing proprietary rights (including security rights) against the company in administration, and gave guidance. Nicholls LJ noted that in some cases . .
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Cited – Glenister v Rowe CA 21-Apr-1999
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which . .
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 . .
Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Cited – Krasner v McMath; in Re Huddersfield Fine Worsteds Limited CA 12-Aug-2005
The administrators had adopted the contracts of certain employees, who now claimed that the protective awards should have priority to the expenses of the administration.
Held: The payments did fall within paragraph 99(5) and do not have . .
Cited – Casson and Another v The Law Society Admn 20-Oct-2009
Two solicitors had been made bankrupt and then discharged from bankruptcy. They suffered adjudications by the SDT awarding compensation for matters occurring before the bankruptcies. They appealed, saying that the awards were bankruptcy debts from . .
Cited – Haine v Secretary of State for Business Enterprise and Regulatory Reform and Another; Day v Haine CA 11-Jun-2008
Former employees had obtained a protective award against the company for failing to consult on the impending redundancies and submitted proofs of debt to the liquidator who sought guidance from the court. The judge had held that since the Act . .
Cited – Steele, Regina (on the Application of) v Birmingham City Council and The Secretary of State for Work and Pensions CA 16-Dec-2005
The claimant had received an overpayment of benefits (Job seeker’s allowance), but then was made bankrupt. He now said that this was a debt in the bankruptcy.
Held: It was not. At the date of the bankruptcy order, the possible reclaim was not . .
Cited – Re Armstrong Whitworth 1947
Four workmen who had suffered pre-liquidation accidents but had made post-liquidation claims had, at the date of the winding up, ‘contingent claims’. . .
Cited – In re T and N Ltd and Others, Re Insolvency Act 1986 ChD 14-Dec-2005
The court considered the case of Glenister and similar and said: ‘I accept the submission that these cases are not in point to the issue as regards future asbestos claims. There is no element of discretion as regards such claims. If the ingredients . .
Cited by:
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Employment
Updated: 10 November 2021; Ref: scu.408582
