The company had been in the business of leasing computers. In administration, the administrators wanted to continue collection of the rents. The court was asked how the company’s liabilities to head lessors and hirers should be dealt with. Some of the relevant payments were payable in advance and some in arrear. The administrators argued that all payments should be apportioned, relying on Shackell and Co v Chorlton and Sons, Re ABC Coupler and Engineering Co Ltd (No. 3) and Re H H Realisations Ltd. The head lessors argued that payments in advance were not apportionable, by reference to Ellis v Rowbotham. Ferris J held that the payments should be apportioned. He said: ‘That was, however, a case where the tenant was seeking to use apportionment to limit his liability for the consequences of his own default. Moreover, and perhaps more significantly, it was not a case which involved a supervening liquidation, receivership or administration. In my judgment the decision does not apply to the present circumstances and I ought to apply the decisions relied on by [the administrators].
I shall therefore direct that any liability owed to Norwich Union or Allied Irish in respect of periodical payments which are to be discharged as administration expenses, is to be treated as accruing on a day to day basis. I do not propose to make any direction which purports to govern the cases of payments due to other funders, but what I have said in relation to Norwich Union and Allied Irish will presumably act as a guide.’
Judges:
Ferris J
Citations:
[1990] BCC 454
Jurisdiction:
England and Wales
Citing:
Cited – Shackell v Chorlton 1895
. .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 16 May 2022; Ref: scu.605854
