• Hurstwood Properties (A) Ltd and Ors v Rossendale BC and Anor [2021] UKSC 16

    This case has implications in matters where the parties attempt to avoid liability for business rates by using corporate vehicles Play The main question posed in this case was whether certain development companies bore any liability to pay non-domestic rates to the council on empty properties that had been leased by those development companies to special purpose vehicle companies (SPV) solely for the purpose of the development companies avoiding the rates liability for which they would otherwise have been liable.    The SPVs argued that there was no such liability, and that they were entitled to the unpaid business rates. They stated that this was because, alternatively:   The lease to an SPV which did not occupy the property did not meet the requirements to make the council the 'owner' of the empty property for rating purposes (the "Statutory Ground"); or   The SPV should be ignored because its purpose was to avoid business rates, which the defendants would otherwise have had to pay. This was claimed to amount to an abuse of the SPVs' separate personality that warranted the piercing of the corporate veil (the "Piercing the Corporate Veil Ground").    In respect of the Piercing the Corporate Veil ground, as is widely understood, to pierce the corporate veil is to disregard the separate legal personality of a company. This means to disregard the doctrine that a company is treated in law as a person in its own right, which is capable of owning property and having its own rights and liabilities distinct from the rights and liabilities of its shareholders. This ground did not find favour with the Supreme Court and was dismissed.   In response to the Statutory Ground, it was important to know who the "owner" of the relevant property was, as only the owner could qualify for rating relief, and only if it could show that it fell within the relevant exemption to liability for the business rates claimed. The relevant exemption was found within some Regulations to the Local Government and Finance Act 1988. These Regulations listed the classes of non-domestic hereditaments (or properties) which, exceptionally, don't give rise to a liability to pay rates when unoccupied. The relevant Regulation stated that these classes include a hereditament "whose owner is a company which is subject to a winding-up order made under the Insolvency Act 1986 or which is being wound up voluntarily under that Act."   In this case, the Supreme Court allowed the appeal by the Local Authorities against the striking-out of their claims to unpaid business rates from the defendant landlords on the basis that the legislation dealing with the payment of business rates for unoccupied properties should be interpreted in the context of the intention behind it, which, it held, was in line with the intention going as far back as the Poor Relief Act 1601, which aimed to deter owners from leaving properties unoccupied for personal financial advantage. It also ultimately held that a court will consider the liability of defendant landlords for business rates at a later stage at trial.  

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    Bramston (Appellant) v Haut (Respondent) [2012] EWCA Civ 1637

    A very unusual case, in which the Court of Appeal overturns a High Court decision which allowed a bankrupt to apply to suspend his own bankruptcy. Play The bankrupt wished to apply to suspend his own discharge from bankruptcy urgently, as the anniversary of his Bankruptcy Order was only days away. He wanted to propose an IVA whilst he was still undischarged, which would enable him to seek an annulment of his bankruptcy from the court under s.261 Insolvency Act 1986. The Court of Appeal considered whether the High Court was correct in its finding that a bankrupt had standing to apply for the suspension of his own discharge from bankruptcy. It held that only a trustee in bankruptcy or an official receiver can apply, save in exceptional circumstances, and that this case was not exceptional. A Trustee in Bankruptcy has no duty to comply with a bankrupt's request to co-operate when proposing an IVA. However, a bankrupt may ask the court to apply its discretion for an order directing the trustee to make an application (s.303(1) IA86), and here the Court of Appeal held that the High Court should have directed the trustee to apply to suspend the bankrupt's discharge from bankruptcy before it made an order suspending his discharge from bankruptcy.

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    Darty Holdings SAS v Carton-Kelly (as additional liquidator of CGL Realisations Ltd) [2023] EWCA Civ 1135

    When considering whether a transaction is challengeable as a preference it is important to analyse when the decision by the insolvent company was made. This analysis will be critical in determining whether the insolvent company had the required desire to prefer the creditor in question. Play This case is helpful in confirming that it is only the point of an operative decision to repay that is relevant for these purposes; an agreement or understanding to do so, or a decision which was conditional on board approval (or ratification) was not sufficient; nor was an inference that repayment was, essentially, inevitable. The fact that a creditor puts pressure on a debtor to repay a debt does not mean that the debtor has decided to repay it. Even if the new board had little choice but to accept the terms on offer at the completion board meeting on 3 February 2012, it does not follow that Comet had already made a decision in November 2011, when the Sale and Purchase Agreement was signed. The judgment is also a rare example of the Court of Appeal overturning a finding of a fact by a trial judge.

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    Data Power Systems Limited and Or v Safehosts (London) Limited and Anor [2013] EWHC 2479 (Ch)

    In this case the High Court refused an application for an administration order and instead appointed a provisional liquidator. There was no substantive evidence that one of the statutory purposes of administration could be achieved. Play This case made it clear that where it is merely asserted that one of the statutory purposes of administration is achievable, that will not be sufficient evidence that one of those purposes is indeed achievable, even if the assertion is made by a qualified insolvency practitioner. There was no application before the court for the appointment of a provisional liquidator, yet the court treated the administration application as a winding up petition, despite the fact that no application had been made for it to do so. It was able to do so due to its power to make such order as it thought fit under section 125 Insolvency Act 1986. Its power to do so came from the effect of paragraph 13 (1)(e) of Schedule B1 to the Insolvency Act 1986, which states that "On hearing an administration application, the court may treat the application as a winding up petition and make any order which the court could make under section 125.