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Innovate Logistics Ltd (In Administration) v Sunberry Properties Ltd [electronic resource]

Language: English Publication details: 2008Subject(s): Online resources: Summary: [2008] EWCA Civ 1321, 18 November 2008. Case shows that the interests of creditors of an insolvent tenant may take precedence over those of a landlord. An appellant company (R) in administration, appealed against a prior decision giving R's landlord (S) permission to commence legal proceedings seeking an order to terminate an occupational license granted by R to another company (Y). Y had bought R's business from the administrators as a going concern and was the lessee of food storage premises for six months so that it could continue trading. The administrators passed on rent payments by Y to S. S argued that the license breached the lease and sought to evict the occupier. Held: appeal allowed. The Court of Appeal refused permission for the proposed eviction. It ruled that Y could continue to trade at the premises, allowing creditors to recover debts, as long as S continued to receive its rent. The Court considered that the administration benefitted S by securing rent. The original judge ought to have carried out the balancing exercise required by authority between the interests of S and those of the other creditors and considered if the application was equitable. Atlantic Computer Systems Plc, Re applied.
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Item type Current library Call number Copy number Status Barcode
Law report Virtual Online ONLINE PUBLICATION (Browse shelf(Opens below)) 1 Available 146677-2001

[2008] EWCA Civ 1321, 18 November 2008. Case shows that the interests of creditors of an insolvent tenant may take precedence over those of a landlord. An appellant company (R) in administration, appealed against a prior decision giving R's landlord (S) permission to commence legal proceedings seeking an order to terminate an occupational license granted by R to another company (Y). Y had bought R's business from the administrators as a going concern and was the lessee of food storage premises for six months so that it could continue trading. The administrators passed on rent payments by Y to S. S argued that the license breached the lease and sought to evict the occupier. Held: appeal allowed. The Court of Appeal refused permission for the proposed eviction. It ruled that Y could continue to trade at the premises, allowing creditors to recover debts, as long as S continued to receive its rent. The Court considered that the administration benefitted S by securing rent. The original judge ought to have carried out the balancing exercise required by authority between the interests of S and those of the other creditors and considered if the application was equitable. Atlantic Computer Systems Plc, Re applied.