1969 (2) TMI 100 - HC - Companies Law

Summary

Issues Involved:
1. Claim for unpaid rent as part of the expenses of liquidation (Claim I).
2. Claim for unpaid rent accruing after the winding-up order (Claim II).
3. Claim for damages for breach of repairing covenants (Claim III).
4. Claim for damages for breach of covenant to yield up premises with full vacant possession (Claim IV).

Detailed Analysis:

Claim I: Unpaid Rent as Part of the Expenses of Liquidation
The applicants sought payment in full of two sums representing part of the quarter's rent payable in advance on Lady Day, 1962, after the presentation of the petition but before the winding-up order. The court noted that these sums, if not payable in full, are provable. The legal principle applied here is that rent accrued before the winding-up is generally provable but not payable in full unless special circumstances justify it. The court concluded that the sums representing rent antecedent to the time when the official receiver began to retain the lease for the benefit of the winding-up should not be allowed in full as part of the expenses of the liquidation.

Claim II: Unpaid Rent Accruing After the Winding-Up Order
The applicants sought payment in full of rent accruing after the winding-up order, arguing that the lease was retained for the convenience of the winding-up. The court examined whether the liquidator retained possession for the benefit of the estate, which would justify full payment. The court found that from the end of July until November 19, the lease was retained for the benefit of the liquidation, entitling the applicants to payment in full for that period. The necessary apportionment was to be made to determine the exact amount payable.

Claim III: Damages for Breach of Repairing Covenants
The applicants claimed damages for breach of the repairing covenants, quantified at lb31,000, which was agreed to be provable in the winding-up. The court considered whether these damages could be payable in full under section 323(4) of the Companies Act, 1948. The court held that the word "contract" in section 323(4) did not include a lease, and thus, the claim for dilapidations was not payable in full but only provable.

Claim IV: Damages for Breach of Covenant to Yield Up Premises with Full Vacant Possession
The applicants claimed for breach of the covenant to yield up the demised premises with full vacant possession, arguing that the surrender of the lease did not destroy this liability. The court examined the terms of the surrender and the legal implications. It was held that the surrender did not preserve liability for breaches arising only on or after the determination of the lease. The court referred to the case of Ex parte Sir W. Hart Dyke, In re Morrish, which concluded that neither party could claim benefits arising at the expiration or sooner determination of the lease after a statutory surrender. Therefore, the applicants' claim under clause 2(10)(b) of the lease failed.

Conclusion:
The court allowed Claim II for unpaid rent accruing after the winding-up order in full for the period from August 1 to November 19. Claims I, III, and IV were not allowed in full but were recognized as provable in the liquidation. The question of dilapidations was referred for trial by an official referee.