Krasner v McMath

Krasner v McMath

Protective awards under section 189 of the Trade Union Labour Relations (Consolidation) Act 1992 and payments in lieu of notice (except those falling within the first Delaney category) are not payable in priority to expenses of the administration under paragraph 99(4)-(6) of Schedule B1 to the Insolvency Act 1986. Only payments in lieu of notice that are wages in the ordinary sense (first Delaney category) attract super-priority.

Parties
Appellant (administrator): Gerald Maurice Krasner; Respondent (employees' Representative): Barry McMath; Appellant (employees' Representative): Adrian Tipper; Respondent (joint Administrator): David Kenneth Duggins; Respondent (joint Administrator): Robert Hunter Kelly; Appellant (employees' Representative): Richard Harris; Respondent (joint Administrator): Martin Gilbert Ellis; Respondent (joint Administrator): Andrew Lawrence Hosking; Respondent (joint Administrator): Leslie Ross; Intervener: Her Majesty’s Attorney-General
Jurisdiction
England and Wales
Judgment Date
10 August 2005
Procedural Posture
Civil Appeal (insolvency/employment) / Court of Appeal Judgment
Outcome
Appeal allowed in part, dismissed in part
Legal Topics
Administrators' Liabilities, Super Priority of Employee Claims, Protective Awards, Payments in Lieu of Notice, Interpretation of Insolvency Act 1986 Schedule B1 Paragraph 99
Insolvency Law Employment Law Administrators' Liabilities Super Priority of Employee Claims Protective Awards Payments in Lieu of Notice Interpretation of Insolvency Act 1986 Schedule B1 Paragraph 99

Case Brief

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Parties

Gerald Maurice Krasner

Appellant (administrator)

Barry McMath

Respondent (employees' Representative)

Adrian Tipper

Appellant (employees' Representative)

David Kenneth Duggins

Respondent (joint Administrator)

Robert Hunter Kelly

Respondent (joint Administrator)

Richard Harris

Appellant (employees' Representative)

Martin Gilbert Ellis

Respondent (joint Administrator)

Andrew Lawrence Hosking

Respondent (joint Administrator)

Leslie Ross

Respondent (joint Administrator)

Her Majesty’s Attorney-General

Intervener

Procedural Posture

Civil Appeal (insolvency/employment) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether protective awards under section 189 of the Trade Union Labour Relations (Consolidation) Act 1992 and payments in lieu of notice are payable in priority to expenses of administration under paragraph 99(4)-(6) of Schedule B1 to the Insolvency Act 1986

Ratio Decidendi

Protective awards under section 189 of the Trade Union Labour Relations (Consolidation) Act 1992 and payments in lieu of notice (except those falling within the first Delaney category) are not payable in priority to expenses of the administration under paragraph 99(4)-(6) of Schedule B1 to the Insolvency Act 1986. Only payments in lieu of notice that are wages in the ordinary sense (first Delaney category) attract super-priority.

Court Disposition

Appeal allowed in part, dismissed in part

Orders

  • Appeal against Peter Smith J's decision in Huddersfield's case allowed;
  • Appeals against Etherton J's decision in Ferrotech and Granville's cases dismissed, except that payments in lieu of notice falling within the first Delaney category are entitled to priority.