SMITH v. Bridgend County Borough Council [2000] EWCA Civ 1 (19 January 2000)

SMITH v. Bridgend County Borough Council [2000] EWCA Civ 1 (19 January 2000)

The administrator cannot maintain a claim in conversion against the council because his right to the plant arose only by virtue of the voiding of the unregistered floating charge, which conferred a procedural right to recover the plant in specie if it remained in the council's possession, but not a right to damages for conversion once the plant had been transferred to a third party. The administrator never had a right to immediate possession as against the council, and the true accounting position between the company and the council would always have included the council's claim for damages for breach of contract. There is no legislative or equitable basis to stretch the administrator's...

Citation
[2000] EWCA Civ 1
Parties
Claimant/respondent: Cosslett (Contractors) Limited (Administrator: Mr Gerald Clifford Smith, formerly Mr Ian Clark); Defendant/appellant: Borough Council (Appellants)
Jurisdiction
England and Wales
Judgment Date
19 January 2000
Procedural Posture
Civil Appeal / Appeal From Summary Judgment and Interim Payment Order; Court of Appeal Decision
Outcome
Appeal allowed; action struck out.
Legal Topics
Administrator's Powers, Conversion, Floating Charge Registration, Set Off in Insolvency, Summary Judgment, Equitable Proprietary Interests
Insolvency Law Contract Law Tort Law Administrator's Powers Conversion Floating Charge Registration Set Off in Insolvency Summary Judgment +1 more

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Parties

Cosslett (Contractors) Limited (Administrator: Mr Gerald Clifford Smith, formerly Mr Ian Clark)

Claimant/respondent

Borough Council (Appellants)

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From Summary Judgment and Interim Payment Order; Court of Appeal Decision

Legal Issues

  1. 1 Whether an administrator can maintain a claim in conversion against a party no longer in possession of company property where the administrator's right arises only by virtue of the voiding of an unregistered floating charge under s.395 Companies Act 1985.
  2. 2 Whether the administrator's powers under the Insolvency Act 1986 and Schedule I permit such a claim for damages for conversion.
  3. 3 Whether the defendant council's actions amounted to conversion or reversionary injury.

Ratio Decidendi

The administrator cannot maintain a claim in conversion against the council because his right to the plant arose only by virtue of the voiding of the unregistered floating charge, which conferred a procedural right to recover the plant in specie if it remained in the council's possession, but not a right to damages for conversion once the plant had been transferred to a third party. The administrator never had a right to immediate possession as against the council, and the true accounting position between the company and the council would always have included the council's claim for damages for breach of contract. There is no legislative or equitable basis to stretch the administrator's...

Court Disposition

Appeal allowed; action struck out.

Orders

  • Appeal allowed with costs here and below.
  • Action struck out.