AIB Capital Markets Plc & Anor v Atlantic Computer Systems Plc & Ors [1990] EWCA Civ 20 (25 July 1990)

AIB Capital Markets Plc & Anor v Atlantic Computer Systems Plc & Ors [1990] EWCA Civ 20 (25 July 1990)

Administrators are not obliged to pay sums due under head leases as administration expenses automatically; entitlement to payment or leave to enforce proprietary rights depends on court discretion considering all circumstances. Charges assigned to AIB are fixed, not floating. 'Goods in the company's possession' includes goods sub-leased to end users for purposes of section 11(3)(c).

Citation
[1990] EWCA Civ 20
Parties
Company: Atlantic Computer Systems plc; Applicant: Atlantic Computer Services Group plc; Funder: Norwich Union Life Insurance Society; Funder: Allied Irish Banks plc; Administrator: J. F. Soden; Administrator: R. C. Boys-Stones
Jurisdiction
England and Wales
Judgment Date
25 July 1990
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed in part; administrators not obliged to pay head lease sums as administration expenses automatically.
Legal Topics
Administration Expenses, Priority of Payments, Fixed and Floating Charges, Moratorium on Enforcement, Interpretation of Possession Under Hire Purchase, Court Discretion in Administration
Insolvency Company Law Administration Expenses Priority of Payments Fixed and Floating Charges Moratorium on Enforcement Interpretation of Possession Under Hire Purchase Court Discretion in Administration

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Parties

Atlantic Computer Systems plc

Company

Atlantic Computer Services Group plc

Applicant

Norwich Union Life Insurance Society

Funder

Allied Irish Banks plc

Funder

J. F. Soden

Administrator

R. C. Boys-Stones

Administrator

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether administrators are obliged to pay sums due under head leases as administration expenses
  2. 2 Interpretation of 'goods in the company's possession' under section 11(3)(c) of Insolvency Act 1986
  3. 3 Classification of charges as fixed or floating

Ratio Decidendi

Administrators are not obliged to pay sums due under head leases as administration expenses automatically; entitlement to payment or leave to enforce proprietary rights depends on court discretion considering all circumstances. Charges assigned to AIB are fixed, not floating. 'Goods in the company's possession' includes goods sub-leased to end users for purposes of section 11(3)(c).

Court Disposition

Appeal allowed in part; administrators not obliged to pay head lease sums as administration expenses automatically.

Orders

  • Declarations that rentals and supplemental rentals under head leases are not payable as administration expenses as of right.
  • Administrators' appeal against payment order upheld.