China Town Development Company Ltd v Liverpool City Council

China Town Development Company Ltd v Liverpool City Council

There is a genuine dispute on substantial grounds as to whether the premium due under the Phase 1 Lease is £500,000 or £2.5 million, and whether the outstanding sums are due absent the grant of the Phase 2 Lease. The Company's arguments on construction and rectification are properly arguable. Therefore, insolvency proceedings are not appropriate for resolving these issues, and the Council should be restrained from presenting a winding-up petition based on the statutory demand.

Parties
Claimant: China Town Development Company Limited; Defendant: Liverpool City Council
Jurisdiction
England and Wales
Judgment Date
19 December 2017
Procedural Posture
Injunction Application (commercial/property) / Final Hearing of Application for Injunction to Restrain Presentation of Winding Up Petition
Outcome
Injunction granted restraining presentation of winding-up petition
Legal Topics
Injunctions, Winding Up Petitions, Contractual Construction, Rectification of Contracts
Commercial Law Property Law Insolvency Law Injunctions Winding Up Petitions Contractual Construction Rectification of Contracts

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Parties

China Town Development Company Limited

Claimant

Liverpool City Council

Defendant

Procedural Posture

Injunction Application (commercial/property) / Final Hearing of Application for Injunction to Restrain Presentation of Winding Up Petition

Legal Issues

  1. 1 Whether the debt claimed by Liverpool City Council is genuinely disputed on substantial grounds
  2. 2 Proper construction of the premium payment obligations under the Phase 1 Lease and Agreement for Lease (AFL)
  3. 3 Whether the Company is entitled to rectification of the Phase 1 Lease

Ratio Decidendi

There is a genuine dispute on substantial grounds as to whether the premium due under the Phase 1 Lease is £500,000 or £2.5 million, and whether the outstanding sums are due absent the grant of the Phase 2 Lease. The Company's arguments on construction and rectification are properly arguable. Therefore, insolvency proceedings are not appropriate for resolving these issues, and the Council should be restrained from presenting a winding-up petition based on the statutory demand.

Court Disposition

Injunction granted restraining presentation of winding-up petition

Orders

  • Liverpool City Council is restrained from presenting a winding-up petition in respect of the sums referred to in the statutory demand of 14 July 2017.
  • Parties to agree a form of order for approval by the court; failing agreement, rival versions may be submitted.