Day v Haine & Anor [2007] EWHC 2691 (Ch) (19 October 2007)

Day v Haine & Anor [2007] EWHC 2691 (Ch) (19 October 2007)

Protective awards made by an Employment Tribunal after the commencement of liquidation are not provable debts in the liquidation because, at the date of liquidation, the employees had no enforceable right or contingent claim against the company; the awards depended on the tribunal's subsequent discretionary...

Source-derived case information.

Citation
[2007] EWHC 2691 (Ch)
Parties
Applicant: Robert Day (The Liquidator of Compound Sections Limited); 1st Respondent: Ronald Benjamin Haine (As a representative of the former employees of Compound Sections Limited entitled to the benefit of Protective Awards made by the Employment Tribunals on 31st August 2006); 2nd Respondent: The Secretary of State for Business Enterprise and Regulatory Reform
Jurisdiction
England and Wales
Judgment Date
19 October 2007
Procedural Posture
Application for Directions in Company Liquidation / First Instance Judgment in High Court (chancery Division, Companies Court)
Outcome
Application granted; declaration made that protective awards are not provable debts or expenses in the liquidation; permission to appeal granted.
Legal Topics
Provability of Debts in Liquidation, Protective Awards, Employee Rights on Insolvency, Priority of Claims, Interpretation of Insolvency Rules
Insolvency Employment Provability of Debts in Liquidation Protective Awards Employee Rights on Insolvency Priority of Claims Interpretation of Insolvency Rules

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Parties

Robert Day (The Liquidator of Compound Sections Limited)

Applicant

Ronald Benjamin Haine (As a representative of the former employees of Compound Sections Limited entitled to the benefit of Protective Awards made by the Employment Tribunals on 31st August 2006)

1st Respondent

The Secretary of State for Business Enterprise and Regulatory Reform

2nd Respondent

Procedural Posture

Application for Directions in Company Liquidation / First Instance Judgment in High Court (chancery Division, Companies Court)

Legal Issues

  1. 1 Are protective awards made by an Employment Tribunal after the commencement of liquidation provable debts in the liquidation?
  2. 2 Do such awards constitute expenses of the liquidation?
  3. 3 Does the company's breach of statutory consultation obligations create a provable liability?

Ratio Decidendi

Protective awards made by an Employment Tribunal after the commencement of liquidation are not provable debts in the liquidation because, at the date of liquidation, the employees had no enforceable right or contingent claim against the company; the awards depended on the tribunal's subsequent discretionary decision. Such awards are also not expenses of the liquidation.

Court Disposition

Application granted; declaration made that protective awards are not provable debts or expenses in the liquidation; permission to appeal granted.

Orders

  • Declaration that protective awards are not provable debts in the liquidation and not expenses of the liquidation.
  • No order for costs save that the liquidator's costs are to be an expense in the liquidation.