Laverty & Ors v British Gas Trading Ltd
2014
CHANCERY DIVISION
United Kingdom
CORAM
- THE CHANCELLOR OF THE HIGH COURT
Areas of Law
- Civil Procedure
- Commercial Law
- Contract Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
The joint liquidators of PGL Realisations plc and associated companies sought a determination on the priority of charges for gas and electricity supplied by BGT after the companies went into administration and vacated certain stores. The court held that the charges under the deemed contracts are provable as unsecured debts within rule 13.12(1)(b) of the Insolvency Rules 1986 rather than as an administration expense. The decision was based on the interpretation of insolvency rules and the nature of deemed contracts under the Gas and Electricity Acts.
Judgment
The Chancellor (Sir Terence Etherton) :
This judgment follows the trial of a preliminary issue ordered by Mr Justice Henderson on 21 March 2014 on the application of the joint liquidators of PGL Realisations plc (“PGL”), PStores Realisations Limited and Dorsman Estates Limited (together “the Companies”).
On 19 January 2012 administrators were appointed in respect of the Companies (“the Administrators”). They were the same administrators for each of the Companies. On 19 July 2013 an order was made for the compulsory liquidation of the Companies. Some of the Administrators were appointed joint liquidators of each of the Companies (“the Liquidators”).
The preliminary issue concerns the priority to be given to the payment of certain charges owed to the respondent, British Gas Trading Limited (“BGT”), for gas and electricity supplied to retail premises after the Companies entered into administration and after they had been vacated by the Companies, that is to say whether those charges rank as expenses of the administration within rule 2.67(1)(f) of the Insolvency Rules 1986 (“the Rules”) or are provable debts within rule 12.3(1) and rule 13(12)(1)(b) of the Rules.
Factual background
For the purposes of deciding the preliminary issue, the factual background can be stated very shortly.
Before they became insolvent the Companies owned and operated the Peacocks chain of clothing stores in England, Wales and Scotland (“the Stores”). For the purpose of the trial of the preliminary issue it is common ground that one or other of the Companies owned or occupied each of the Stores.
BGT has been at all relevant times a gas supplier and an electricity supplier licensed by the Gas and Electricity Markets Authority. Prior to the administration of the Companies BGT supplied gas and electricity to the Stores under written contracts made with PGL, then known as Peacock Group plc. There were contracts for the supply of gas and contracts for the supply of electricity. Each contract governed a number of different Stores. The contracts were for a fixed term from 1 April 2011 to 31 March 2012 (“the 2011–2012 Contracts”). Each of the 2011-2012 Contracts stated a maximum and a minimum annual consumption and the price. In the case of the electricity contracts the price included a standing charge and a unit charge. The standing charge included amounts intended to cover charges payable by BGT itself to third parties. They are described in the witness statement of Nina Mo