A tenant-friendly time (for now) - no winding up order for defaulting tenant
We now have further evidence of the court's willingness to act within the spirit of the Corporate Insolvency & Governance Bill ("CIG Bill").
Although some in the industry have expressed a fundamental concern over the courts relying on the wording of a bill which is not yet even law, this did not stop Mr Justice Morgan from quoting directly from it in the case of Re A Company (Injunction to Restrain Presentation of a Petition) [2020].
Mr Justice Morgan stated that the policy behind the CIG Bill is "self evident" but also referred to a "number of ministerial statements as to the Government's commitment to enact [the] legislation" stating that he felt a "high degree of confidence" that the sections of the CIG Bill relied upon would be enacted more or less in their current form.
The case before Mr Justice Morgan was an application for an injunction to prevent the presentation of a winding up petition for non-payment of rent. Mr Justice Morgan relied directly on the wording of Schedule 10 of the CIG Bill which provides for a restriction on the presentation of a winding up petition based on an unpaid statutory demand served between 1 March 2020 and 30 June 2020. The company was able to adduce to the court evidence that coronavirus had had a financial effect on the company (one of the provisions of the CIG Bill) and accordingly granted the injunction was granted.
This is not the first case before the court where tenants have sought to rely on the CIG Bill. A previous case (discussed here) resulted in a similar outcome.
It therefore seems that those trying to get a winding up petition into court ahead of the CIG Bill becoming law will be given short shrift by the court and this latest case provides a helpful precedent for tenants - but there remains a query as to whether the court is also setting an unintended precedent of allowing reliance on the provisions of a bill which has not yet even had its second reading and this is surely a risky precedent to set.
...no petition for the winding up of a registered company may be presented under section 124 of the 1986 Act on or after 27 April 2020 on the ground specified in section 123(1)(a) (i.e. non-compliance with a statutory demand) where the demand is served during the relevant period which begins on 1 March 2020 and ends on 30 June 2020 (or one month after the coming into force of schedule 10, whichever is later).
