''Powdrill v Watson''

995 Year 995 (Roman numerals, CMXCV) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar. Events By place Japan * 17 May - Fujiwara no Michitaka (imperial regent) dies. * 3 June: Fujiwara no ...

2 AC 394 is a

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...

case concerning the administration procedure when a company is unable to repay its debts.

Facts

Roger Powdrill was a joint administrator of Paramount Airways Ltd, a short haul aircraft carrier. He wrote to all the employees in the company, including John Watson, saying that the company would keep on paying the employees but was not in any way assuming personal liability. This case was joined with cases where administrative receivers had done the same though making explicit they were not adopting the employee's contracts of employment. This included John Talbot who was in charge of both

Leyland DAF Ltd Leyland DAF was a commercial vehicle manufacturing company based in Leyland, United Kingdom, and a subsidiary of DAF NV. In February 1993, Leyland DAF was placed into receivership. History Leyland DAF was formed in February 1987, when the ...

and Ferranti International plc. Mr Watson’s contract was then terminated. He wanted to be paid for his work. He argued that he stood in priority under

Insolvency Act 1986 The Insolvency Act 1986c 45 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. History The Insolvency Act 1986 followed the publication and ...

section 19(5) (see now Insolvency Act 1986, Schedule B1) for wages over a two months’ notice period. In Talbot's case, he simply issued applications asking whether they had in fact adopted the contracts under the Insolvency Act 1986, section 44. Evans-Lombe J in the High Court

993 Year 993 ( CMXCIII) was a common year starting on Sunday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – The 12-year-old King Otto III gives the Sword of Saints Cosmas and Damian ...

BCC 662 held the contracts were adopted.

Dillon LJ Sir George Brian Hugh Dillon (2 October 1925 – 22 June 2003) was a British lawyer and judge who served as a Lord Justice of Appeal from 1982 to 1994. Biography Dillon was born in a naval family, the son of Captain George Crozier Dillon, RN, ...

Leggatt LJ Sir Andrew Peter Leggatt, PC (8 November 1930 – 21 February 2020) was a British judge who served as the Lord Justice of Appeal and as a member of the Privy Council. He was noted for his acerbic wit and precise, well-written judgements. As ...

and

Henry LJ Sir Denis Robert Maurice Henry, PC (19 April 1931 – 6 March 2010) was an English barrister, Queen's Counsel and judge, rising to Lord Justice of Appeal. He presided over the Guinness share-trading fraud trial, a major British business scandal ...

in the

Court of Appeal A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...

(reported at

994 Year 994 ( CMXCIV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * September 15 – Battle of the Orontes: Fatimid forces, under Turkish gener ...

BCC 172) dismissed the appeals.

Judgment

Lord Browne-Wilkinson Nicolas Christopher Henry Browne-Wilkinson, Baron Browne-Wilkinson, PC (30 March 1930 – 25 July 2018) was a British judge who served as a Lord of Appeal in Ordinary from 1991 to 2000, and Senior Lord of Appeal in Ordinary from 1998 to 2000. ...

held that

IA 1986 The Insolvency Act 1986c 45 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. History The Insolvency Act 1986 followed the publication and ...

sections 19 and 44 meant that a contract was adopted where the administrator or receiver’s conduct amounted to an election to treat the contract as adopted. It was inevitably so after 14 days following appointment and could not be unilaterally avoided. Under section 19 priority was only given to liability on wages incurred by the administrator during his tenure in office, and that did include liability for the period of notice, but not

holiday pay In some jurisdictions, holiday pay is an allowance which an employee earns through work in the calendar year prior to the year of the holiday. It is usually a percentage supplement to the salary that has been paid the year before the holiday pay is ...

accruing before appointment.

Lord Keith Baron Keith was a title that was created three times in British history, with all three creations in favour of the same person, Admiral the Honourable Sir George Keith Elphinstone. He was the fifth son of Charles Elphinstone, 10th Lord Elphinsto ...

Lord Mustill Michael John Mustill, Baron Mustill, PC, FBA (10 May 1931 – 24 April 2015) was an English barrister and judge. He was a Lord of Appeal in Ordinary from 1992 to 1997. Life and career The son of Clement William and Marion Mustill, he was ed ...

and

Lord Lloyd Anthony John Leslie Lloyd, Baron Lloyd of Berwick, (called Tony; born 9 May 1929) is a retired British judge, and a former member of the House of Lords. Early life and education Lloyd was born on 9 May 1929, the son of Edward John Boydell Llo ...

concurred.

Notes

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References

*L Sealy and S Worthington, ''Cases and Materials in Company Law'' (9th edn OUP 2010) *

R Goode Sir Royston Miles "Roy" Goode (born 6 April 1933) is an academic commercial lawyer in the United Kingdom. He founded the Centre for Commercial Law Studies at Queen Mary, University of London. He was awarded the Order of the British Empire, OBE ...

, ''Principles of Corporate Insolvency Law'' (4th edn Sweet & Maxwell 2011) United Kingdom insolvency case law House of Lords cases 1995 in British law 1995 in case law

Facts

Judgment

See also

Notes

References