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

Mr Michael Oldham was appointed by the court as administrator of Mr Jack Kyrris’ partnership. Kyrris had operated 13 Burger King restaurants, including two on Angel Row and Upper Parliament Street,

Nottingham Nottingham ( , locally ) is a city and unitary authority area in Nottinghamshire, East Midlands, England. It is located north-west of London, south-east of Sheffield and north-east of Birmingham. Nottingham has links to the legend of Robi ...

. Mr Mario Royle was an employee who sought a secured equitable charge, granted by Kyrris, for work he had done, but had not yet been paid. This amounted to £270,000. A summary judgment was given to Mr Oldham, and Mr Royle cross appealed that Mr Oldham was in breach of a duty of care, and there was sufficient proximity to him were he an unsecured creditor. He said the failure to ensure sums were paid to him was a breach of duty. Behrens J said the equitable charge point was good enough to go to trial, and gave summary judgment for Oldham on the duty of care point.

Judgment

Jonathan Parker LJ said that any equitable charge was a matter for trial and there was no sufficient proximity between administrators and unsecured creditors. The duty of an administrator is owed to the company, and no special duty was assumed. So under neither of the leading tort cases, '' Caparo v Dickman'' nor '' Henderson v Merrett'', would the position differ. This was analogous to the company law case on

directors' duties Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance. Directors' ...

, ''

Peskin v Anderson ''Peskin v Anderson'' 000EWCA Civ 326is a UK company law case concerning Directors' duties in the United Kingdom">directors' duties under English law. Facts Former members of the Royal Automobile Club (RAC) sued the directors for failing to di ...

001 001, O01, or OO1 may refer to: *1 (number), a number, a numeral *001, fictional British agent, see 00 Agent *001, former emergency telephone number for the Norwegian fire brigade (until 1986) *AM-RB 001, the code-name for the Aston Martin Valkyrie ...

BCC 874 where Mummery LJ said that fiduciary duties are owed exclusively by directors to the company, and not to shareholders individually. Outside duties can arise, but ‘are dependent on establishing a special factual relationship between the directors and the shareholders in the particular case.’ He also noted

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 212, allowing the court to compel an administrator to repay money as the court thinks just, or contribute sums to the company’s assets for misfeasance, or beach of fiduciary duty or other duty as the court thinks just. Dyson LJ and Thorpe LJ agreed.

Notes

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References

*L Sealy and S Worthington, ''Cases and Materials in Company Law'' (8th edn OUP 2007) 635 *R Goode, ''Principles of Corporate Insolvency Law'' (4th edn Sweet & Maxwell 2011) United Kingdom insolvency case law Court of Appeal (England and Wales) cases 2003 in United Kingdom case law

Facts

Judgment

See also

Notes

References