Innovate Logistics Ltd v Sunberry Properties Ltd

The Court of Appeal allowed the appeal and made ancillary directions concerning payments during an administration. The administrators were directed to pay a licence fee equal to one month’s passing rent, together with interest earned on that fee, until possession was delivered or 10 October 2008. The court refused full contractual rent and contractual-rate interest, and considered permission to commence proceedings premature. The supplied extract contains no reasoned judgments and therefore states no broader legal rule.

Innovate Logistics Ltd v Sunberry Properties Ltd was an appeal from the High Court of Justice, Chancery Division, before HHJ Simon Brown QC sitting as an additional judge. Innovate Logistics Limited was in administration. Sunberry sought payment of rent-related sums, interest, and permission under paragraph 43(6) of Schedule B1 to commence proceedings against the Company. The Court of Appeal had announced that the appeal would be allowed and then determined the ancillary payment and permission issues.

The court allowed the appeal. Lord Justice Mummery recorded the court’s decision and operative directions. Lord Justice Wall and Lord Justice Stanley Burnton agreed.

1. For the period ending on 10 October 2008, or the earlier date on which YHL delivered up possession to the administrators, the administrators were directed to pay Sunberry the monthly licence fee which YHL was required to pay to the Company. That fee was equal to one month’s passing rent under the Lease. The administrators were also directed to pay any interest earned by the Company on the licence fee.
2. The court decided that it was premature to grant Sunberry permission under paragraph 43(6) of Schedule B1 to commence the proposed proceedings against the Company on or after 11 October 2008.
3. Sunberry was given liberty to apply to lift the stay on proceedings if any payment due from the administrators was not made as directed.
4. The court declined to order payment of the full contractual rent under the Lease, apportioned from the beginning of the administration to 11 October 2008. It also declined to order interest on overdue sums at the contractual rate.

The supplied extract records the disposition and orders but not the promised reasons. No wider ratio can therefore be identified from the text provided.

• Court of Appeal (Civil Division): The appeal was allowed. The court made directions concerning licence-fee payments, interest, permission to commence proceedings, and the stay. The decision is reported at [2008] EWCA Civ 1630.
• High Court of Justice, Chancery Division: The appeal arose from a decision of HHJ Simon Brown QC sitting as an additional judge. No citation for the decision under appeal is stated in the judgment.