Administration in UK Law

There seems to me no reason of policy why such obligations (which may or may not be in the interests of the administration) should be given priority over the company's other debts. As I have said, the purpose of administration under the 1986 Act was simply to impose a moratorium to allow time to find a way of saving the business or realising it to better advantage than in a liquidation.

That is an important point for present purposes because it demonstrates that, while Rule 2.67 may constitute a complete code as to what are strictly called expenses, there remains an avenue by which other items can be considered as if they were expenses (a distinction adverted to by Lord Hoffman in Toshouku).

In contrast, an administration is intended to be only an interim and temporary regime. There is to be a breathing-space while the company, under new management in the person of the administrator, seeks to achieve one or more of the purposes set out in section 8 (3).

(5) Thus it will normally be a sufficient ground for the grant of leave if significant loss would be caused to the lessor by a refusal. But if substantially greater loss would be caused to others by the grant of leave, or loss which is out of all proportion to the benefit which leave would confer on the lessor, that may outweigh the loss to the lessor caused by a refusal.

Whether the circumstances are present which entitle the administrators to have recourse to paragraph 83 (in the case of Ballast and Investments) and 84 (in the case of Management) is for the administrators. The evidence discloses that the creditors have been informed of the joint administrators' wish so to proceed; none has objected.

The position set out in paragraph 99 is not in my judgment affected by the general administration expenses provisions in the Insolvency Rules. The general provisions of Rule 2.67 of the Insolvency Rules should not be construed to override the lex specialis of paragraph 99 in Schedule B1 to the 1986 Act.

I do not consider that the statutory liabilities for redundancy payments or unfair dismissal claims would be "necessary disbursements" for the purposes of Rule 2.67(1)(f). It is not the ratio of that case that any liability imposed on a company which is not provable as a debt is thereby rendered a "necessary disbursement."