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 court is not asked for a declaration that those circumstances are present.

In these circumstances, waiver or correction does not arise. The Court has no jurisdiction to correct any errors, since relief can only be granted once insolvency proceedings have begun. If the appointment is invalid, there are no insolvency proceedings.

That provision does not, as the Administrators at one point seemed to contend, permit an administrator to perform any of his functions so long as doing so does not conflict with the statutory purpose of the administration. If it had been Parliament's intention to so provide, it could easily have done so. Rather, the statute is clear that any performance of an administrator's function must be performed for, and only for, the administration's purpose.