Blair Carnegie Nimmo, Ca, Administrator Of Dawson International Public Limited Company For Directions Pursuant To Paragraph 63 Of Schedule B1 Of The Insolvency Act 1986
| Jurisdiction | Scotland |
| Judge | Lord Clark |
| Neutral Citation | [2018] CSOH 52 |
| Date | 30 May 2018 |
| Docket Number | P1007/17 & P1008/18 |
| Court | Court of Session |
| Published date | 30 May 2018 |
OUTER HOUSE, COURT OF SESSION
[2018] CSOH 52
P1007/17 & P1008/18
OPINION OF LORD CLARK
in the cause
BLAIR CARNEGIE NIMMO, CA, administrator of DAWSON INTERNATIONAL PUBLIC
LIMITED COMPANY, a limited liability company incorporated under the Companies Acts
and having its registered office at Saltire Court, 20, Castle Terrace, Edinburgh
Noter
for Directions pursuant to paragraph 63 of Schedule B1 of the Insolvency Act 1986
Noter: Howie QC; Shepherd & Wedderburn LLP
First Respondent: Thomson QC, Roxburgh; Office of the Advocate Gen eral
Second Respondent: Dodd; Lay Representative
Third Respondent: Delibegovic-Broome QC; Burness Paull LLP
30 May 2018
Introduction
[1] This is an application for directions by the noter, as the administrator of Dawson
International PLC (“the Company”). He was originally appointed as joint administrator by
the directors of the Company on 15 August 2012, along with another insolvency practitioner
who later resigned. The respondents to the Note are the Environment Agency (“the first
respondent”), Tweedside Independent Traders Ltd (“the second respondent”), and the
Pension Protection Fund (“the third respondent”).
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[2] The noter is also the administrator of Dawson International Trading Limited
(“DITL”). In that capacity, a Note seeking directions in essentially identical terms to the
Note presented in respect of the Company was lodged by the noter in respect of DITL. The
same respondents appeared in respect of that Note and submissions on the two Notes were
heard together. It was agreed that the decisions reached in this Opinion, viewed as the lead
case, apply in respect of both Notes.
[3] By interlocutor dated 20 December 2017, parties were allowed a debate on the issues
of (i) whether the orders sought in the Note are a proper subject for directions by the court;
and (ii) whether the first respondent can or could have a claim as a creditor of the Company.
These matters are the subjects of the first plea-in-law for the first respondent, the first and
second pleas-in-law for the second respondent, and the first and second pleas-in-law for the
third respondent.
The parties’ averments
The noter
[4] The basis for the application for directions was set out in the Note. By way of
background, in the period between 1980 and 2000, the Company was the ultimate parent
company in a group of companies. One of its subsidiaries was Dawson International
(Holdings) Ltd, which owned the whole share capital of Pringle of Scotland Ltd (which later
changed its name to Dawson (POS) Ltd, but is referred to here as “Pringle”). Pringle was a
trading company, manufacturing knitwear products in mills at Hawick and elsewhere. It
owned a factory situated within the Tweedside Trading Estate at Tweedmouth in
Berwick-upon-Tweed (“the site”). In the course of its manufacturing activities at the site,
Pringle made use of a solvent commonly used in connection with the dry cleaning of clothes,
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tetrachloroethylene, in order to remove grease from wool being used in the factory. Over
the years, a number of spillages of that substance occurred, and those resulted in
tetrachloroethylene penetrating the ground at the site and thereafter migrating into the
groundwater contained within the fell sandstone aquifer under Berwick-upon-Tweed, from
which neighbouring landowners abstracted water in connection with their businesses.
[5] In 1992, Pringle was prosecuted in the Berwick-upon-Tweed magistrates court over a
tetrachloroethylene spillage at the site and was convicted of an offence under section 85 of
the Water Resources Act 1991. Following that conviction, Pringle took steps to combat the
pollution of the groundwater (and, potentially, the River Tweed). In particular, it installed
on the site, and thereafter operated, pumping equipment designed to ease the treatment and
decontamination of the groundwater under the site which was flowing into the aquifer. A
neighbouring landowner also instituted measures to seek to ensure the decontamination of
the water abstracted by it from the aquifer. In May 1993, Pringle entered into agreements
with the neighbouring landowner whereby it agreed to indemnify that landowner against
such cost as the latter might incur in carrying out that decontamination work.
[6] Pringle entered into a Business Transfer Agreement on 16 December 1997 in terms of
which the whole undertaking, property and assets of Pringle relating to the business then
carried on by that company (“the Business”) were sold to DITL, another subsidiary of
Dawson International (Holdings) Ltd, with effect from the close of business on 3 January
1998. That sale included the heritable property relating to the Business. The whole liabilities
of the Business were assumed by DITL and DITL undertook to indemnify Pringle against all
liability of the Business irrespective of whether those liabilities were present, future,
contingent or disputed. The works at the site were closed by Pringle in the latter part of the
1990s, though the precise date of the closure was said to be uncertain. The noter also
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