Briant Colour Printing Company Ltd Re
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BUCKLEY,LORD JUSTICE SCARMAN |
| Judgment Date | 22 March 1977 |
| Judgment citation (vLex) | [1977] EWCA Civ J0322-3 |
| Docket Number | 1975 No, 002277 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 March 1977 |
[1977] EWCA Civ J0322-3
In The Supreme Court of Judicature
Court of Appeal
Chancery Division Companies Court
(Mr. Justice Stade)
Lord Justice Buckley
Lord Justice Scarman and
Sir John Pennycuick
In the Matter of Briant Colour Printing Company Limited and in the Matter of the Companies Act, 1948
MR. W. J. GLOVER Q.C. and VISCOUNT COLVILLE (instructed by Mr J. B.Parker, Deputy Town Cleric & Solicitor, London Borough of Southwark) appeared on behalf of the Applicants (Appellants).
MR. D. J. NICHOLLS Q.C. and MR.W.A. BLACKBURNE (instructed by Messrs Wm. Prior & Co; Solicitors, London) appeared on behalf of the Respondents (Respondents).
This is an appeal from the dismissal by Mr Justice Slade of an originating summons by which the present appellants sought a declaration that a sum of £14,703.28, representing General Rates of the London Borough of Southwark on certain factory premises of the respondent company in the Old Kent Road for the period from 21st June, 1972 to 14th June 1973, is an expense properly incurred by the Liquidator of the company in the course of the winding up of the company, and that the sum in question is properly payable out of the assets of the company in priority to the claims of creditors of the company in the winding up. The learned judge held that the company was not rate able in respect of the factory, as I shall call it, during the period referred to, and the Rating Authority appeals from his decision,
The company carried on a printers' business in the factory, on 21st June 1972 a resolution was passed for the voluntary winding-up of the company, and Mr. Patrick Granville White was appointed Liquidator. He thereupon, on that day, gave notice to all the employees of the company determining their employment, and the employees upon the same day entered into occupation of the factory adversely to the company and its Liquidator, and so remained until 14th June 1973 when the factory was sold, the sale being completed on that date,
The Liquidator, in his first affidavit filed on behalf of the company, deposes to the fact that on 21st June 1972 the former employees seized physical control of the premises and the plant and machinery there, and thereafter maintained control there over by means of a 24-hour shift system, calling themselves the "Briant Co lour Printing Joint Chapels Work-In'. The Work-in was organised and directed by a committee calling itself the "Joint Chapels Work-in Committee" to which I shall refer as "the committee",and that, according to the Liquidator's affidavit, was a committee elected by the ex-employees of the company. As I understand it, the membership in fact consisted of the "fathers and mothers" so-called, of the Chapels of the Unions connected with those who worked in the factory. The Liquidator goes on in his affidavit to say that the committee denied his authority as Liquidator and claimed that the factory was under workers control, and that during the relevant period the work-in occupants of the premises, that is to say the former employees of the company, who were occupying and working in the factory, undertook contracts and printing on their own account and defrayed the resulting costs out of their own resources. None of these activities, he says, was in any way undertaken with his permission or with his Connivance.
At the date of the liquidation the company had work in hand, some completed and some uncompleted, valued at approximately 20, 000. Completion and delivery of this work was desirable, both to realise the assets of the company and to prevent claims in damages arising which might be set off against the debts owed to the company by the customers in question. But the committee refused to complete the work, or to deliver the completed work, except upon terms that the Liquidator should pay them 25 per cent of the total invoiced, value of the work. Consequently, in the interests of securing something from this work, the Liquidator was forced to agree to make payment of such an amount to the committee; he so secured the release of the completed work and the completion of the uncompleted work. That occupied about two weeks in the so latter half of July 1972, The proceeds of the goods so disposed of amounted to 15,600, part of the 20,000 to which I referred earlier, and 3,900, a quarter of the receipts, was paid to the committee in pursuance of the agreement into which the Liquidatorhad entered with them. But the balance of the orders which were in hand at the date when the workers took possession Of the factory was lost on account, the Liquidator says, of the uncooperative attitude of the committee and the consequent failure to meet delivery dates,
When the company went into liquidation it had in its possession certain art work, transparencies and other items used in co lour printing, which were not the property of the company but the property of customers of the company. The committee assumed q control of these items and refused to release them, which naturally caused the Liquidator difficulties. On 22nd June 1972 the Liquidator, with his assistant, went to the factory, which was locked; he stated that he wished to enter; he was refused entrance to the factory; he asked if those who were in the factory were denying him access, and the chairman of the committee said that they were. From that date until 14th June in 1973, the Liquidator and his agents were denied all access to the factory. He says that in consequence of this the liquidation of the company has been substantially impeded; in particular it had been his wish, and that of the Committee of Inspection in the liquidation, that if possible the company's premises should be disposed of as a going concern. In a later affidavit he says that he did not really think that he would be able to sell the premises as a going concern. I would infer from the fact that he had dismissed all the staff but that the plant and machinery were still in the factory that what the Liquidator really had in mind was to sell the factory with the plant and machinery in situ in the hope that somebody would take it over, perhaps not technically as a going concern but as a factory which could be put into immediate opera- tion He advertised the factory for sale at some cost. Several approaches were made to him by prospective purchasers, but he wasunable to conclude the sale largely, he says, because he was unable to guarantee vacant possession on completion, For example, in December 1972, he had an offer of 272,500 from a particular prospective purchaser, provided vacant possession could be given, but this was withdrawn on account of his inability to ensure that the purchasers would obtain vacant possession on completion. The Liquidator says that the sale of the factory was further hindered by the refusal of the committee to allow certain prospective purchasers to inspect the premises. The committee was anxious to ensure that the factory would be acquired by somebody who would continue to employ the existing work force; it would seem that they were unwilling to allow any purchasers who did not answer to that description to have any facilities to see the factory, nor would they have assisted in carrying out a sale to any such purchaser.
The Liquidator goes on in his affidavit to say: "Although excluded from the factory premises and impeded in the work of the liquidation as aforesaid I deliberately refrained from instituting proceedings for possession until January 1973. This decision was approved by my Committee of Inspection"- He feared that proceedings for possession, if commenced prematurely, would result in a violent confrontation between members of the Work-in (that is to say, the former employees, who were in occupation of the factory) and their supporters on the one hand, and the police and the Liquidator's agents on the other. He also feared that upon enforcing any order for possession the plant and machinery in the factory might be damaged.
Eventually, in January 1973 he did launch proceedings for possession; he obtained a Judgment for possession, but in fact he never sought to enforce that judgment because by that time a prospective purchaser had come upon the scene, who did eventuallybuy the factory; he was a purchaser who was acceptable to the Committee and proposed to continue to employ the work force. The fact that shortly after the purchase had been completed he dismissed all the work force is not a matter which was foreseen, presumably, by those who were conoemed in the work-in This purchaser entered into a contract to buy the factory and the plant and machinery for 260,000 and the purchase was completed on 14th June 1973? as from which date there is no dispute that it was the purchaser who was liable for the rates upon the factory.
The Liquidator further states in his affidavit that the refusal of the Committee to allow the books and papers of the company to be taken from the factory created unnecessary complication in the collection of the company's book debts and the complete tion of the invoicing of the work in progress. In order to obtain these books and papers he had recourse to an application to the court for an order under the Companies Act 1948, Section 268, addressed to the chairman of the Committee. The chairman failed to comply with that order and steps were in contemplation to apply for his committal, but that was overtaken by the sale to the purchaser and need not be mentioned further.
The Liquidator says that the Work-in has led to a substantial loss on realisation of some 40, 000 to 65,000, and in the result the unsecured creditors, whose debts total some 147,500, and many of whom are small traders, will...
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