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Laverty v British Gas Trading Limited

Author: Nigel Cook

This case involved a claim by British Gas Trading Limited (BGT) against former administrators of Peacock Stores for gas and electricity supplies to vacant stores. BGT argued that these supplies should be an expense of the administration and thus have a priority.

The case arose after the administration of the Peacock Group of Retail Stores which began in January 2012. Upon the appointment of administrators BGT terminated the existing supply contracts but as the administrators were trading on, supply was continued under deemed contracts arising under the Gas Act 1986 and the Electricity Act 1989.

The administrators accepted that supplies during the period of trading ranked as expenses of the administration but they argued that after the stores had ceased trading and been vacated there should be no claim to priority. On the facts it seems that gas and electricity continued to be consumed at the premises, although it is not clear by whom and that the administrators had refused permission to allow BGT to enter and disconnect supplies.

The High Court followed guidelines set out by the Supreme Court in the Nortel case in relation to post administration Financial Support Directions issued by the Pensions Regulator. The Court held that these supplies did not qualify as expenses for the administration but would instead be debts provable in the liquidation. The Court noted that the relevant Acts introducing the deemed contracts did not contain any implication that continued supplies should benefit from the statutory priority.