Lifting the Moratorium
In the case of Gaardsoe v Optimal Wealth Management Limited [2012] EWHC 3266 the High Court considered if it had power to permit an action that was commenced in breach of the moratorium as the claimant did not have either Court sanction or the consent of the administrators when the action was commenced. By the time the claimant’s application was heard the Company had exited administration into CVL but nevertheless the Court was prepared to sanction the continuation of the Court proceedings. The Court held that although the proceedings had been issued in breach of the moratorium they were not a nuility. This was an important finding as limitation periods are not suspended during an administration. It therefore meant that new proceedings did not need to be commenced. The Court followed the precedent set in the case of Bank of Ireland (UK) plc v Colliers International UK plc [2012] EWHC 2942 in which the High Court held that the purpose of the moratorium was to protect the statutory administration scheme and the mechanism for the realisation and distribution of assets, not to protect the company from ever being the subject of enforcement action.
Contact Nigel Cook either by telephone on 01306 502294 or by email n.cook@downslaw.co.uk for further information.
