Chancery Division
Published June 6, 2012
Lehman Commercial Mortgage Conduit Ltd and Another v Gatedale Ltd
A liquidator of a company in creditors voluntary liquidation, when responding to an application made under section 112 of the Insolvency Act 1986, could alert the court to the facts and the law, but was not to do so if he did not oppose the application.
Mr Justice Vos so held in the Chancery Division on February 14, 2012, when allowing an application made under section 112 of the Insolvency Act 1986, by Lehman Commercial Mortgage Conduit Ltd and Northern Rock (Asset Management) Plc for the remedy of subrogation to be allowed. The liquidator of Gatedale Ltd, a company in creditors voluntary liquidation, did not oppose the application, but submitted a written argument to the court and drew the court’s attention to cases which he considered relevant to the determination of the application.
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HIS LORDSHIP said that a liquidator was not an officer of the court, but had to behave honestly and fairly. If the liquidator had believed that the argument was correct he would have been duty bound to put it forward. He had, therefore, to have decided the point was a bad one. The liquidator could alert the court to the facts and the law, but should not do so if he did not oppose the application.
The liquidator had reached a conclusion that he should not oppose. Therefore it was better that he confine himself to aspects of the case which he did contend for. Parties were not simply to advance arguments for academic interest or that they did not seriously contend, since it had the effect of lengthening proceedings. It was not proportionate and not in accordance with the overriding objective in the Civil Procedure Rules.