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Jurisdiction(s):
United Kingdom

Winding-up petition dismissed: bona fide dispute over ‘rent’ as share price; unlawful forfeiture for want of prior demand; waiver by petition; substantial post‑petition cross‑claim (England and Wales)

Published on: 23 July 2024

Published by a LexisNexis Restructuring & Insolvency expert
Legal News
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Article summary

Tanfield (as executor of the Estate of Paul Watkins) and another company v Meadowbrook Montessori Ltd [2024] EWHC 1759 (Ch), [2024] All ER (D) 77 (Jul)

What are the practical implications of this case?

The court’s assessment of the respondent’s cross‑claim is especially significant for the following reasons:

  • Forfeiture and the common law rules—the judgment sets out the arguments underpinning the company’s ‘strongly arguable case’ that a purported forfeiture by peaceable re‑entry was unlawful where no formal common law demand for rent was made before re‑entry and the lease did not waive the requirement for such a demand (see paras [75]–[84]). This element of the ruling serves as a useful reminder of the prior demand rules at common law which may bite where a proviso for re‑entry in the lease does not expressly dispense with the necessity for a formal rent demand. Practitioners should be alive to this, particularly if the lease is of some vintage (although many modern leases expressly dispense with the need for a formal rent demand)
  • Waiver of right to forfeit on presentation of a winding‑up petition—the court also considered, in its decision, that by presenting in that context and at that time within the case...

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