Normally courts interpret and uphold statutory law as it stands and develop case law according to the doctrine of precedent. These, however, are not exactly normal times, we’ve all been locked up and working from home for months and now the courts have decided to take action on the basis of a statute which has yet to be introduced.
The Corporate Insolvency and Governance Bill (CIGB) is making its way through Parliament and is likely to reach the statute book at the beginning of July. We’ve put a hold on the final revision of our LPC guide in order to be able to include the anticipated statute but the courts have taken really pre-emptive action.
The provisions of CIGB are that no company (in respect of which a winding up petition has been issues after 27th April 2020) may be wound up unless either:
a) Covid-19 has had no impact on the company, or
b) While Covid-19 did impact the company the insolvency would have arisen anyway.
In Re A Company and the separate case of Travelodge v Prime Aesthetics applications were made for injunctions to restrain the presentation of winding up petitions, on the basis that they would not be able to proceed because the CIGB would have been enacted by the time the petitions were presented. Covid-19 had affected the companies and they would therefore be protected by the new statutory provisions.
These cases are interesting of themselves and useful too in that they spotlight the important impeding legislation.