Sealing Administration Expenses, Puncturing Rescue Culture?

Insolvency Law & Practice, Vol. 23, 2007

19 Pages Posted: 23 Apr 2007


The recent decision in Exeter City Council v Bairstow (Re Trident Fashions [2007] EWHC 400 (Ch) (02 March 2007) confirms the correct approach to insolvency expenses: what constitutes an insolvency expense is purely a matter of statutory construction, a process enlightened by the Lundy Granite principle in respect of certain pre-insolvency claims such as rent.

The much touted 'expenses principle' enunciated in Re Atlantic Computer Systems [1992] Ch 505 is unsustainable.

Non-domestic business rates are payable as administration expenses under rule 2.67 of the Insolvency Rules 1986. However, this might render rescue more difficult to achieve in some cases. Legislative reconsideration is called for.

Keywords: Administration expense, insolvency expense, liquidation expense, rates, rescue culture

JEL Classification: K10, K11, K20, K29, K30, K39

Suggested Citation

Ho, Look Chan, Sealing Administration Expenses, Puncturing Rescue Culture?. Insolvency Law & Practice, Vol. 23, 2007, Available at SSRN:

Look Chan Ho (Contact Author)

Des Voeux Chambers ( email )

38/F Gloucester Tower
The Landmark
Hong Kong
+852 2526 3071 (Phone)
+852 2810 5287 (Fax)

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