20th Jul 2022
Philip Judd (instructed by Perrin Myddelton) for the Applicant
Deputy Insolvency and Company Court Judge Kyriakides :
This is an application by PME Cake Limited (“the Company“) to restrain the Respondents, June Peggy Craig, Loraine Julie Craig and Stephanie Alice Woods, from presenting a petition to wind up the Company based on the debt alleged in a statutory demand served by the Respondents on the Company on 8 April 2022 (“the Statutory Demand“).
The Company is a manufacturer of cakes and baking products and was previously known as Knightsbridge Bakeware Centre (UK) Ltd.
The Respondents are the freehold owners of the property known as 3 Brember Road, South Harrow, Middlesex HA2 8UN (“the Property”). Prior to 2006 the freehold owner was the First Respondent. In 2006 the Second and Third Respondents acquired an interest in the freehold reversion of the Property, although the First Respondent also retained an interest.
By a lease dated 31 October 2001 the First Respondent demised the Property to Precision Machining Engineers (Harrow) Limited (“PME Harrow“) for a term of ten years (“the Lease“). The Lease was guaranteed by the Company.
Although the 10 year Lease expired on 30 October 2011, it continued pursuant to section 26 of the Landlord and Tenant Act 1954 until no later than 18 June 2019 when PME Harrow yielded up possession to the Respondents who, by that time, were the freehold owners of the Property. It is not in dispute between the parties that after 30 October 2011 the Company continued to occupy the Property on the terms of the Lease.
For the purposes of the Company’s application, the relevant provision of the Lease is paragraph 2 of schedule 3, which provides as follows:
“The Guarantor COVENANTS AND GUARANTEES with and to the Landlord that at all times during the Liability Period while the Tenant is bound by the tenant covenants of this Lease the Tenant shall punctually pay the rents and perform and observe the covenants and other terms of this Lease and if at any such time the Tenant shall make any default in payment of said rents or in performing or observing any of the covenants or other terms of this Lease the Guarantor will pay the rents and perform or observe the covenants or terms in respect of which the Tenant shall be in default and make good to the Landlord on demand and indemnify the Landlord against all losses, damages, costs and expenses arising or incurred by the Landlord as a result of such non-payment, non-performance or non-observance …” (“the Guarantee“)
The “Liability Period” is defined by paragraph 1.1 of schedule 3 (insofar as is relevant) as:
“In the case of Knightsbridge Bakeware Centre (UK) Limited the period during which Precision Machining Engineers (Harrow) Limited is bound by the tenant covenants of this Lease ….”.
Pursuant to paragraph 33 of schedule 3 of the Lease the Company covenanted at the end or sooner determination of the Lease to yield up the Property with vacant possession and in such good and substantial repair as accorded with the terms of the Lease. The Respondents allege that PME Harrow breached this covenant.