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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Lennox Holdings Plc, Re  EWHC B11 (Ch) (20 June 2008)
Cite as:  BCC 155,  EWHC B11 (Ch)
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London, WC2A 2LL
B e f o r e :
|RE: LENNOX HOLDINGS PLC
Cliffords Inn, Fetter Lane, London EC4A 1LD
Tel: 020 7269 0370
Crown Copyright ©
MR JUSTICE LEWISON:
"If it is to be demonstrated that the centre of main interest is somewhere other than the state where a company’s registered office is located, it consequently needs to be shown that the head office type of functions are performed elsewhere. The focus must be on the head office functions rather than simply on the location of the head office because a head office can be just as nominal as a registered office if head office functions are not carried out there."
The Advocate-General said that he found that submission sensible and convincing.
"The ascertainability by third parties of the centre of main interests is not central to the concept of the centre of main interests. That can be seen from recital 13 of the preamble itself which states that, “The centre of main interests should correspond to the place where the debtor conducts the administration of his interests on a regular basis.” In other words, in the case of a corporation, where its head office functions are exercised. Recital 13 continues, “and which is therefore ascertainable by third parties.” In other words, it is because the corporation’s head office functions are exercised in a particular member state that the centre of main interests is ascertainable there."
The Advocate-General again agreed with that submission.
"34. It follows that in determining the centre of the main interests of the debtor company, the simple presumption laid down by the Community legislature in favour of the registered office of that company can be rebutted only if factors which are both objective and ascertainable by third parties enable it to be established that an actual situation exists which is different from that which locating it at that registered office is deemed to reflect.
‘35. That could be so in particular in the case of a letterbox company not carrying out any business in the territory of the member state in which its registered office is situated.
‘36. By contrast, where a company carries on its business in the territory of the member state where its registered office is situated, the mere fact that its economic choices are or can be controlled by a parent company in another member state is not enough to rebut the presumption laid down by the regulation."
"One, the strategic operational and financial management of the company is conducted in this jurisdiction. Mr Terry, the sole director of the company, lives and works in this jurisdiction although he visits the company in Spain regularly. Mr Tattersall, the operations manager of each of the companies in the group, is English and works in England. The board and management meetings of the company are held at Lennox’s registered office in Gower Street. The accounts for the group which include the company are prepared by English auditors based in Hertfordshire.
‘Two. Unilever, the major supplier of the company, would call Mr Terry when they saw movements in the Lennox share price on AIM. For example, they called him when the shares were suspended. Ocean Spray, another creditor, likewise took note of movements in the Lennox share price and phoned Mr Terry in relation to the continuation of supplies. Mr Terry’s view is that the perception of the major creditors of the company is that the group is an English group registered on a UK stock exchange and that supply creditors of the company follow the AIM announcement of Lennox’s share price. Lennox is the ultimate parent of the company although as the ECJ pointed out in the Eurofood case, that by itself is not enough to rebut the presumption. The company does not have a commercial undertaking which is separate from that of Lennox. Lennox provides the working capital to enable the company to trade. A substantial majority of the company’s creditors are in this jurisdiction and indeed amongst those creditors is Lennox itself. Thus the financing of the company, its major decisions and the administration of the company itself is conducted in this country and through English suppliers, English directors and with English funding."
MS STONEFROST: I am grateful, My Lord. I hope that a copy of some orders have made their way into your bundle at tab six.
MR JUSTICE LEWISON: Yes, tab six.
MS STONEFROST: My Lord, the only point that appears in the order that I haven’t addressed Your Lordship on is the confidentiality of some of the material. Paragraph six in each of the orders contains a restriction on disclosure until 21st July.
MR JUSTICE LEWISON: What is the magic of the 21st July?
MS STONEFROST: My Lord, I did ask that question myself. I understand that it is in order to give the administrator sufficient time to sell the business. I for myself would normally not have put any date in but would have simply required there to be an application given to the Court of which obviously the administrators had notice. I don’t know...
MR JUSTICE LEWISON: Well, I mean, if anybody wants to inspect, they are still entitled to apply because paragraph six does contemplate leave being given before 21st July but once 21st July comes and goes, anybody can have a look.
MS STONEFROST: My Lord, yes. My Lord, could I actually redraft that [inaudible] more usual way?
MR JUSTICE LEWISON: Yes.
MS STONEFROST: I think this was taken from MG Rover and I have no idea why MG Rover had a date in it.
MR JUSTICE LEWISON: Right.
MS STONEFROST: So subject to me redrafting that, My Lord, the orders are all in the same form.
MR JUSTICE LEWISON: Yes, fine.
MS STONEFROST: I am grateful, My Lord. [Inaudible] I can send them to you.
MR JUSTICE LEWISON: Yes, the only thing is I am not sure if I am going to be here next week. I still do not know yet. I may be going to Bristol but they can always be emailed.