Winding-up expenses and port land occupation: liquidator must pay rent in priority and restore vacant possession.

Rent for port trust land occupied by an official liquidator during liquidation was treated as part of the winding-up expenses and recoverable in priority at the notified enhanced rate until vacant possession was delivered. The liquidator could not lawfully scale down the claim in the special facts described. The article also notes that an auction purchaser placed in occupation without authority had no enforceable right to retain the land, seek renewal or transfer of the lease, or insist on symbolic possession; the operative direction was restoration of actual vacant physical possession to the port trust.

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Issues: (i) Whether the rent payable for the Port Trust land in the possession of the official liquidator was to be treated as an expense of winding up and payable at the notified rate under the Major Port Trusts Act, and whether the liquidator could reduce or scale down the claim. (ii) Whether the official liquidator was bound to restore vacant physical possession of the land to the Port Trust and whether the auction purchaser had any enforceable right to continue in occupation or to obtain renewal or transfer of the lease.

Issue (i): Whether the rent payable for the Port Trust land in the possession of the official liquidator was to be treated as an expense of winding up and payable at the notified rate under the Major Port Trusts Act, and whether the liquidator could reduce or scale down the claim.

Analysis: The occupation of the leased land by the official liquidator, after the company had gone into liquidation, was held to be part of the process of winding up. The earlier order of the Court had already recognised the Port Trust's entitlement to rent for the period of such possession and had directed that the amount be paid before distribution of the sale proceeds towards other debts. The statutory scheme governing port rates under section 48 was found not to govern custody of land by an official liquidator in liquidation proceedings, but in the special facts of the case the Port Trust was held entitled to rent at the enhanced notified rate under section 49 from the relevant date until delivery of possession. The liquidator's partial rejection of the claim was therefore unsustainable.

Conclusion: The claim for rent was held to be part of the winding-up expenses and recoverable in priority, and the appellant succeeded on this issue.

Issue (ii): Whether the official liquidator was bound to restore vacant physical possession of the land to the Port Trust and whether the auction purchaser had any enforceable right to continue in occupation or to obtain renewal or transfer of the lease.

Analysis: The auction purchaser had been allowed into possession contrary to the earlier directions of the Court and had no independent legal right to retain the land or insist upon renewal or transfer of the lease. The Court reiterated that the liquidator had no authority to hand over the land to the purchaser and that the possession continued to be unauthorised. The direction to deliver legal possession was understood as a direction to hand over actual vacant physical possession, and the liquidator's offer of symbolic possession was rejected. The Port Trust was therefore entitled to immediate restoration of possession, and the purchaser's plea based on section 529A was held to be of no avail.

Conclusion: The liquidator was directed to deliver vacant physical possession to the Port Trust, and the auction purchaser was held to have no enforceable right to retain the land or seek lease renewal or transfer.

Final Conclusion: The appeal succeeded in part by securing recognition of the Port Trust's right to enhanced rent as a winding-up expense and by directing restoration of possession, while the connected attempts to sustain the purchaser's occupation failed.

Ratio Decidendi: Rent arising from unauthorised continued occupation of port land by the official liquidator during liquidation is recoverable as a winding-up expense in priority to other debts, and the official liquidator cannot confer any right of retention on an auction purchaser without authority of the Court.

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