Whilst legislation preventing the presentation of winding up petitions by landlords against commercial tenants is not yet in force, it seems the courts are ready and willing to embrace the spirit of the proposed new law.
Two recent cases are evidence of this - both with different outcomes.
In the case of Shorts Gardens the court considered an application to prevent winding up petitions being presented, which included (amongst others) a claim that the business of the debtor company had been adversely affected by the COVID-19 pandemic and, given the intended legislation, the winding up order should not be made. In denying the application, Mr Justice Snowden noted the contents of the government's press statement and said that he considered that it was "overwhelmingly likely" that the legislation would only apply to companies in certain sectors (namely petitions by landlords for unpaid rent) and, further, that the defence was opportunistic given that the nature of the debts (many of which arose pre-COVID-19 for unpaid business rates). Mr Justice Snowden stated:
"The reason that [the debtor companies] have not paid the debts that they owe has nothing to do with the coronavirus, and they are not the sorts of entity owing the type of liabilities which the proposed legislation seems to be intended to protect."
It seems that Mr Justice Snowden, at least, has no tolerance for companies seeking to take advantage of the current pandemic for their own gains (or to avoid payment of debts).
In another recent case (protected by a privacy order), the Court allowed an injunction preventing a landlord from presenting a winding up petition against a retail business citing the government's announcement as regards the intended legislation. The Court held that it was entitled to take into account the intentions of the government, despite the fact that the legislation was not yet in force. Doubtless, commercial tenants will breath a sigh of relief with this decision.
Not everyone is happy with this outcome however; some in the industry consider it troubling that the court are looking to enforce proposed legislation which is not yet law (even if it is expected to be law imminently). Certainly, the courts are treading a tricky line here in a currently fast-paced area of law.
Nonetheless, from a practical perspective, it appears that the courts may be willing to assist companies who are facing financial difficulties as a result of the COVID-19 and give effect to the intended legislation, but will not go so far as to prevent any winding up order being made.