(1) Cyril Adjei (2) Anna Maria Barlow and Others v Law for All
| Jurisdiction | England & Wales |
| Judge | Mr Justice Norris |
| Judgment Date | 19 October 2011 |
| Neutral Citation | [2011] EWHC 2672 (Ch) |
| Court | Chancery Division |
| Date | 19 October 2011 |
| Docket Number | Case No: 7675 of 2011 |
[2011] EWHC (Ch) 2672
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Norris
Case No: 7675 of 2011
Charlotte Cooke (instructed by Boyes Turner) for the Applicants
Hearing date: 29 September 2011
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Norris………………………………………………………………19 October 2011
This case came before me in the Vacation Applications list. It seeks the making of an Administration Order dated to take effect as at the 28 July 2011 even though the Order itself would only be made later.
A company enters administration when the appointment of an administrator takes effect: see paragraph 1(2) of Schedule B1 to the Insolvency Act 1986.
Directors of a company may appoint an administrator under the provisions of paragraph 22 of Schedule B1. The appointment of an administrator under paragraph 22 takes effect when the requirements of paragraph 29 of Schedule B1 are satisfied: see paragraph 31 of Schedule B1.
The requirements of paragraph 29 are that the appointor shall file with the court a notice of appointment and the other prescribed documents. The nature of the notice of appointment is prescribed by Insolvency Rule 2.23(1). The accompanying documents are specified in IR 2.23(2).
In the instant case the directors had given notice of intention to appoint an administrator to the company. The appropriate form was therefore Form 2.9B: and this form was indeed filed. Paragraph 8 of Form 2.9B states (a) that the directors had given notice of intention to appoint in accordance with paragraph 26(1) of Schedule B1: and (b) that each person to whom notice of intention had been sent had consented. Those statements were incorporated into a statutory declaration as to their truth.
The second statement was in fact true. Each person to whom notice of intention had been sent had consented to the appointment. But the first statement was not true in two respects.
First, paragraph 26(1) requires notice of intention to appoint to be given to any person who is entitled to appoint an administrator under paragraph 14 of Schedule B1 ("a qualifying charge holder"). According to the charges register of the company, as at the date when notice of intention to appoint was given Barclays Bank Plc held a Debenture (first registered in April 1997). In fact there was no debt due to Barclays and the continued registration of the charge was overlooked. So no notice of intention to appoint was given to the qualifying charge holder.
Second, the "notice of intention to appoint" itself had not been correctly completed – the definition of "the appointor" had not been completed and the relevant markings were not made to indicate whether the company was an insurance undertaking or whether the EC Regulation applied. These latter defects were in my judgment capable of remedy under IR 7.55.
The greater problem is the failure to serve the charge holder. The administrators have been advised that this may invalidate their appointment, and the directors have been advised that they should make an application for an administration order which takes effect at the date of their original suspect appointment.
The jurisdiction to make such an order was identified in G-Tech Construction Limited [2007] BPIR 1275, where it was said that the court should exercise "extreme caution" before making such an order.
In G-Tech Construction Limited "the one critical step" that had not been taken was to file Form 2.10B in accordance with IR 2.23(1).
"The result was that the court never received a Form 2.10B which is a necessary requisite of an appointment taking effect under paragraph 31 of Schedule B1…".
This meant that, if one asked whether any insolvency process had started, as Hart J put it:-
"…one is simply faced with the difficulty, which seems to me to be an insuperable one, of the provisions of paragraph 31 of Schedule B1…".
This is the paragraph which says that the appointment "takes effect" when paragraph 29 has been complied with. Since no insolvency process had started the provisions of paragraph 104 of Schedule B1 (which say that an act of an administrator is valid in spite of a defect in his appointment or qualification) did not avail. That line of reasoning about paragraphs 31 and 104 does not apply in the present case. In the present case the correct Form 2.9B was filed. The difficulty is that the statutory declaration it contained was innocently inaccurate.
In Minmar (929) Limited [2011] EWHC 1159 (Ch) the directors had purported to appoint administrators, but there had been no valid meeting of the board of directors at which such a decision had been taken, and accordingly the supposed appointors had no power to appoint: see paragraph [52] of the judgment. That is the actual ground for the decision in that case.
But in an obiter passage (at paragraph [53] following) the Chancellor considered what would have been the position if...
To continue reading
Request your trial
-
Jacqueline Roma Gregory v A.R.G. (Mansfield) Ltd
...to consider whether some other form of relief is available and appropriate (see e.g. the approach of Norris J in Adjei v Law for All [2011] EWHC 2672 (Ch); [2011] BCC 963, Morgan J in Re Derfshaw Limited [2011] EWHC 1565 (Ch); [2011] BCC 631 and Norris J in re Care Matters Partnership Lim......
-
National Westminster Bank Plc v (1) Msaada Group (A Firm) (2) Gary Steven Pettit and Others
...Craig is the preferable appointee and that his appointment should be confirmed by making a retrospective order of the type made in Cyril Adjei v Law For All [2011] EWHC (Ch) 2672. The facts 66 The following are my findings of fact nearly all of which are common ground. 67 The Partnership is......
- Eiffel Steelworks Ltd
-
Francis Wessely and Joann Louise Leach (in their capacity as joint administrators of Zoom UK Distribution Ltd ((in Administration))) v Stephen Rubra
...that an appointment is a nullity if there is a fundamental defect which, applying the approach in cases such as Adjei v Law for All [2011] EWHC 2672 (Ch), a breach of paragraph 26(1)(b) would be. On the other hand, the respondents, the appointed administrators, submitted that the starting ......