Bxl Services v the Insolvency Act 1986
| Jurisdiction | England & Wales |
| Judge | Judge Purle |
| Judgment Date | 10 July 2012 |
| Neutral Citation | [2012] EWHC 1877 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No 8039 of 2012 |
| Date | 10 July 2012 |
[2012] EWHC 1877 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Royal Courts of Justice
The Rolls Building
7 Rolls Building
Fetter Lane
London EC4A 1NL
His Honour Judge Purle QC
(Sitting as a Judge of the High Court)
Case No 8039 of 2012
James Morgan (instructed by Shakespeares) appeared for the applicant directors
No-one else appeared
Judge Purle QC:
This case concerns the validity of the appointment of joint administrators of a charitable company limited by guarantee made by the directors out of Court.
As a result of Government cuts and a large inherited pension deficit, the company became insolvent and, following advice, the directors resolved to appoint the Joint Administrators on 23 rd January 2012. The directors had power to make such an appointment under paragraph 22 of Schedule B1 of the Insolvency Act 1986 as amended ("Schedule B1").
Schedule B1 materially provides as follows:—
"26(1) A person who proposes to make an appointment under paragraph 22 shall give at least five business days' written notice to —
(a) any person who is or may be entitled to appoint an administrative receiver of the company, and
(b) any person who is or may be entitled to appoint an administrator of the company under paragraph 14.
(2) A person who proposes to make an appointment under paragraph 22 shall also give such notice as may be prescribed to such other persons as may be prescribed."
Amongst such other persons is the company itself.
There was in this case no person entitled to appoint either an administrative receiver, or an administrator under paragraph 14, upon whom a notice of intention to appoint had to be served. There was nothing underhand in the appointment. The Board resolution of 23 rd January 2012 confirmed the consent of the directors (on behalf of the company) to both short notice and the appointment itself. However, no formal notice in a prescribed form was given to the company.
On one construction of Schedule B1 and the Insolvency Rules 1986, the failure to give notice in a prescribed form to the company was a fatal omission, invalidating the appointment. On an alternative construction, it was not an omission at all, as no notice of any kind to the company was required. On a third construction, even if notice in a prescribed form (or any notice) was required, the omission to give it was not fatal to the appointment. There are conflicting first instance decisions on these and similar points.
At the time of the hearing before me, the most recent decisions were Re Virtualpurple Professional Services Ltd [2012] BCC 254 (Norris J) and National Westminster Bank plc v Msaada Group [2012] BCC 226 (Warren J). These 2 cases were decided on the same day, in different ways. Norris J held that prior notice to the company was unnecessary, and (even if necessary) the failure to give notice did not invalidate the appointment. Warren J held (in the case of an insolvent partnership) that failure to serve prior notice on the supervisors of a voluntary arrangement invalidated the appointment. As those 2 cases were decided on the same day, that necessarily meant that neither of them considered the other. They were also decided without considering my own decision in Re Assured Logistics Solutions Ltd [2011] EWHC 3029 (Ch), which had not then been transcribed. I decided in that case that, even if notice to the company was required in the case of directors' appointments, the failure to give notice did not invalidate the appointments. Each of these 3 decisions in turn considered the earlier conflict between Hill v Stokes plc [2011] BCC 473 and Minmar (929) Ltd v Khalatschi [2011] BCC 485, the latter of which was decided without consideration of the former, as Hill v Stokes had not then been reported.
This conflict of judicial opinion is unfortunate, to say the least. Understandably on that state of the authorities, Mr Morgan addressed me on the proper approach of a first instance Judge to conflicting first instance decisions. He referred me to the decision of Nourse J in Colchester Estates (Cardiff) v Carlton Industries plc [1984] 2 All ER 601. It is clear that I should ordinarily follow...
To continue reading
Request your trial
-
Euromaster Ltd
...(which themselves have been followed by Arnold J in Re Ceart Risk Services [2012] EWHC 1178 and HHJ Purle QC in Re BXL Services [2012] EWHC 1877 (Ch)). This is to focus on the consequences of non-compliance and, taking into account those consequences, to consider whether Parliament intended......
-
His Majesty's Revenue and Customs v Secretary of State for Work and Pensions and GS (TC)
...44 at [9], Lewison J in Re Cromptons Leisure Machines Ltd [2006] EWHC (Ch) 3583, [2007] BCC 214 and HHJ Purle QC in Re BXL Services [2012] EWHC 1877 (Ch)). 40. I therefore follow the decision of Upper Tribunal Judge Jacobs in JL preference to that of Upper Tribunal Judge Mitchell in AB. No ......
-
Eiffel Steelworks Ltd
...defect or irregularity and that the injustice cannot be remedied by any order of the court." The authorities 24 In Re BXL Services [2012] EWHC 1877 (Ch); [2012] BCC 657, His Honour Judge Purle QC stated at paragraph 5: "On one construction of Schedule B1 and the Insolvency Rules 1986, the f......
-
Re Harlequin Management Services Ltd (Applicant)
...3487 (Ch), [2012] BCLC 330 and in Re Bezier Acquisitions Ltd [2011] EWHC 322 (Ch), [2012] BCC 219. Subsequently in Re BXL Services [2012] EWHC 1877 (Ch), [2012] BCC 657 His Honour Judge Purle QC, sitting as a judge of the High Court, held that the law should be taken to have been settled at......
-
FCA And Administrators Appointments: Filing Of The Financial Conduct Authoritys Consent With The Notice Of Intention To Appoint Administrator(s)
...that it may be possible that the decision in this case (as well as earlier authorities such as Re Ceart Risk and Re BXL Services [2012] EWHC 1877 (Ch)) could be challenged and future cases distinguished on their facts and the principles of law they concern. For example, in the Harlequin cas......