ICE MEDIA INTERNATIONAL Ltd & BLUE POINT MEDIA Ltd (both (in Liquidation)) v Q3 MEDIA Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE RIMER |
| Judgment Date | 22 May 2006 |
| Neutral Citation | [2006] EWHC 1553 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: 2878/2006 |
| Date | 22 May 2006 |
[2006] EWHC 1553 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Mr Justice Rimer
Case No: 2878/2006
MS R AGNELLO (instructed by Stephenson Harwood) appeared on behalf of the Applicants
MR R TEMMINK (instructed by Denton Wilde Sapte) appeared on behalf of the Interim Receiver of the Respondent
MS P SMALL (instructed by Devereaux Solicitors) appeared on behalf of the Respondent, Q3 Media Limited
MR S ARMSTRONG (instructed by Ms Tara Connolly of the Assets Recovery Agency) appeared on behalf of the Director of the Assets Recovery Agency
(As approved)
This is a creditors' application issued on 24 April 2006 for the appointment of an administrator. The applicants are Ice Media International Limited and Blue Point Media Limited. Both companies are in liquidation. Mr Stephen Wadsted is the liquidator of each, and the application is made on his instigation.
The company the subject of the application is Q3 Media Limited. It was incorporated on 25 January 2005 and carries on a business of artistic and literary creation and publication. The proposed administrator is Peter Yeldon, a licensed insolvency practitioner, who has consented to act as such, and whose opinion is that the purpose of administration is reasonably likely to be achieved. Mr Yeldon and Mr Wadsted are both partners in Middleton Partners.
The basis of the application is explained in Mr Wadsted's witness statement of 21 April 2006. He was appointed the liquidator of Ice Media on 6 September 2005 and of Blue Point on 9 November 2005. He claims that Q3 owes Ice Media £32,009.06 and Blue Point £88,073.2Those claims arise as follows. Ice Media and Blue Point each had a distribution agreement with Odyssey Publisher Services Limited. On 18 April 2005, the day on which the petition for the winding up of Ice Media was presented, there were purported assignments to Q3 by Ice Media and Blue Point of their rights to payments under those agreements with Odyssey. Mr Wadsted says the assignments were purportedly made by Mr John Szepietowski who was at that stage an officer of neither company.
The assignments are not in evidence. All that is in evidence are two copy letters of 18 April 2005 to Odyssey from Mr Szepietowski written on Ice Media and Blue Point notepaper. They purport to give notice to Odyssey of the assignment to Q3 of each company's right to receive payments from Odyssey, and they direct Odyssey to make future payments to Q3. Mr Wadsted says he has identified no consideration for the assignments, which he says amounted to an improper diversion of the assets of Ice Media and Blue Point.
Q3's alleged indebtedness in the sums I have summarised above has arisen because in June and July 2005, following the assignments, Odyssey paid those amounts to Q3, being money which, but for the assignments, would have been payable to Ice Media and Blue Point. Odyssey admits it has so paid Q3, save that it says that by mistake it paid £17,791.94 of the money into Ice Media's account. Mr Wadsted has been unable to identify that payment, but this discrepancy is not material to the present application. On any footing, Odyssey admits paying £14,217.12 to Q3 that would, but for the assignments, have been paid to Ice Media.
Mr Wadsted's case is that, in these circumstances, each of Ice Media and Blue Point has a claim in restitution against Q3 entitling it to payment of the money wrongly paid to it by Odyssey. By his solicitors, Stephenson Harwood, he has demanded payment by letters to Q3 of 16 February 2006 warning that, if no payment were made, Ice Media and Blue Point would take proceedings against Q3 for declarations that the sums claimed were due and, by inference (although the letters do not say so in terms) orders for payment. No payment has been made and the failure to do so is relied upon as evidence of Q3's inability to pay its debts.
Mr Wadsted further explains that a former director of Q3, Mr David Holliday, has told him that Q3 has an ongoing business that can be sold, whereas Mr Wadsted's opinion is that this would not be a possibility if Q3 were forced into liquidation. Mr Holliday has apparently volunteered himself for re-employment by Q3 for the purpose of its resale, so he is obviously keen to make something for himself out of the administration proposal. He has apparently also offered the imprecise view that:
"the business of the Company would deteriorate with the passage of time and it is therefore important that any sale of the business of the Company should be effected at the earliest possible opportunity."
It is also apparent that Mr Holliday would be an interested purchaser if the business is put up for sale. Mr Wadsted concludes that the making of an administration order will enable the more advantageous realisation of Q3's assets than would be effected on a winding up. Q3 has a debenture with Barclays but the evidence is to the effect that it has since been satisfied and that there is no debt outstanding to Barclays, which anyway consents to the application or at least does not oppose it.
The administration application and Mr Wadsted's evidence were served on Q3 on 25 April 2006 and, by post, on Mr Yeldon on the same day. The application and evidence were on the same day also served on BDO Stoy Hayward. Their interest in the matter is that, on 13 April 2006, Sara Dayman of that firm was appointed as interim receiver of the assets of Q3. That order was made by Mrs Justice Cox in the Administrative Court of the Queen's Bench Division in proceedings between The Director of the Assets Recovery Agency ("the Director") and Q3. The order was made under section 246 of the Proceeds of Crime Act 2002 (" POCA") and was made in respect of Q3's property listed in Schedule 2 to the order, namely (i) its bank account at Barclays, (ii) seven magazine titles that Q3 publishes, (iii) various fixtures and fittings, and (iv) any other property of Q3 or over which it had control which, on further investigation by the interim receiver, appears to her to be recoverable or associated property. Paragraph 2 of the order restrained Q3 from removing the listed property from England and Wales or from dealing with or disposing of it, save that Q3 was required pursuant to section 250 of POCA to deliver it to the interim receiver or else to do what was required by the interim receiver to preserve it. The order conferred a wide range of powers upon the interim receiver in relation to the listed property, including a power of management. Paragraph 5 of Schedule 6 to POCA explains that such a...
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