Keith Panter (Petitioning Creditor) v Rowellian Football Social Club and Others
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Behrens,Judge Behrens |
| Judgment Date | 20 May 2011 |
| Neutral Citation | [2011] EWHC 1301 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: 660 of 2011 |
| Date | 20 May 2011 |
[2011] EWHC 1301 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
LEEDS DISTRICT REGISTRY
COMPANIES COURT
IN THE MATTER OF THE ROWELLIAN FOOTBALL SOCIAL CLUB
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
The Court House
Oxford Row
Leeds LS1 3BG
His Honour Judge Behrens sitting as a Judge of the High Court in Leeds
Case No: 660 of 2011
Howard Roberts, Solicitor of Schofield Sweeney for the Petitioning Creditor
Hearing dates: 13 th May 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.
BEFORE His Honour Judge Behrens SITTING AS A JUDGE OF THE HIGH COURT
This is an application by Keith Panter, ("the Petitioning Creditor") for an Administration Order in respect of the Rowellian Football Social Club ("the Club"). It is not in dispute that the Petitioning Creditor is an unsecured creditor of the Club in the sum of approximately £6,000. It is not in dispute that the Club is insolvent; a Statement of Affairs prepared by Mr Pettit one of the proposed Administrators shows a deficiency of the order of £150,000. Both of the proposed Administrators consent to act and consider that there is a realistic prospect that the objective set out in paragraph 3(1) of Schedule B1 of the Act can be achieved. Two offers have been made for the assets of the Club. If the higher offer is achieved the deficiency would only be of the order of £102,000 and would yield an estimated dividend of 41p/£ for the unsecured creditors. The application is supported by the Club's members who have considered other methods to resolve the Club's financial difficulties. The property of the Club is subject to a fixed charge in favour of Barclays Bank plc ("Barclays"). Although Barclays have the right to appoint a fixed charge receiver it has indicated that it does not wish to do so. In any event a fixed charge receiver could not sell the assets of the Club as a going concern. A proposal for a voluntary arrangement was rejected by creditors.
. Subject to the question of jurisdiction I have little doubt that it would be appropriate to exercise my discretion in favour of making an Administration Order. However there is a real difficulty in relation to jurisdiction. Is there jurisdiction to make an Administration Order in relation to the Club? That turns on the provisions of Schedule B1 to the Act and the rules of the Club.
The Club
. The Club operates a football business and "Top of the Town Social Club" activities from premises at Cecil Street, Rothwell, Northamptonshire, NN14 6EZ. Its property consists primarily of a football ground with an adjacent sports and social club. The revenue from the social club and its football activities are used to trade the business. Social functions are the main driver of the Club's income.
. The football business – Rothwell Town Football Club – plays and operates within the United Counties Football League ("the UCL"). This represents level 4 in the semi professional game in the UK.
. The Club's administrative headquarters and sole trading premises are at its premises. There is no registered office as such. There are approximately 103 members paying an annual subscription of £5 per annum.
. The rules of the Club are dated 1 st November 1990 and include:
Rule 2 defines the objects of the Club as:
i) The provision of recreational and social facilities and refreshment for the benefit of its members
ii) The provision and maintenance of a Club House at …
iii) To support and help maintain Rothwell Town Football Club financially and by any other means possible within the financial scope of the social club.
Rules 5 and 8 which deal with Membership and Subscriptions. Candidates are elected by the Committee. Under rule 8(i) there is an annual subscription and under rule (iii) non payment is deemed to be a relinquishment of membership. Under rule 21 there is power to expel members.
There are provisions (Rule 6) as to the Management of the Club, to the holding of and procedure at Meetings (Rules 14 – 20). It is not necessary to refer to them in detail.
There are no provisions relating to insolvency or dissolution. Rule 12 however provides:
No money or profits of the Club or any gain arising from the carrying on of the Club shall be applied otherwise than for the benefit of the Club as a whole as laid down in Rule 2(iii)
The Law
. As is well known the provisions relating to Administration are now contained in Schedule B1of the Insolvency Act 1986. Paragraphs 1 and 2 make it clear that an administrator of a company means a person appointed to manage the company's affairs, business and property. A person may be appointed as administrator of a company either by the court (under paragraph 10), by the holder of a floating charge (under paragraph 14) or by the Company or its directors (under paragraph 22).
. It is to be noted that all of the provisions relate to "a company" and thus the crucial question to be asked is whether the Club is "a company" within the meaning of the Schedule 1.
. For the purpose of Schedule B1 company is defined in paragraph 111(1A) to mean:
(1A) In this Schedule, "company" means—
(a) a company registered under the Companies Act 2006 in England and Wales or Scotland,]
(b) a company incorporated in an EEA State other than the United Kingdom, or
(c) a company not incorporated in an EEA State but having its centre of main interests in a member State other than Denmark.
(1B) In sub-paragraph (1A), in relation to a company, "centre of main interests" has the same meaning as in the EC Regulation and, in the absence of proof to the contrary, is presumed to be the place of its registered office (within the meaning of that Regulation).
. It is of course common ground that the Club is not within subparagraphs (a) or (b) of paragraph 111(1A). It was suggested by Mr Roberts that it was within subparagraph (c). He pointed out that the Club was not incorporated in an EEA state and had its COMI in the UK which was (of course) not Denmark.
. The difficulty with that submission, as I see it, is that it ignores the words "a company". To my mind the natural interpretation of subparagraph (c) is that it applies to companies that are incorporated in states outside the EEA. It does not apply to entities that are not incorporated at all.
Authorities
. In the course of his submissions Mr Roberts referred me to a number of authorities including In Re International Bulk Carriers [1993] Ch 77, Re Dairy Farmers of Britain Ltd
[2009] EWHC 1389 and Re Witney Town Football and Social Club [1994] 2 BCLC 487. He accepted that none of these authorities were directly in point but he invited me to follow the approach of Mummery J (as he then was) in Re International Bulk Carriers and sought to...To continue reading
Request your trial