Mr. T. Gaardsoe v Optimal Wealth Management

JurisdictionEngland & Wales
JudgeMr Martin
Judgment Date28 February 2012
Neutral Citation[2012] EWHC 3266 (Ch)
CourtChancery Division
Date28 February 2012

[2012] EWHC 3266 (Ch)



The Rolls Building

7 Rolls Buildings

London EC4A 1NL


Mr. John Martin QC

Mr. T. Gaardsoe
Optimal Wealth Management

Mr. C. Douthwaite (instructed by CJ Jones) for the Claimant

Mr. A. Hall Taylor (instructed by Plexus Law) for the Defendant

*** Transcript prepared without access to the case documents ***

Mr Martin QC:


I have before me two applications made by the claimant under the Insolvency Act 1986 ("the 1986 Act"). Both applications are for leave to pursue existing proceedings against the defendant, the claimant's objective being to prevent his claim in those proceedings being met with a limitation defence.


The applications arise in the following circumstances. The claimant was a professional footballer. In 2005 he suffered an injury or injuries which he says brought his career to an end. He had taken steps to insure against such an eventuality through the defendant, a company that specialised in providing financial services and advice, including advising on and obtaining insurance, to sportsmen. It turned out, however, that he was not insured in respect of the type of injury he suffered. He says that this was through the defendant's negligence or breach of contract.


The defendant is now in liquidation but is itself insured against claims for negligence. The claimant wishes to take the benefit of that insurance under the Third Parties (Rights Against Insurers) Act 1930, but in order to do so he must first establish his claim against the defendant. Proceedings for that purpose were issued in the Queen's Bench Division on 26th August 2010. Before issuing them, the claimant's solicitors did an internet search of the company's register on 23rd August 2010 which failed to reveal what was in fact the case, namely that the defendant had gone into administration on 13th August 2010. In consequence, paragraph 43(6) of schedule B1 to the 1986 Act applied. That paragraph is in the following terms:

"No legal process (including legal proceedings, execution, distress and diligence) may be instituted or continued against the company or property of the company except — (a) with the consent of the administrator, or (b) with the permission of the court."


The claimant's advisers found out that the defendant was in administration at the end of September 2010. Correspondence ensued between the claimant's advisers and the administrators and their advisers in which the latter agreed to extend the time for service of the claim form, ultimately to the beginning of March 2011. That was expressly without prejudice to their rights to refuse consent to the commencement and continuance of the proceedings, to challenge the validity of the claim form, and to assert that the claim was statute barred.


The claim form was served on 25th February 2011, within the extended time allowed for its service, together with the particulars of claim. The defendant has not served a defence but, on 25th March 2011, it issued an application in the proceedings for the following relief:

"1. A declaration that the court does not have jurisdiction over this claim and 2. An order that the claim form, alternatively service of the claim form, be set aside on the grounds that the defendant was in administration prior to the issue of the claim form and so the consent of the defendant's administrator, or the permission of the court was required before the claim form was issued, pursuant to paragraph 43 of schedule B1 of the Insolvency Act 1986, such consent or permission not having been sought."


That application is due to be heard in May of this year but its outcome is likely to depend on the outcome of the applications before me. The defendant's application eventually caused the claimant to issue the first of the applications that are before me, which is an application under paragraph 43(6) of Schedule B1 to the 1986 Act for permission to continue the proceedings.


The application was issued on 21st June 2011 with a return date of 3rd August 2011. On the first of those dates the defendant was still in administration, but by the time the matter came before this court on 3rd August it had ceased to be in administration, having gone into creditors' voluntary liquidation on 28th July 2011.


The hearing on the 3rd August was adjourned and on 10th August the claimant issued the second of the two applications now before me, which seeks permission under section 130(2) of the 1986 Act to proceed with the Queen's Bench proceedings. The subsection is in the following terms: "When a winding-up order has been made or a provisional liquidator has been appointed, no action or proceeding shall be commenced or proceeded with against the company or its property, except by leave of the court and subject to such terms as the court may impose."


I say at once that this second application seems to me to be misplaced. Section 130(2) does not apply to a voluntary winding-up. In a voluntary winding-up there is no bar on proceedings against the company. Instead, the company and others may apply for a stay of such proceedings through a combination of Sections 112 and 126 of the 1986 Act. It follows that if the Queen's Bench proceedings exist at all, they may now be pursued against the company without the necessity for any permission from this court.


It is the defendant's case that the Queen's Bench proceedings do not exist at all; that they are a nullity, since they were commenced against a company in administration without the necessary permission for their commencement being first obtained from the administrators or the court. According to the defendant, permission cannot be granted after the proceedings have been commenced: paragraph 43(6) of Schedule B1 requires consent to the institution of legal process and the reference to such process being continued with permission applies only where the proceedings have been started before the administration occurs. Moreover, if that is wrong, and permission could in theory be given retrospectively, the jurisdiction to give it lasts only so long as the administration continues. Since the company is now in liquidation it is too late for the court to intervene.


Finally, if the defendant is wrong in these arguments, it says that permission should be withheld as a matter of discretion because of the claimant's delay in making the applications.


I deal first with the question of whether the absence of prior...

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2 cases
1 books & journal articles
  • Administration
    • United Kingdom
    • Wildy Simmonds & Hill Law of Insolvent Partnerships and Limited Liability Partnerships Contents
    • 29 August 2015
    ...granted retrospectively where a company is no longer in administration: Gaardsoe v Optimal Wealth Management Ltd (in Liquidation) [2012] EWHC 3266 (Ch), [2013] Ch 298. 220 Re Atlantic Computer Systems plc [1992] Ch 505 at 542 at (4). 128 Law of Insolvent Partnerships and Limited Liability P......

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