Re Derfshaw Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morgan |
| Judgment Date | 02 June 2011 |
| Neutral Citation | [2011] EWHC 1565 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: 04850 of 2011 |
| Date | 02 June 2011 |
[2011] EWHC 1565 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Morgan
Case No: 04850 of 2011
Ms R Agnello QC (instructed by Edwin Coe LLP) appeared on behalf of the Claimant
No of words: 1,779
No of folios: 25
I have before me applications in relation to seven companies for administration orders in each case. I will not read out the names of the seven companies. The names will appear in the orders which I will make. The application for administration orders in each case is made by the directors of, and in the case of a sole director, the director of the relevant company. That is permissible under paragraph 12(1)(b) of schedule B1 to the Insolvency Act 1986. Paragraph 11 of schedule B1 enables the court to make an administration order only if it satisfied of two matters.
The first refers to the company's ability to pay its debts and the second refers to the administration order being reasonably likely to achieve the purpose of administration. If I am satisfied of those matters, then I have a discretion under paragraph 13 which enables me to take a number of steps, one of which is to make the administration order sought.
Ms Agnello QC appears on behalf of the applicants in all seven of these cases. I have been given a considerable amount of evidence, quite properly, which deals with the criteria on which I must be satisfied before I have jurisdiction to make such an order and also deals with the desirability of an administration order in each case. I have been taken through that material. The cases in this respect present no difficulty. I find that the company in each case is or is likely to become unable to pay its debts.
I also find that the administration order in each case is reasonably likely to achieve the purpose of administration. The relevant purpose of administration is, so far as I need describe it, the one described in paragraph 3(1)(b) in schedule B1 that an administration order is reasonably likely to achieve a better result for the creditors as compared with liquidation. I am also satisfied on the evidence that it is entirely right and proper that the court should make these administration orders. So far as I have indicated, the case presents no difficulty, nor anything unconventional.
However, the circumstances in which it has become necessary to make these applications to the court should be briefly described. In each case, some weeks or months ago, there was a purported appointment of administrators out of court. The appointments out of court were on the basis that it was open to the directors of the company to appoint out of court under paragraph 22(2) of schedule B1. With an appointment out of court, certain pre-conditions must be satisfied. Paragraph 26 of schedule B1 provides for a notice of an intention to appoint. Paragraph 26(1) is not directly in point but paragraph 26(2) provides that:
"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."
The prescribed notice and the prescribed persons are dealt with in the Insolvency Rules 1986, in particular in Rule 2.20(2) where it is provided that a copy of the notice of intention to appoint must be given to four classes of person so far as material, in addition to the persons specified in paragraph 26 (and I comment that perhaps was intended to be a reference to paragraph 26(1)). Rule 2.20(d) refers to the company, if the company is not intending to make the appointment.
In this case and, indeed, as has been common practice as I understand it, no notice of intention to appoint was given by the directors who were intending to appoint to the company in respect of which they were intending to appoint. What is the effect of that omission? Paragraph 28(1) of schedule B1 states:
"An appointment may not be made under paragraph 22 unless the person who makes the appointment has complied with any requirement of paragraphs 26 and 27 and …"
and then further provision is made, although the further provision...
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Table of Cases
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