Re Harkness-Ord Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE RIMER |
| Judgment Date | 12 March 2004 |
| Neutral Citation | [2004] EWHC 674 (Ch) |
| Court | Chancery Division |
| Date | 12 March 2004 |
[2004] EWHC 674 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2
Mr Justice Rimer
MR STEPHEN ROBINS appeared on behalf of the Applicant, Mr Geoffrey Carton-Kelly
This is an application by notice dated 11 March 2004. The application is by Mr Geoffrey Carton-Kelly as one of the two joint administrators of Harkness-Ord Limited ("the company"), the other administrator being Mr Ross David Connock. The relief sought is of a slightly complicated nature, which I do not propose to detail, but is broadly directed towards steps by way of achieving an exit from the administration by way of a resolution for the voluntary winding up of the company.
The procedural history is not entirely satisfactory. The administration order was made on 30 May 2003 by Mr Justice Neuberger. No copy of that order has been provided to me or is readily available and I do not even know what the purposes of the administration were, but it is clear that the order was a limited one in the sense that the administration was to be for a limited period.
In October 2003, Mr Justice Neuberger extended the order, on condition that a further report on the administration of the company was made to the court by 15 December 2003. Again, I do not have in the papers before me the precise form of the order then made and some question has been raised by Mr Robins, who appears for the applicant, as to whether Mr Justice Neuberger's extension was limited to determine on 15 December 2003 if no report was made or whether it was, as it were, an indefinite extension. For reasons to which I will come, however, I do not think that question needs to be answered.
A further report was provided to Mr Justice Neuberger on 15 December 2003. It was sent under cover of a letter from Jones Day, the administrators' solicitors, from which I should read. It reads as follows:
"We act for the administrators of Harkness-Ord Limited. Mr Justice Neuberger granted an order to place Harkness-Ord Limited into administration on 30 May 2003 ("administration order") which was extended by an order dated 3 October 2003 ("extension order"). In accordance with the extension order we enclose the second witness statement of the lead administrator, Mr Geoffrey Carton-Kelly, dated 12 December, containing a report on the progress of the administration. Mr Justice Neuberger will note that the administrators propose that in due course steps be taken to place Harkness-Ord Limited into creditors' voluntary liquidation and have accordingly requested that the administration order be extended until 15 March 2004 or such earlier date as a certificate of the passing of the resolution for voluntary winding up of the company be filed at court. We should be grateful if you would place the enclosed witness statement before Mr Justice Neuberger today. Mr Carton-Kelly can, of course, attend at court in person with counsel if Mr Justice Neuberger so requires. If any questions arise in connection with the progress report or we may be of further assistance please do not hesitate to contact Helen Anderson at this firm. We look forward to receiving information from the court in due course whether and on what terms the administration should continue."
With that letter there was enclosed Mr Carton-Kelly's witness statement dated 12 December 2003. It referred to the completion of a sale of the business of the company and of certain associated rights, which had apparently taken place on the day of the administration order itself. It made clear in paragraph 5.2 that the collection of book and other debts of the company was still continuing, as were negotiations in connection with the repayment of an intercompany debt due to the company. It explained that a further £17,000 of book debts remained due.
The net position was that, as that witness statement made clear, the administration was not yet complete but was at least nearing completion. The administrators' view expressed in the statement was that, once all outstanding matters had been resolved, there would be insufficient funds for a viable voluntary arrangement proposal and that instead, upon discharge of the administration order, the company should be put into voluntary liquidation.
Against that background, Mr Carton-Kelly asked in his witness statement that the administration order should be continued for a further three months until 15 March 2004, explaining that during that period the administrators hoped to complete the collection of debts and finalise the negotiations in relation to the intercompany debt. He also said that they contemplated taking steps "to place the company into creditors' voluntary liquidation on or before that date." Mr Carton-Kelly concluded paragraph 8.2 of his witness statement by saying this:
"In the event that a resolution to place the company into creditors' voluntary liquidation is passed prior to 15 March 2003 [and he means, of course, 2004] the joint administrators respectfully request that upon the filing at court by the company of a certificate of the passing of a resolution for voluntary winding up of the company, pursuant to section 84 of the Insolvency Act 1986, an application to discharge the administration order be deemed to have been made and the administration order be discharged in the form of the application and minute of order exhibited to...
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