No substantial injustice: Appointment of administrators is valid

Published on
3 min read

The Chancellor of the High Court published a note regarding the effect of the appointment of an administrator out of court hours on 29 January 2020. A few days later, Zacaroli J considered whether it was a requirement that the name of the relevant court be shown on the Notice of Intention (NOI) or Notice of Appointment (NOA), and whether a NOA had been filed out of time.

Background

Solicitors acting for the directors of the company filed a NOI on 17 January 2020. On the face of the NOI, the matter was to be handled in the Business & Property Courts in Newcastle; however, the NOI was processed in London. On 31 January 2020, in court hours, the solicitors filed a NOA. The NOA, which was filed at the Newcastle Business & Property Courts, was rejected as having been incorrectly filed. Subsequently, the solicitors filed a second NOA, which did not specify a court hearing centre on its face. It was filed on 31 January; however, as it was not filed until 17:26, it was not endorsed by the court until 10:00 on 3 February 2020. The matter was referred to Zacaroli J for consideration in line with the Chancellor’s guidance.

The Decision

Zacaroli J found that there is no requirement in Schedule B1 or Rule 3.24 that the NOA must specify a particular court centre. Whilst Zacaroli assumed that the NOA was defective when filed at 14:54 on 31 January, he was satisfied that it constituted an error of procedure that could be waived pursuant to CPR 3.10(b). Accordingly, he directed that the NOA should be treated and endorsed as having been filed and accepted on 14:54 on 31 January 2020. 

He also considered a second potential defect raised by the application, specifically whether the NOA, filed on 31 January, was late given that the NOI was filed on 17 January 2020. As paragraph 28(2) of Schedule B1 provides that an appointment may not be made “after the period of 10 business days beginning with the date on which the notice of intention to appoint is filed under paragraph 27(1)”, the 10 day period elapsed on 31 January 2020. Zacaroli concluded that the period of 10 days commenced on the date on which the NOI is filed at court. As such, the NOA, even though it was to be treated as filed and accepted on 31 January 2020 was, in fact, a day out of time. 

Looking at the matter as a whole, Zacaroli was satisfied that the defect was an irregularity within Rule 21.64 of IR 2016. Furthermore, no substantial injustice had been caused. As a defect, it did not invalidate the administration proceedings. Consequently, he ruled that the administrators were validly appointed in office and shall continue to be validly appointed. He also made an order pursuant to paragraph 104 of Schedule B1 that no prior act of the administrators shall be invalidated by reason of that defect. 

In the matter of Statebourne (Cryogenic) Limited [2020] EWHC 231 (Ch)

 

Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
Sites
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R

Visitors

Register for My M&R to stay up-to-date with legal news and events, create brochures and bookmark pages.

Existing clients

Log in to your client extranet for free matter information, know-how and documents.

Staff

Mills & Reeve system for employees.