What a mess!

Published on
2 min read

This case is the latest decision demonstrating the time and money wasted by the poorly drafted Insolvency Legislation and its interaction with other legislation.

Practitioners are now able to file documents electronically, which are often processed by court staff out of the traditional court hours (between 10am and 4pm/4.30pm).

In two administrations, the administrators were appointed by the companies’ directors by electronic filing before 10am. 

This was inconsistent with paragraph 8.1 of the relevant practice direction on Insolvency Proceedings, which provides that only qualifying floating charge holders can appoint administrators outside normal court hours.

The ICCJ refused to interpret the practice direction in any other way and declined to follow the Judge’s decision in Wright v HMV E-commerce Limited.

She held that both sets of administrators were appointed at 10am on the day of their appointment, not earlier, but also clarified that this issue did not affect Notices of Intention to Appoint Administrators, which were effective from the time of e-filing.

So, notwithstanding that the court has finally dragged itself into the electronic age, practitioners need to try and ensure, as far as they can, that e-filing of Notices of Appointment are made well within court hours, noting that if something is filed in the afternoon, it may not be actioned until after court hours meaning that the appointment would only be effective at 10am the next business day.

Presumably legislative change will be needed to solve this latest drafting debacle.

Re SJ Henderson & Company Limited and Triumph Furniture Limited [2019] EWHC 2742 (Ch)  

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