Setting aside a Notice of Intention to appoint an Administrator by a Director (‘NOI’)

The Court of Appeal has given a recent judgement setting aside an NOI. That was in the following case: JCAM Commercial Real Estate Property XV Limited v. Davis Haulage Limited [2017] EWCA Civ 267 that is reported here: http://cases.iclr.co.uk/Subscr/search.aspx?docID=WLRD2017-265. Lord Justice David Richards gave the lead judgment.

BACKGROUND:

There were 4 NOI’s filed by the director. There was on the evidence no settled intention to appoint administrators.

NEW POINTS TO BE TAKEN:

  1. Notice is to be given and a copy of the notice filed in Court, only (emphasis added) if there is a person (i.e. a Qualifying Floating Charge Holder) with a prior right to appoint an administrator (per paragraph 56)
  2. If there is no person to whom notice must be given under Paragraph 26(1), there can be no interim moratorium (per paragraph 57);
  3. Lord Justice David Richards stated at paragraph 64:

The ground for the order to remove the copy of the notice from the court file is, in my judgment, the straightforward ground that the notice was invalidly given, because the statutory pre-requisite of a settled intention to appoint was not satisfied. The notice was not validly given under paragraph 26 nor was a copy of it validly filed with the court under paragraph 27, with the result that the interim moratorium was not validly invoked. To give a notice and file a copy with the court in these circumstances is no doubt, in a technical sense, an abuse of the court’s process…For the future, it will be clear, by reason of this court’s decision, that a conditional proposal to appoint an administrator does not entitle or oblige a company or its directors to give a notice under paragraph 26 of schedule B1.’

CAN SUCCESSIVE NOI’S BE FILED?

The 2010 case of RE: Cornercare Limited does not appear to have been overruled. Therefore, it would appear that successive NOI’s can be filed as long as there is a settled intention to appoint and genuine reasons for the successive NOI(s). Those reasons should be carefully recorded as a matter of course in case the Court is involved.

COMMENT:

 A settled intention to appoint administrators is essential.

I am a solicitor. If you have any questions please give me a call on +(0) 1992 558 411 or drop me an email on: Richard.Cole@breezeandwyles.co.uk

 

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