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8-01-2020

Another Administration E-Filing Decision - Directors Can File Out Of Hours

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Re Keyworker Homes (North West) Limited [2019] EWHC 3499 (Ch)

A flurry of recent decisions including Re Skeggs Beef Limited [2019] EWHC 2607 (Ch) Re S.J. Henderson & Co Limited; and Re Triumph Furniture Limited [2019] EWHC 2742 (Ch) have been further stirred by a decision on 11th November 2019 (but only recently made available) in Manchester in Re Keyworker Homes (North West) Limited [2019] EWHC 3499 (Ch).

As a reminder- in Skeggs Beef, the applicants were purportedly appointed by qualifying floating charge holders (“QFCHs”) out of court working hours. The notice of their appointment was not filed by fax or email, in accordance with IR 2016, r. 3.20. They had  relied on the Electronic Working Pilot Scheme for the filing of documents (PD51O) but although PD51O permits the use of Electronic Working (i.e. CE-filing) to “start and/or continue… insolvency proceedings”, PD51O, para 2.1(c) creates an exception such that a notice of appointment filed by a QFCH out of hours must be filed by way of fax or email, in accordance with IR 2016, r. 3.20.  The notice was therefore filed at 5.03pm under PD51O, and not r.3.20 (as should have happened). The appointment was therefore defective. However, Marcus Smith J held that the defect was curable under IR 2016, r.12.64.

In both S.J. Henderson & Co and Triumph Furniture, the purported appointments were made by resolution of the company’s director(s), and were purportedly e-filed out of hours. Departing from the earlier decision of Barling J in HMV Ecommerce Ltd [2019] EWHC 903 (Ch), ICC Judge Burton held that there was no basis for out of hours appointments to be made by directors/companies. However, instead of holding that there had been no appointment, the Judge held that the correct approach was that the appointments took effect when the court in which the filing had been made next opened.

In the latest case (Re Keyworker Homes (North West) Limited) the court held that a notice of appointment of administrators (NoA) could be filed at court by directors of a company by e-filing outside of court hours and that such filing took effect from the time at which it was filed by the directors (and not at the time at which the court office subsequently opened and processed the documents). This means that directors are in a better position than QFCHs in making out-of-hours, out-of-court appointments as though QFCH’s can still make out-of-hours appointments by email or fax  they then also have to file the ‘follow-up’ documents the next day, in particular the statement under r.3.20(9)(d) setting out the reasons for urgency –albeit this isn’t generally onerous.

The court also found that in calculating the period of ’ten business days’ referred to in paragraph 28(2) of Schedule B1 the day upon which the NoI was filed was to be disregarded such that day 1 of the period was the working day following the filing of the NoI. This is notwithstanding the wording of IA 1986, Sch B1, para 28(2) which states ‘…after the period of ten business days beginning with the date on which the notice of intention to appoint is filed’. Therefore this allows appointors a further day by which to file their NoA, than previously thought.

About the author:

Frances Coulson is a Senior Partner and Head of Insolvency & Litigation at Moon Beever LLP.

If you have any questions regarding the article or would like some advice, please contact Frances on fcoulson@moonbeever.com.  

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