Referential administration appointments revisited

Insolvency Bitesize - March 2019

Another High Court case has reached the same conclusion as in Re Towcester Racecourse (which we considered in our November 2018 edition) that an administration appointment will not be invalid where the notice of appointment is simply endorsed with the date and time of filing. In doing so, it provides clarity on the proper interpretation of a troublesome Insolvency Rule.

The High Court in Re Spaces London Bridge Limited [2018] EWHC 3099 (Ch) was clear that specifying the date and time of any act earlier than when the appointment took effect (which was on filing) would be a matter of "supreme irrelevance".

Accordingly, it would seem that the matter of the requirement of Rule 3.24(1)(j) to include the date and time of appointment in the notice of appointment can now be put to rest. No specific wording is needed. The court will always (as per Rule 3.26) endorse the date and time of filing on the filed notice of appointment, so Nugee J considered Rule 3.24(1)(j) to be "otiose". It was better to interpret the rule as otiose, than to impose some "meaningless" requirement which would serve no useful purpose. It is only from the date and time that the notice is filed that the appointment takes effect, so the date and time of any prior act is irrelevant.

Helpfully, Nugee J approved of the best practice that has developed of saying in the notice that the appointment will take effect at the date and time the notice is filed with the court (as endorsed by it on the form). But, even if the notice said nothing, he was clear that it would not be a failure to comply with the rules or mean that the appointment of the administrators was invalid.