Chancery Division
Published June 4, 2012
Cartwright and Another v Registrar of Companies
Before Mr Justice Briggs
Judgment February 24, 2012
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Where a company moved from administration to creditors’ voluntary liquidation registration by the Registrar of Companies of a notice sent by the administrator in the prescribed form took effect on the date of receipt of the notice.
Mr Justice Briggs so held in the Chancery Division, on an application by John Bruce Cartwright and Ian Christopher Oakley Smith, the former administrators of Globespan Airways Ltd, as to the interpretation and application of paragraph 83 of Schedule B1 to the Insolvency Act 1986. The respondent was the Registrar of Companies.
Mr Adam Goodison for the applicants; Ms Laura D’Cruz for the registrar.
HIS LORDSHIP said that the question thrown up by the unusual facts which underlay the present application was whether, in circumstances where a notice under paragraph 83 of Schedule B1 was both sent to and received by the registrar before the termination of the relevant administration, but the administrative steps to bring about that registration occurred only after the end of the administration, a gap thereby arose between administration and liquidation, with the unfortunate disapplication of important provisions in the 1986 Act and the Insolvency Rules 1986 (SI 1986 No 1925) as amended by the Insolvency (Amendment) Rules 2010 (SI 2010 No 686).
In the present case his Lordship had been asked to decide the “gap problem” left unresolved by In re E Squared Ltd ([2006] 1 WLR 3414). The interpretation which his Lordship preferred, was that regardless of when the administrative steps necessary for registration were completed, paragraph 83(4) should be read as requiring registration with effect from the day of receipt, so that the phrases in paragraph 83(6) “on the registration of a notice” and “on the day on which the notice is registered” were treated as references to the effective date of registration, that was, the date of receipt of the notice.
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The primary purpose, and in particular the intention that the transition should be gapless, was discernible not merely, or even mainly, from the language of paragraph 83 itself, but from the language of the provisions in the 1986 Act which provided for special consequences to flow from a liquidation which was immediately (i.e. gaplessly) preceded by an administration.
That interpretation gave full effect to Parliament’s intention that registration should take effect on receipt of a paragraph 83 notice by the registrar.
It involved treating the registration of the notice as taking effect a little earlier than the evidence of it first becoming available for public inspection.
Thereafter, it afforded to any inspecting member of the public a precise record of the date when, in accordance with Parliament’s intention, the company’s voluntary liquidation had commenced.
Solicitors: Dundas & Wilson LLP; Treasury Solicitor.