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Wright v HMV Ecommerce Limited

This recent case concerned whether administrators were validly appointed following the directors filing a notice of appointment after the court office was closed, but using the electronic filing system, which allows parties to file documents at court around the clock.

Under the Insolvency Rules 2016, only a qualifying charge holder (“QFCH”) has the power to appoint an Administrator out of hours. E-filing is however 24/7, and can be used to issue insolvency proceedings.

There is some ambiguity between the Electronic Working Pilot Scheme (“EWP”) Practice Direction and the Practice Direction – Insolvency Proceedings (“PDIP”), as to whether e-filing of appointment documents is allowed out of hours.

Paragraph 2.1(c) of the EWP states that where a Notice of Appointment of an Administrator is being filed by a QFCH and the court is closed, the filing must be in accordance with R3.20. This requires the appointment to be made by fax or email. Paragraph 8.1 of the PDIP also deals with e-filing, and says that paragraph 2.1 of the EWP shall not apply to any filing of a Notice of Appointment of an Administrator outside court opening hours, and Rules 3.20 and 3.22 should apply. These only deal with appointments by QFCHs.

In this case, the court considered whether the electronic filing of a Notice of Appointment of Administrators by directors outside the court opening hours was valid.

The Judge said that the purpose of paragraph 8.1 of the PDIP was not immediately apparent. There is no evidence that it is intended to bring directors’ powers to appoint in line with those of a QFCH. He said that the provision was “procedural in nature” rather than restricting the power to appoint, and that there was no question of the appointment or any act of the Administrators being declared invalid. The meaning of paragraph 8.1 of the PDIP remains ambiguous.

This case was discussed in more detail in our recent CPD Tap webcast

Posted: 18.06.2019
Tags:  newsletter
 


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