Dairy Farmers of Britain Ltd, Re

An industrial and provident society is not a “company” for the purposes of Part III of the Insolvency Act 1986 unless the statutory context clearly requires that meaning. The separate statutory regime governing such societies, together with the unavailability of administration under Part II, strongly indicates that section 72A does not prohibit a qualifying floating-charge holder from appointing receivers over the society’s property. The same interpretation applies to sections 29(2), 38 and 37. Receivers appointed over an industrial and provident society therefore are not administrative receivers, and section 37 does not impose personal contractual liability on them.

Dairy Farmers of Britain Ltd was an industrial and provident society registered under the Industrial and Provident Societies Act 1965. HSBC and HSBC Invoice Finance (UK) Ltd held qualifying floating charges over its property. Following financial difficulties, the society’s directors invited the applicants to appoint receivers and managers.

The applicants sought declarations that Part III of the Insolvency Act 1986, including the prohibition in section 72A, did not apply. The central issue was whether an industrial and provident society was a “company” for the purposes of Part III.

1. The court granted the declarations sought. Part III of the Insolvency Act 1986 did not apply to the proposed appointment of receivers and managers over the society’s property. Section 72A therefore did not prohibit the appointments.

2. The statutory definition of “company” in the Companies Acts gives the term its ordinary statutory meaning: a company formed and registered under those Acts, subject to a contrary intention appearing from the context. No such contrary intention appeared in Part III.

3. The statutory scheme supported that conclusion. Industrial and provident societies operated under a separate legislative and regulatory regime, including distinct provisions on floating charges, receivers and reporting to the Financial Services Authority. The absence of any available administration procedure for such societies made it particularly implausible that Parliament intended section 72A to prevent receivership without providing the alternative insolvency process which the section was designed to favour.

4. In re Devon & Somerset Farmers Ltd was correctly decided: section 40 did not apply to a registered industrial and provident society. Its reasoning also supported the conclusion that sections 38 and 72A did not apply.

5. In re International Bulk Commodities Ltd was distinguishable. It concerned receivers of a foreign company and did not address the separate statutory regime for industrial and provident societies. Any wider observations about “unregistered companies” were unnecessary to that decision.

6. Because the society was not a “company” for Part III, the proposed receivers were not “administrative receivers” under section 29(2). Section 37, including its reference to liabilities incurred by a receiver or manager, likewise applied only to receivers of a company’s property and did not apply.