Gould & Anor v Itmo Advent Computer Training Ltd & Anor

Insolvency notices and documents may be sent by e-mail where the governing provision requires them to be sent but does not prescribe a particular medium, provided the electronic address is known and delivery is sufficiently reliable. A decision refusing e-mail communication on its particular evidence does not establish a general prohibition. The court may also vary the period for providing prescribed matters under Schedule B1 so that the extension relates to some matters only, where this preserves confidentiality without preventing creditors from considering the administrators’ proposals.

The joint administrators of two companies providing educational services sought directions concerning communications with approximately 14,000 student creditors, whose customer information formed a substantial part of the businesses’ value. They sought permission to send notices of appointment, administrators’ proposals and progress reports by e-mail, and to defer disclosure of student creditor details while attempts were made to sell the businesses.

The application concerned Schedule B1 to the Insolvency Act 1986 and the Insolvency Rules 1986, including the requirements for sending notices and proposals and the court’s powers concerning limited disclosure and time extensions.

1. E-mail notices. The application was granted in substance. Paragraph 46(3) of Schedule B1 required a notice of appointment to be sent to each known creditor but did not prescribe post or any other particular method. An e-mail sent to a known contractual e-mail address was capable of satisfying that requirement.
2. Rules and service provisions. Rule 12.4 treated an electronically communicated written notice as being in writing. Rule 12.4(2) provided a permissive method of proving posting and did not exhaust the possible methods of sending. Rule 12.11 applied CPR Part 6 to service and the giving of notice in insolvency proceedings. That provided a supporting analogy for e-mail communication where the recipient had indicated willingness to receive communications electronically.
3. Re Sporting Options plc. Mann J’s decision, reported at [2005] BCC 88, was based on evidence that e-mails had failed and that their effectiveness was uncertain. It did not establish a general rule excluding e-mail. The present evidence was materially different, particularly because the students had supplied e-mail addresses for contractual communications. Further directions could be sought if a significant number of messages were returned.
4. Proposals and reports. The same reasoning applied to paragraph 49 of Schedule B1 and Rule 2.47(4). Administrators could send proposals and progress reports by e-mail to known addresses, with attachments, website access and inspection arrangements. E-mails sent before 4.30 p.m. were treated as served that day; those sent later were treated as served the following day.
5. Deferred disclosure. The court did not finally decide whether Rule 2.33 could itself authorise withholding sensitive creditor details. It held that paragraphs 49(8) and 107 of Schedule B1 empowered the court to vary the period for prescribed matters selectively. The period for disclosing student creditor details under Rule 2.33(2)(h) and (j) was extended to 30 April 2010, with permission to apply. Costs were payable as an expense of the administrations.