Bezier Acquisitions Ltd, Re

Failure to deliver a notice of intention to appoint administrators to a company’s registered office does not necessarily invalidate the appointment. The Insolvency Rules must be read as a whole. Service may be effective through a solicitor authorised to receive the notice on the company’s behalf. Independently, the statutory service requirement is not an absolute condition precedent where the directors validly resolved to enter administration and authorised an agent to receive and deal with the relevant documents. The question is whether Parliament intended total invalidity to follow from the non-compliance, assessed in its statutory and factual context.

Bezier was facing enforcement by the holder of a qualifying floating charge and pursued a pre-pack administration. Its directors resolved to appoint administrators, signed the required notices and authorised Linklaters, the company’s solicitors, to deal with the appointment and receive relevant documents. The notice of intention was delivered to Linklaters but not to Bezier’s registered office.

The directors applied for a declaration that the administrators had nevertheless been validly appointed. The central issue was whether the prescribed method of service was exhaustive and, if not, whether the failure to serve at the registered office invalidated the appointment.

1. Application granted. The administrators were validly appointed, and the court approved the draft order identified as Option 1.
2. Paragraph 26 of Schedule B1 to the Insolvency Act 1986 and Insolvency Rule 2.20 required notice of intention to appoint administrators to be given to the company in the circumstances. The cross-reference to the service provisions in Rule 2.8 did not create a complete and exhaustive code.
3. Read with Rules 12A.5 and 13.4, the Rules permitted delivery to a solicitor authorised to accept delivery or service for the company. Linklaters had been retained to act for Bezier in all aspects of the restructuring and the administrators’ appointment. Delivery of the notice to Linklaters, and their retention of it, therefore constituted sufficient service.
4. There was an independent basis for the conclusion. The court followed and applied Re Regent United Service Stores, whose underlying principle remained good law. Applying the approach in R v Soneji, the court focused on the consequences of non-compliance and whether Parliament could fairly be taken to have intended total invalidity.
5. In the circumstances, the directors had validly resolved that Bezier should enter administration and had appointed an agent authorised to receive and deal with the relevant documents. Parliament had not intended that failure to deliver the notice to the registered office should invalidate the appointment where the company had received full and complete information through its authorised solicitors.
6. The alternative arguments concerning the effect of paragraph 29, retrospective appointment, relief under paragraph 104 and agency for the sale were not decided. The costs of the application were to be treated as an expense of the administration.