Globespan Airways Ltd

The Court of Appeal interpreted paragraph 83 of Schedule B1 to the Insolvency Act 1986 and held that a conversion notice given by an administrator converts an administration into a creditors' voluntary liquidation only when the registrar of companies has registered that notice. The court treated registration, not mere delivery or receipt, as the conversion date for the purposes of paragraph 83(6). The court also held that, if an administrator's term of office would otherwise expire after filing a valid conversion notice but before registration, the administrator’s term is in general extended until registration so as to preserve a seamless transition.

The decision turned on the natural meaning of the different terms used in paragraph 83 (in particular "send", "receipt" and "registration"), the statutory purpose of publicity and accuracy of the register maintained by the registrar, and practical considerations about routine checking and short registration intervals. The court therefore allowed the appeal from Briggs J and ordered that the registrar’s records be amended to reflect the actual date of registration of the conversion notice in the present case.

Background and parties:

• The appeal concerns Globespan Airways Ltd, placed into administration on 17 December 2009. The administrators signed and sent a conversion notice in December 2010 seeking to convert the administration into a creditors' voluntary liquidation under paragraph 83 of Schedule B1 to the Insolvency Act 1986. The registrar rejected the initial filing for a formality and ultimately registered a later conversion notice on 4 February 2011. Briggs J at first instance held that conversion occurred on sending/receipt of the first conversion notice (14 December 2010). The registrar appealed.

(i) Nature of the application:

• The registrar appealed the judge’s decision; the parties asked the Court of Appeal to determine whether conversion from administration to a CVL takes effect on the administrator's filing/sending of the conversion notice or only on the registrar's registration of the notice. The court was also asked to decide whether an administrator's term of office is extended between filing and registration if it would otherwise expire.

(ii) Issues framed by the court:

• Primary issue: whether paragraph 83 creates a conversion trigger on delivery/receipt or on registration by the registrar.
• Subsidiary issue: whether, where an administrator's appointment would otherwise expire between filing and registration, the administrator's term is automatically extended until registration.

(iii) Court’s reasoning and outcome:

• The court concluded that paragraph 83(4) and (6) should be read so that registration by the registrar is the operative event that effects conversion. The court relied on the distinct natural meanings of "receipt" and "registration", the statutory purpose of publicity and accuracy of the Companies House register, the registrar's public law duties (including the need to check information before registration), and the short practical interval normally required for registration. These considerations supported treating registration as the conversion date rather than mere delivery.
• To avoid undermining the streamlined conversion procedure and to preserve continuity of control and the availability of retrospective-date provisions, the court held that an administrator’s term of office will, in general, be impliedly extended from its natural expiry until the registration date where a valid conversion notice has been filed while the administrator was still in office; that implied extension is subject to termination events such as death, resignation or removal.
• Applying these conclusions, the Court of Appeal held that the true conversion date for Globespan was 4 February 2011 (the date of registration) and that the administrators’ term of office was extended until that date. The registrar’s records were to be amended accordingly.

Procedural posture:

• Appeal from Briggs J, High Court of Justice (Chancery Division), [2012] EWHC 359 (Ch).

Wider context:

• The court emphasised the importance of publicity, accuracy and public confidence in the Companies House register and the role of registration in protecting third parties and ensuring orderly transitions between insolvency procedures. The ruling preserves the registrar’s role in checking and publishing key corporate events and ensures certainty for practitioners about the conversion date and the application of retrospective-date provisions.

The appeal was allowed. The court held that under paragraph 83 of Schedule B1 to the Insolvency Act 1986 a conversion notice takes effect only on registration by the registrar, not on mere delivery or receipt, and that where an administrator would otherwise cease to hold office after filing a valid conversion notice, the administrator’s term of office is in general extended until registration so as to preserve a seamless transition into a creditors' voluntary liquidation. The conversion date in this case was therefore 4 February 2011 and the registrar’s records were to be amended accordingly.

Appeal from the High Court of Justice (Chancery Division), Briggs J, [2012] EWHC 359 (Ch); Court of Appeal judgment [2012] EWCA Civ 1159.