MF Global Overseas Ltd

Where directors appoint administrators and serve a notice of intention to appoint in Form 2.8B, the subsequent notice may properly be given in Form 2.9B even if the earlier Form 2.8B was unnecessary. The form should be construed sensibly so that administrators may adopt a cautious course in the face of uncertainty about the notice requirements. Serving Form 2.8B followed by Form 2.9B communicates, in substance, the relevant information contained in Form 2.10B and does not undermine the policy of the Insolvency Rules. The court may declare that the feared defect does not invalidate the appointment, while declining to grant a broad declaration that the appointment is valid against every possible challenge.

The administrators of MF Global Overseas Ltd and MF Global Finance Europe Ltd applied for declarations concerning the validity of their appointments. The directors had resolved to appoint administrators and had served Form 2.8B notices of intention to appoint, followed by Form 2.9B notices of appointment. No floating charge holder or other person requiring notice under paragraph 26(1) was involved.

The issue arose from conflicting first-instance authorities on whether Form 2.8B had to be served on the company and, if it did not, whether the later notice should instead have been in Form 2.10B. The central question was whether the use of Form 2.9B after an unnecessary but actually served Form 2.8B invalidated the appointments.

1. The application was allowed to the limited extent necessary to determine the particular alleged defect. The court declined to make a broad declaration that the administrators’ appointments were valid against every conceivable challenge.

2. Under paragraph 22(2) of Schedule B1 to the Insolvency Act, the directors could appoint administrators. Paragraph 26 and rule 2.20 raised the question whether a Form 2.8B notice of intention to appoint had to be served. The authorities were divided between Hill v Stokes, [2011] BCC 473 and Virtualpurple Professional Services Ltd, [2011] EWHC 3487 (Ch), on one side, and Minmar (929) Ltd v Khalatschi, [2011] BCC 485 and National Westminster Bank plc v Msaada Group, [2011] EWHC 3423 (Ch), on the other. It was unnecessary to choose between those lines.

3. If Form 2.8B was unnecessary, its actual service nevertheless satisfied the condition in the heading to Form 2.9B, which applied where a notice of intention to appoint had been issued. The word “issued” was construed as meaning served. The condition was read literally so as to include an unnecessary but actually served Form 2.8B.

4. This construction was supported by the structure and policy of the forms. The information in paragraphs 5, 6 and 9 of Form 2.10B was supplied by paragraphs 3, 4 and 7 of the Form 2.8B and the Form 2.9B documents taken together. Treating Form 2.9B as available in these circumstances allowed a sensible and safer course without undermining the scheme.

5. An alternative submission, based on looking to substance rather than merely applying mandatory and directory labels, was unnecessary to decide. The court referred to R v Soneji, [2006] 1 AC 340, but did not determine whether that approach could independently validate the appointment.

6. The appointments were not invalidated by the use of Form 2.9B rather than Form 2.10B.