Bank of Ireland (UK) Plc v Colliers International UK Plc

A statutory requirement to obtain permission before commencing proceedings in an insolvency context does not ordinarily make proceedings issued without permission a nullity. The court must consider the provision’s context, purpose and practical consequences, rather than treating unqualified statutory language as decisive. The usual purpose of the insolvency moratorium is to place proceedings affecting the insolvent estate under the supervision and control of the insolvency court. That purpose is compatible with retrospective permission. Where the court has jurisdiction, permission remains discretionary and may be granted on appropriate terms.

The applicants had issued ten negligence claims against a company in administration after standstill agreements intended to preserve limitation had expired. They sought retrospective permission under paragraph 43(6) of Schedule B1 to the Insolvency Act 1986. The administrators did not oppose the application.

The central issue was whether the court had jurisdiction to grant retrospective permission for proceedings commenced without prior permission. The issue arose against conflicting first-instance authority, particularly Re Saunders and Re Taylor, and later consideration of the general approach in Seal v Chief Constable of South Wales Police and Adorian v Commissioner of Police of the Metropolis.

1. Jurisdiction. The court held that retrospective permission may be granted for proceedings commenced without prior permission under section 130(2) or section 285(3) of the Insolvency Act 1986, or under paragraph 43(6) of Schedule B1. Re Saunders was correctly decided; the contrary reasoning in Re Taylor was rejected.
2. Interpretive approach. The court must look beyond the statutory language to the provision’s context, purpose and consequences. A general predisposition exists against treating failure to comply with a procedural permission requirement as nullifying proceedings. The reasoning in Seal v Chief Constable of South Wales Police was context-specific and did not establish that similarly worded insolvency provisions produced the same result.
3. Purpose of insolvency provisions. The permission requirements apply to court-controlled bankruptcy, compulsory winding-up and administration, but not to a creditors’ voluntary winding-up. Their principal purpose is to ensure that proceedings affecting the insolvent estate remain under the supervision and control of the insolvency court. Retrospective permission is consistent with that purpose. An administrator may likewise give retrospective consent.
4. Discretion and order. This was a clear case for permission, having regard to the administrators’ position, the urgency created by limitation, the suitability of Part 7 proceedings rather than proof of debt, and the existence of professional indemnity insurance. Retrospective permission was granted, on terms that the applicants could not enforce any judgment against the company without further permission of the court.