In the matter of Property Professionals & Ltd

Under paragraph 83 of Schedule B1 to the Insolvency Act 1986, an administration may convert into a creditors’ voluntary liquidation when the prescribed notice is sent and received before the administrator’s appointment expires, even though registration occurs later. Registration is the event which effects the conversion, but the administration is impliedly extended until registration to secure a seamless transition. A notice sent before expiry may also be sufficient where receipt occurs later. A registrar must register a properly completed notice and should not reject it merely because the liquidators’ addresses are not repeated where those details already appear elsewhere on the form.

HSBC Merchant Services LLP, a creditor of Property Professionals + Limited, applied to determine whether the company had been validly converted from administration into creditors’ voluntary liquidation and whether the subsequent appointment of replacement joint liquidators was effective. The company’s administrators sent Form 2.34B shortly before their one-year appointment expired. The Registrar rejected the first form because the liquidators’ addresses were not repeated in the relevant section, but later registered a corrected form. The central issues concerned the expiry of the administrators’ appointment, the effect of sending, receipt and registration of the notice, and the validity of the later replacement appointments.

1. Conversion on registration. The court followed Re Globespan Airways Ltd [2013] 1 WLR 1122, holding that paragraph 83(6) of Schedule B1 operates on registration of the notice. On registration, the administrators’ appointment ceases and the company is wound up as if a resolution for voluntary winding up had been passed on that day.
2. Duration of the administration. Applying the reasoning of Arden LJ in Re Globespan Airways Ltd concerning the calculation of the one-year period under paragraph 76, the administrators’ appointment expired immediately before the corresponding time one year after appointment. That reasoning was described as technically obiter in Re Globespan Airways Ltd, but was accepted as highly persuasive.
3. Effect of sending the notice. The court held, alternatively, that sending the completed Form 2.34B before expiry was sufficient, even if receipt occurred after expiry. This followed Re E Squared Ltd [2006] 2 BCLC 277, which had been approved in Re Globespan Airways Ltd. The reasoning in Re Globespan Airways Ltd also supported an implied extension of the administration until registration.
4. Registrar’s rejection and subsequent appointments. The Registrar had been under a statutory obligation to register the first form because the necessary information was already present. The later registration was therefore treated as fulfilling that obligation. The company was in liquidation when the creditors appointed replacement liquidators, so that appointment was valid.
5. The compulsory winding-up petition was withdrawn because the voluntary liquidation was effective.