Registrar of Companies v Swarbrick

The central issue was whether the court could direct the Registrar of Companies to accept amended administrators' proposals after the original proposals had been lawfully delivered and placed on the public register. The court considered paragraph 49 of Schedule B1 to the Insolvency Act 1986, Rules 2.33 and 2.33A of the Insolvency Rules 1986, and sections 1074 and 1076 (and related provisions) of the Companies Act 2006. It held that Rule 2.33A is capable of being used retrospectively and that an order properly made under that rule is binding on the Registrar once served. The judge also held that material excluded by a valid order under Rule 2.33A can become "unnecessary material" within section 1074 and that the Registrar may, and in appropriate cases should, remove or accept replacements under the statutory scheme (including section 1094 and section 1076). The application by the Registrar to set aside the Deputy Registrar’s order was dismissed. The judgment also criticised the use of a private hearing as unnecessary in this case and reiterated the strict approach to derogations from open justice.

Background and parties. The administrators of Gardenprime Limited sent to creditors and to the Registrar a statement of proposals under paragraph 49, Schedule B1, Insolvency Act 1986. A purchaser under a pre-pack sale asserted that certain material in the proposals breached contractual confidentiality (clause 7 of the share purchase agreement). The administrators applied to the court for an order allowing them to replace the filed proposals with redacted proposals acceptable to the purchaser; Deputy Registrar Garwood granted the order. The Registrar of Companies applied to set that order aside under the liberty to apply contained in it.

Nature of the application. The Registrar sought to set aside the Deputy Registrar’s order. The point of law concerned the extent to which the court may intervene in the Registrar’s statutory duties and powers, and the proper interpretation and interaction of Rule 2.33A IR 1986 with sections 1074, 1076 and related provisions of the Companies Act 2006.

Issues framed by the court. Key issues were (i) whether Rule 2.33A permits the court to limit disclosure of specified parts of a paragraph 49 statement after that statement has already been sent and placed on the register, (ii) whether excluded material thus becomes "unnecessary material" within section 1074 CA 2006 and so renders the document not properly delivered, and (iii) whether the court can require the Registrar to accept replacement proposals under section 1076 or otherwise compel the Registrar to remove material from the register consistent with public law and human rights obligations.

Court’s reasoning and subsidiary findings. The judge analysed Rule 2.33A as tightly focussed on specified matters in Rule 2.33(2)(h) and (j) but held it can be read so as to permit retrospective orders limiting disclosure; human rights considerations (notably Article 8) and the interpretative obligations in the Human Rights Act 1998 supported that construction. Once validly made and served, an order under Rule 2.33A binds the Registrar and the Registrar may comply without breaching statutory duties; where necessary the Registrar may annotate the register under the Companies Act. The judge construed "unnecessary material" in section 1074 objectively by reference to statute and accepted that material rendered unnecessary by a court order falls within section 1074; if it cannot readily be separated the document is treated as not meeting requirements for proper delivery and a replacement may be accepted under section 1076, subject to the Registrar being satisfied about proper delivery. The court reviewed authorities bearing on the limits of any inherent supervisory jurisdiction over the Registrar (including Re Calmex, Igroup, Exeter Trust and Re a Company (No. 007466 of 2003)) and concluded that, while the court has no general free-standing power to rectify valid filings, it does retain supervisory and public law jurisdiction to ensure compliance with Convention rights and to give effective relief in appropriate cases. The judge also held that the hearing before the Deputy Registrar should have been in public and that derogations from open justice are exceptional.

Disposition. The Registrar’s application to set aside the Deputy Registrar’s order was dismissed.

The application by the Registrar of Companies to set aside the Deputy Registrar’s order was dismissed. The court held that Rule 2.33A Insolvency Rules 1986 can be applied retrospectively and that a properly made order under that rule, when served on the Registrar, binds him; material excluded by such an order can fall within the meaning of "unnecessary material" under section 1074 Companies Act 2006 so that replacement proposals may be accepted under the statutory scheme (subject to the Registrar being satisfied as to proper delivery). The hearing should ordinarily have been in public and derogations from open justice are strictly confined.