Walker & Anor v National Westminster Bank Plc & Anor

A provisional redress assessment under an agreed regulatory scheme does not create a presently enforceable debt or asset where no offer has been made or accepted. It is therefore not property subject to the former administrator’s statutory charge under paragraph 99 of Schedule B1 to the Insolvency Act 1986.

A statutory charge gives security and enforcement rights, not ownership or power to deal directly with the charged property. Questions concerning restoration, pursuit of claims, compromise and distribution should be addressed through the statutory insolvency procedures, ordinarily by a liquidator or court-appointed receiver.

The claimants were former administrators of a dissolved company. They sought an order requiring NatWest to pay them directly a provisional interest-rate-swap redress sum of £62,646.06. They relied on the statutory charge arising under paragraph 99 of Schedule B1 to the Insolvency Act 1986.

The company’s assets had vested in the Crown as bona vacantia on dissolution. NatWest and the Treasury Solicitor contended that the company should first be restored and wound up, allowing a liquidator to pursue and distribute any redress. The issues included whether the provisional redress was presently payable, whether it was subject to the statutory charge, and whether the former administrators or the court could bypass the insolvency process.

1. Application dismissed. The bank was not presently obliged to pay the anticipated redress. Its letter was provisional, was not an offer capable of acceptance, and contemplated restoration of the company before any binding offer would arise.
2. The FCA review scheme was distinct from enforcing a contractual or tortious claim. Even if the company had an enforceable right under the scheme, no entitlement to the assessed sum had yet arisen. The anticipated payment was therefore not an asset subject to the paragraph 99 charge.
3. A charge under paragraph 99 did not vest ownership of charged property in the former administrators. Even treating it as analogous to an equitable mortgage, the administrators could not pursue a company claim or compromise it without an appropriate court remedy. Buchler v Talbot did not support any wider right. Re MK Airlines Ltd and Re Hotel Company 42 The Calls Ltd supported enforcement through the court, including appointment of a receiver or an order for sale.
4. Any rights existing at dissolution which might produce redress would vest in the Crown as bona vacantia under section 1012 of the Companies Act 2006. The Crown could require restoration before those rights were exercised. The court could not direct the Treasury Solicitor to use them for the benefit of a particular creditor, save through judicial review of the relevant discretion.
5. Even if direct payment jurisdiction existed, it would be inappropriate. Potential issues included compromise of the administrators’ remuneration, the interests of unsecured creditors under the prescribed part, and whether later redress derived from an asset within the charge. Those matters required consideration by an office-holder able to represent the company and affected creditors.