West End Quay Estate Management Ltd , Re

Where the purpose of an administration cannot be achieved, the administrator must apply to bring it to an end. If the company is insolvent and unable to pay its debts, the court may then make appropriate provision for the company, including winding it up without a petition where the circumstances justify that course. Former administrators may be appointed as liquidators where their knowledge offers material savings of time and cost, provided conflicts are recognised and managed. An application to discharge administrators from liability may be adjourned separately.

The joint administrators of West End Quay Estate Management Ltd applied under paragraph 79 of Schedule B1 to the Insolvency Act 1986 to end the administration, wind up the company and appoint themselves as joint liquidators under section 140. The administration was due to expire, its purpose could not be achieved, and there were insufficient funds to meet its continuing costs. Creditors had been notified. An application to discharge the administrators from liability was opposed and was separated for later determination.

1. The purpose of the administration could not be achieved. The administrators were therefore under a statutory obligation to apply to bring the administration to an end under paragraph 79(2)(a) of Schedule B1 to the Insolvency Act 1986.
2. The company was plainly insolvent and unable to pay its debts, including recent costs orders. It would not be appropriate to return it to the control of its directors. The court could therefore wind it up on bringing the administration to an end, notwithstanding that no winding-up petition had been presented. The jurisdiction was explained in Graico Property Company Limited (In Administration) [2016] EWHC 2827 (Ch), drawing on Lancefield v Lancefield [2002] BPIR 1108.
3. The former administrators were suitable liquidators. Their familiarity with the company and its complex affairs would save time and costs. They were well advised and would identify and address any conflict arising from their former and new offices.
4. The administration was discharged, the company was wound up, and the former administrators were appointed liquidators. The application concerning discharge from liability was adjourned generally, with permission to restore on 21 days' written notice. The costs of the application were treated as an expense of the administration.