Edwards & Anor v SJ Henderson & Company Ltd (Rev 1)

Paragraph 8.1 of the Insolvency Practice Direction prevents a company or its directors from appointing an administrator by e-filing a notice of appointment outside court opening hours. The exceptional out-of-hours appointment procedure remains available only to a qualifying floating charge holder under the Insolvency (England and Wales) Rules 2016. An appointment made by company directors outside those hours cannot be treated as a merely procedural defect or validated by extending time under the CPR. It takes effect when the court opens for business. By contrast, a notice of intention to appoint an administrator may be e-filed outside court hours and takes effect when filed, subject to acceptance under the electronic working scheme.

Two urgent applications concerned the validity and timing of administrator appointments. The administrators of S.J. Henderson & Company Limited had e-filed a notice of appointment at 6.03am, before the London court counter opened. The administrators of Triumph Furniture Limited had e-filed at 9.29am, before the court opened at 10am. Both applicants sought declarations validating their appointments and, alternatively, relief for procedural defects or retrospective appointment. The central issue was the proper interpretation of paragraph 8.1 of the Insolvency Practice Direction and its interaction with the electronic working scheme and the insolvency rules.

1. The court construed paragraph 8.1 of the Insolvency Practice Direction by reference to the Insolvency Act 1986 and the Insolvency (England and Wales) Rules 2016. Those provisions expressly provide an out-of-hours filing route for qualifying floating charge holders, but do not confer the same exceptional power on companies or their directors.

2. The electronic working scheme could not, without clear legislative authority, create a power for a company or its directors to appoint an administrator outside court opening hours. Such an interpretation would be inconsistent with the insolvency rules and would extend an onerous statutory power which had previously been confined to qualifying floating charge holders.

3. The court declined to follow Wright v HMV Ecommerce Ltd [2019] EWHC 903 (Ch), where the filing was treated as producing an appointment subject to a curable procedural defect. In the present case, an out-of-hours appointment by directors could not be made at all until the court opened. CPR rule 3.1.2(a) could not properly be used notionally to extend the filing time.

4. For S.J. Henderson, the appointment could not take effect at 6.03am or 9.42am, but could take effect when the London court counter opened at 10am on 1 November 2018. The court directed further submissions concerning the effect of the ten-business-day limit in paragraph 28(2) of Schedule B1 and any acts undertaken before 10am.

5. For Triumph Furniture, the appointment took effect at 10am on 8 October 2019. Further submissions were invited concerning any acts taken during the preceding 31 minutes.

6. A notice of intention to appoint an administrator is materially different. It may be e-filed by any party outside court hours. If accepted under the electronic working scheme, it takes effect at the time and date of filing.