Causer & Anor v All Star Leisure (Group) Ltd

The Insolvency Rules 2016 do not create an exclusive code preventing the CPR or a practice direction from authorising an alternative method of electronic filing. Rule 3.20 is permissive, not mandatory. Although the applicable practice direction excluded out-of-hours CE File filing of notices of appointment, filing through CE File contrary to that restriction was an irregularity rather than a fundamental defect. Under rule 12.64, the court could cure the irregularity where no substantial injustice had been caused. The appointment therefore took effect when the documents were received by the court through CE File.

The applicants sought confirmation of the validity of the appointment of administrators to the parent company of a group operating bowling alleys. A qualifying floating charge holder filed the notice and supporting documents through CE File at 4.18 pm, after the published counter closing time of 4 pm. The documents were later electronically sealed, but the filing was purportedly rejected by a court clerk.

The issue was whether the filing was effective, given the interaction between the Insolvency Act 1986, the Insolvency Rules 2016, CPR Practice Direction 51O and the Practice Direction—Insolvency Proceedings.

1. Construction of the filing regime. The Insolvency Act 1986 does not define the circumstances in which a document is filed with the court or restrict filing to particular hours. Those matters are governed by the court rules and practice directions.
2. Rule 3.20 was non-exclusive. Rule 3.20 permitted a qualifying floating charge holder to file by fax or email when the court was closed. Its use of “may”, rather than “must”, did not prevent the CPR or a practice direction from authorising another electronic filing method. Such authorisation would not override the Insolvency Rules; it would operate within the permission given by rule 1.46.
3. The court nevertheless had to apply the existing wording. The carve-out in CPR PD 51O meant that CE File was prima facie unavailable for a notice of appointment when the Birmingham court counter was closed. “Closed” could not be construed away by treating the electronic system’s ability to receive documents as meaning that the court was open.
4. Curative order. Filing through CE File outside the permitted hours was an irregularity, not a fundamental defect. Applying the approach in Re Skeggs Beef Ltd and Re Wright, the court found no substantial injustice and made an order under rule 12.64 curing the defect.
5. The appointment was treated as taking effect at 4.18 pm on 17 September 2019. The judge respectfully differed from the construction adopted in Re Skeggs Beef Ltd concerning the competence of the CPR and practice directions to provide alternative out-of-hours filing facilities. He also preferred Re Wright to the contrary conclusion in Re SJ Henderson & Co Ltd, although the latter issue did not arise for decision.