Woodside & Anor v Keyworker Homes (North West) Ltd

For the purposes of paragraph 28(2) of Schedule B1 to the Insolvency Act 1986, the period of ten business days begins on the day on which the notice of intention to appoint is filed and provides ten full business days for making the appointment. A notice filed electronically by a company or its directors outside court opening hours may be valid where electronic filing is permitted by the applicable practice directions. Paragraph 8.1 of the Insolvency Practice Direction must be read as preserving the special out-of-hours regime for qualifying floating charge holders, while permitting electronic filing in other cases. An obvious drafting mistake in a practice direction may be corrected where the intended purpose, drafting error and necessary correction are clear.

Joint administrators applied for declarations concerning the validity and timing of their appointment. A notice of intention to appoint was electronically filed at 16.29 on 11 October 2019. The notice of appointment was electronically filed at 18.00 on 24 October, but the court office endorsed it as filed at 10.00 on 25 October.

The application raised the construction of paragraph 28(2) of Schedule B1 to the Insolvency Act 1986, and the interaction between the Insolvency Rules 2016, the Insolvency Practice Direction and Electronic Practice Direction 51O. The central issues were whether the ten-business-day period included the filing day and whether directors could file electronically outside court opening hours.

1. Ten-business-day period. The court held that paragraph 28(2) of Schedule B1 to the Insolvency Act 1986 gives ten full business days beginning with the date on which the notice of intention is filed. Filing on Friday 11 October meant that Friday 25 October was the tenth business day. The appointment was therefore within time.
2. Electronic filing by directors. A notice of intention may be filed electronically outside court office hours. Except for appointments by qualifying floating charge holders, rules 3.20 to 3.22 of the Insolvency (England and Wales) Rules 2016 do not govern the filing of a notice of appointment by a company or its directors. Rule 1.46 permits electronic delivery where authorised by a practice direction, and Electronic Practice Direction 51O supplied that authority.
3. Construction of paragraph 8.1. Paragraph 8.1 of the Insolvency Practice Direction contained an obvious drafting error. Its second sentence was to be read as applying only to notices filed by qualifying floating charge holders. That construction reconciled the paragraph with paragraph 2.1 of Electronic Practice Direction 51O and the mandatory use of Electronic Working. The approach was justified by the principles in Inco Europe Ltd v First Choice Distribution (A Firm) [2000] 1 WLR 586.
4. The notice of appointment filed at 18.00 on 24 October was valid and took effect then. The court ordered correction of the court endorsement, declared the appointment valid, transferred the case to the Manchester Business and Property Courts, and ordered that the applicants’ costs be payable as an expense of the administration.