Glint Pay Ltd & Ors v Baker & Anor

An administrator’s appointment in breach of paragraph 16 of Schedule B1 to the Insolvency Act 1986 is void. There are consequently no insolvency proceedings and no liability arising from acts as an administrator for paragraph 98 of Schedule B1 to discharge.

A purported administrator may nevertheless be examined under paragraph 75, but that summary remedy is unavailable to the company itself once the administration has ended and the company is solvent. A court order fixing the discharge date does not automatically exclude claims notified or issued before that date. Interested parties must apply for variation or extension before discharge takes effect.

The applicants, three companies formerly in administration, sought to pursue claims valued at approximately £21.4 million against their former joint administrators. The administrators had obtained orders under paragraph 98 of Schedule B1 to the Insolvency Act 1986, discharging them from liability with effect from 25 December 2019.

The applicants alleged primarily that the administrators’ appointments were invalid because the appointing floating charge was unenforceable and the appointments breached paragraph 16 of Schedule B1. They also sought to rely, alternatively, on claims arising from valid appointments. The central issues were whether paragraph 98 applied, whether paragraph 75 or paragraph 74 preserved the claims, and whether the discharge orders should be varied or extended.

1. Invalid appointments. A breach of paragraph 16 of Schedule B1 is fundamental. A purported appointment is void. If there was no appointment, there were no Schedule B1 insolvency proceedings and paragraph 98 had nothing to discharge.
2. Paragraph 75. Paragraph 75 covers a person who is or purports to be an administrator and provides a summary remedy for misapplication of property, accounting obligations, breach of fiduciary or other duty, and misfeasance. However, paragraph 75(2) does not include the company as an applicant. The remedy is an insolvency process remedy available to office-holders and persons interested in the insolvency. It was unavailable to these companies after the administrations had ended and while they traded as solvent companies.
3. Paragraph 74. Paragraph 74 concerns ongoing regulation of an administration, rather than claims imposing liability on administrators. It was therefore irrelevant to the applications.
4. Effect of the discharge orders. The period between the making of a paragraph 98 order and its effective date ordinarily allows interested parties to object before the court. It does not create an automatic or implied exclusion for claims notified or issued during that period. Such an exclusion must be expressly provided in the order. The court retains an unfettered discretion to delay discharge or exclude a liability where appropriate, balancing legitimate objections against the former administrator’s protection from unfair and indefinite risk.
5. Jurisdiction and pleadings. The orders carried an implied permission to apply for variation or extension before discharge took effect. Rule 12.59 of the Insolvency (England and Wales) Rules 2016 did not apply to these applications. The claim form was broad enough to identify possible claims based on valid appointments, but the draft Particulars of Claim pleaded claims founded on invalid appointments and did not clearly formulate an alternative valid-appointment case.
6. The applications were therefore otiose. No claim was identified for which the discharge orders were necessary or relevant.

First-instance decision. No prior appellate decision is stated in the judgment.