Mark Guy Boughey & Anor v Toogood International Transport and Agricultural Services Ltd (in administration)

For the purposes of Schedule B1 to the Insolvency Act 1986, a secured creditor is a creditor whose secured debt remains outstanding. A creditor whose debt has been paid in full is no longer a secured creditor, even if the security was held when the administration began. Its consent is therefore not required for a decision requiring the consent of secured creditors. Primary legislation prevails over any inconsistent procedural rule or administrative guidance. An administration may be extended where its purposes remain achievable, the proposed extension is supported by the creditor with the remaining economic interest, and liquidation would produce a worse result for creditors.

The administrators of Toogood International Transport and Agricultural Services Ltd applied for a further extension of the administration to 20 June 2026. They also sought declarations or retrospective relief concerning an earlier consensual extension obtained in 2023.

The administrators had obtained consent from HSBC UK Bank plc but had not sought consent from HSBC Bank plc or HSBC Invoice Finance (UK) Ltd. The latter creditors had been paid in full or had transferred their relevant position. The central issues were whether those former secured creditors remained entitled to consent to the earlier extension and whether a further court-ordered extension was justified.

1. Earlier consensual extension. The June 2023 extension was valid. Section 248 of the Insolvency Act 1986 defines a secured creditor as a creditor who holds security over company property. The definition is expressed in the present tense. A creditor whose debt has been paid in full is no longer a creditor and therefore no longer a secured creditor for Schedule B1 purposes.
2. The qualification permitting the statutory context to require a different construction did not apply. Schedule B1 contained nothing requiring the status of a fully paid creditor to be fixed permanently at the date of entry into administration. Rule 15.11 of the Insolvency (England and Wales) Rules 2016 did not alter that conclusion. In any event, secondary legislation could not displace the definition in primary legislation.
3. The court respectfully agreed with the reasoning in Re Pindar Scarborough Ltd. The practical rationale also supported the construction: only creditors with an economic interest in the administration should participate in decisions about its continuation. A bank whose debt had been paid in full suffered no prejudice from not being asked for consent.
4. Further extension. A further 24-month extension was appropriate. Important asset recoveries, investigation of directors’ loan accounts and inter-company balances, a tax refund claim, and distributions to preferential creditors remained outstanding. Immediate liquidation would incur substantial additional costs and was less likely to produce the best result for creditors. The only secured creditor with an economic interest consented to the extension.
5. The administration and the administrators’ appointments were extended to 4 pm on 20 June 2026.

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