Insolvency Act 1986, Schedule B1, paragraph 81

SCHEDULE B1 ADMINISTRATION

81(1)On the application of a creditor of a company the court may provide for the appointment of an administrator of the company to cease to have effect at a specified time.

(2)An application under this paragraph must allege an improper motive—

(a)in the case of an administrator appointed by administration order, on the part of the applicant for the order, or

(b)in any other case, on the part of the person who appointed the administrator.

(3)On an application under this paragraph the court may—

(a)adjourn the hearing conditionally or unconditionally;

(b)dismiss the application;

(c)make an interim order;

(d)make any order it thinks appropriate (whether in addition to, in consequence of or instead of the order applied for).

Definitions used in Schedule B1, paragraph 81 3

the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act
company

(1A) In this Schedule, “company” means—

(a)a company registered under the Companies Act 2006 in England and Wales or Scotland,

(b)a company incorporated in an EEA State ..., or

(c)a company not incorporated in an EEA State but having its centre of main interests in a member State (other than Denmark) or in the United Kingdom .

Defined in Sch.B1 para.111(1A) · see it in the full Act
administrator

1 (1) For the purposes of this Act “administrator” of a company means a person appointed under this Schedule to manage the company’s affairs, business and property.

Defined in Sch.B1 para.1(1) · see it in the full Act

“administrator” has the meaning given by paragraph 1 and, where the context requires, includes a reference to a former administrator,

Defined in Sch.B1 para.111(1) · see it in the full Act

Cases considering Schedule B1, paragraph 81 14

Glint Pay Ltd & Ors v Jason Daniel Baker & Anor

[2026] EWCA Civ 1023 · 31 July 2026Limits

The court held that the creditor remedy for improper motive under paragraph 81, and the court's broad discretionary powers, do not preclude a company from seeking to establish that an appointment was ineffective from the outset for sole improper purpose. (see paras [86]-[90])

Sophie Perhar v Louise Freestone & Ors

[2025] EWHC 3284 (Ch) · 17 December 2025Interprets

The court interprets paragraph 81 as involving a gateway and a discretionary stage. An improper-motive allegation must be made honestly and on reasonable grounds to open the gateway; the court must then weigh proof of motive and all relevant circumstances when deciding relief (see paras [131]-[150]).

Peter Wilkinson v Gavin Maher & Ors

[2024] EWHC 2948 (Ch) · 29 November 2024Defines

The court accepted that paragraph 81 requires an allegation of improper motive and confers a broad discretion. Following Aatree, it proceeded on the basis that the applicant need not first prove improper motive as a threshold condition, but dismissed the application because the allegation lacked reasonable grounds and administration’s statutory purpose was likely to be achieved. (see paras [87]-[90]; [236]-[254]) The court treated paragraph 81(2) as requiring the applicant to allege an improper motive by the person who appointed the administrator. The pleaded allegation was unsupported and was not made on reasonable grounds. (see paras [88]; [239]-[242]) The court recognised the broad remedial discretion under paragraph 81(3), but concluded that no order should be made because the alleged improper motive was unsupported and the statutory purpose of administration had a real prospect of being achieved. (see paras [88]; [236]-[254])

What each judgment says about Schedule B1, paragraph 81 is in the case-law panel in the full Act.

Amendments and notes

1 notes from legislation.gov.uk

Modifications

  1. C1457Sch. B1 para. 81 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)