Insolvency Act 1986, section 14

General powers

Part II Administration Orders

(1)The administrator of a company—

(a)may do all such things as may be necessary for the management of the affairs, business and property of the company, and

(b)without prejudice to the generality of paragraph (a), has the powers specified in Schedule 1 to this Act;

and in the application of that Schedule to the administrator of a company the words “he” and “him” refer to the administrator.

(2)The administrator also has power—

(a)to remove any director of the company and to appoint any person to be a director of it, whether to fill a vacancy or otherwise, and

(b)to call any meeting of the members or creditors of the company.

(3)The administrator may apply to the court for directions in relation to any particular matter arising in connection with the carrying out of his functions.

(4)Any power conferred on the company or its officers, whether by this Act or the Companies Act or by the memorandum or articles of association, which could be exercised in such a way as to interfere with the exercise by the administrator of his powers is not exercisable except with the consent of the administrator, which may be given either generally or in relation to particular cases.

(5)In exercising his powers the administrator is deemed to act as the company’s agent.

(6)A person dealing with the administrator in good faith and for value is not concerned to inquire whether the administrator is acting within his powers.

Definitions used in section 14 4

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
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
articles

“articles”, in relation to a company (see section 18 of the Companies Act 2006 );

Defined in s.436(2) · see it in the full Act
consent

(3) But where the administrator has made a statement under paragraph 52(1)(b) “consent” means—

(a) consent of each secured creditor of the company, or

(b) if the administrator thinks that a distribution may be made to preferential creditors, consent of—

(i) each secured creditor of the company, and

(ii) the preferential creditors of the company.

Defined in Sch.B1 para.108(3) · see it in the full Act

Cases considering section 14 17

R (on the application of Palmer) v Northern Derbyshire Magistrates’ Court and another

[2023] UKSC 38 · 1 November 2023

The former provision restricted the exercise of powers conferred on the company or its officers where they could interfere with the administrator’s powers. Its language distinguished the administrator from company officers (see para [25]).

Smith (Administrator of Cosslett (Contractors) Limited v. Bridgend County Borough Council

[2001] UKHL 58 · 8 November 2001

The provision gave the administrator powers over the company’s affairs and property without vesting the property in him. Those powers enabled the administrator to cause the company to pursue its conversion claim (see paras [29]-[32]). The subsection authorised the administrator to do what was necessary for management of the company’s affairs, business and property and conferred the powers in Schedule 1. It provided ample authority to cause the company to sue for conversion (see paras [29]-[32]).

Lune Metal Products Ltd v Getliffe & Ors

[2006] EWCA Civ 1720 · 14 December 2006Limits

Provides the general powers of administrators. The judgment confines those powers to management and the powers specified in Schedule 1. (see [13]; [32]-[33]) Confirms that an administrator may do what is necessary for management and has the Schedule 1 powers, but does not create a power of free-standing distribution. (see [13]; [27]; [33]) The management power does not extend to distributing realised assets where that distribution is outside the administration purposes. (see [13]; [27]) The power to use Schedule 1 powers does not itself authorise a free-standing distribution to creditors. (see [13]; [27]) Permits court directions only in connection with carrying out an administrator’s functions. It preserves a residual jurisdiction over the exercise of existing powers, but cannot authorise conduct wholly outside those powers. (see [21]; [32]-[37])

1 more judgment, and what each says about section 14, are in the case-law panel in the full Act.