Insolvency Act 1986, section 232

Validity of office-holder’s acts

Part VI Miscellaneous Provisions Applying to Companies Which are Insolvent or in Liquidation

F486The acts of an individual as . . . administrative receiver, liquidator or provisional liquidator of a company are valid notwithstanding any defect in his appointment, nomination or qualifications.

Definitions used in section 232 1

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

Cases considering section 232 6

OBG Limited and others (Appellants) v. Allan and others (Respondents) Douglas and another and others (Appellants) v. Hello! Limited and others (Respondents) Mainstream Properties Limited (Appellants) v. Young and others and another (Respondents)

[2007] UKHL 21 · 2 May 2007Interprets

Lord Hoffmann doubted, without deciding, that validation of an office-holder’s acts despite a defect in appointment applied where there was no colour of authority for the appointment. The provision did not establish causation because the liquidator independently joined the settlement.

Andrew Bland & Anor v JDK Construction Limited (in liquidation) & Anor

[2023] EWHC 2805 (Ch) · 13 October 2023Limits

The court interpreted section 232 as incapable of validating acts where no valid resolution commenced the creditors’ voluntary liquidation and the purported appointment was a nullity. It also held that the provision could not validate acts performed after the appointment defect had been identified. (see paras [36]-[37]; [43]; [46]-[47])

Strategic Advantage SPC v Rutter & Ors (Rev 1)

[2020] EWHC 3171 (Ch) · 14 October 2020

Section 232 supports the general legislative intention that defects in an administrator’s appointment should not necessarily invalidate acts undertaken. Its relevance depends on whether the appointment is curably defective rather than a nullity (see paras [27(c)], [50]).

What each judgment says about section 232 is in the case-law panel in the full Act.

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F486Word in s. 232 repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 21, Sch. 26 (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

Modifications

  1. C745Ss. 231-232 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)
  2. C746S. 232 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2
  3. C747S. 232 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2
  4. C748S. 232 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)