Insolvency Act 1986, section 234

Getting in the company’s property

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

(1)This section applies in the case of a company where—

[F510 (a)the company enters administration,F510]

(b)an administrative receiver is appointed, or

(c)the company goes into liquidation, or

(d)a provisional liquidator is appointed;

and “the office-holder” means the administrator, the administrative receiver, the liquidator or the provisional liquidator, as the case may be.

(2)Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the court may require that person forthwith (or within such period as the court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office-holder.

(3)Where the office-holder—

(a)seizes or disposes of any property which is not property of the company, and

(b)at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,

the next subsection has effect.

(4)In that case the office-holder—

(a)is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the office-holder’s own negligence, and

(b)has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.

Definitions used in section 234 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
enters administration

(b) a company “enters administration” when the appointment of an administrator takes effect,

Defined in Sch.B1 para.1(2) · 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

Cases considering section 234 33

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 2007Limits

The majority used the specific protection for a non-negligent administrative receiver who seizes or disposes of property not belonging to the company as part of the statutory context against extending conversion generally to intangible rights. Lord Nicholls and Baroness Hale considered that the protection could encompass contractual rights.

Official Receiver (Appellant) v. Wadge Rapps & Hunt (a firm) and another and two other actions

[2003] UKHL 49 · 31 July 2003Defines

The provision defines an office-holder as the administrator, administrative receiver, liquidator or provisional liquidator. Its present-tense language indicates that the relevant investigatory powers assist persons while they remain in office.

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

[2001] UKHL 58 · 8 November 2001Interprets

The section provides a summary and discretionary remedy enabling an office-holder to obtain property, books or records needed to perform statutory functions. It is not confined to final determinations of title and is not the exclusive procedure through which an administrator may rely on an avoided charge (see paras [25]-[28]; [32]).

13 more judgments, and what each says about section 234, are in the case-law panel in the full Act.

Amendments and notes

11 notes from legislation.gov.uk

Amendments

  1. F510S. 234(1)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 23 (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. C753Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)
  2. C754Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)
  3. C756Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)
  4. C763S. 234 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(3), Sch. 3 Pt. II para. 9
  5. C764S. 234 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2 (as amended (1.10.2009) by S.S.I. 2009/310, reg. 3, Sch. 1 para. 1(a))
  6. C765S. 234 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
  7. C766S. 234 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3
  8. C767S. 234 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)
  9. C768S. 234 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 2 paras. 4-6 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)
  10. C769S. 234 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)