Insolvency Act 1986, section 7

Implementation of proposal

Part I Company Voluntary Arrangements

(1)This section applies where a voluntary arrangement [F97has effect under section 4AF97] .

(2)The person who is for the time being carrying out in relation to the voluntary arrangement the functions conferred—

[F98 (a)on the nominee by virtue of the approval [F99 of the voluntary arrangement by the company or its creditors (or both) pursuant toF99] section 3F98] ,

(b)by virtue of section 2(4) or 4(2) on a person other than the nominee,

shall be known as the supervisor of the voluntary arrangement.

(3)If any of the company’s creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on the application the court may—

(a)confirm, reverse or modify any act or decision of the supervisor,

(b)give him directions, or

(c)make such other order as it thinks fit.

(4)The supervisor—

(a)may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement, and

(b)is included among the persons who may apply to the court for the winding up of the company or for an administration order to be made in relation to it.

(5)The court may, whenever—

(a)it is expedient to appoint a person to carry out the functions of the supervisor, and

(b)it is inexpedient, difficult or impracticable for an appointment to be made without the assistance of the court,

F100make an order appointing a person who is qualified to act as an insolvency practitioner ... [F101in relation to the voluntary arrangementF101] , either in substitution for the existing supervisor or to fill a vacancy.

(6)The power conferred by subsection (5) is exercisable so as to increase the number of persons exercising the functions of supervisor or, where there is more than one person exercising those functions, so as to replace one or more of those persons.

Definitions used in section 7 2

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

(4) In this Part “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 s.1(4) · see it in the full Act

Cases considering section 7 13

In re NT Gallagher & Son Ltd (Shierson v Tomlinson, NT Gallagher & Sons Ltd v Howard)

[2002] EWCA Civ 404 · 26 March 2002Limits

The subsection identifies the person performing the nominee’s functions after an arrangement takes effect as the supervisor. The court may give directions upon an application concerning a supervisor’s act or omission, but it cannot direct the supervisor to deal with trust money inconsistently with the arrangement. A supervisor may seek directions and apply for winding up or administration. The power to give directions does not permit judicial modification of the arrangement or inconsistent use of its trust assets.

London Resort Company Holdings Limited, Re

[2024] EWHC 3287 (Ch) · 19 December 2024Interprets

The court confirms that section 7(3) permits a dissatisfied creditor to challenge an act, omission or decision of a supervisor and gives the court broad supervisory powers. The Company’s cross-application failed because it did not identify a qualifying complaint or act of the supervisor. (see paras [22]-[24], [47]) The court confirms that only a supervisor may make an application under section 7(4). The Company therefore had no locus to seek relief under that subsection. (see para [47])

Gold Fields Mining Llc v Tucker & Anor

[2010] EWHC 788 (Ch) · 19 March 2010Defines

Confirms the statutory status of the respondents as CVA supervisors (see para [5]). Applies the provision permitting a dissatisfied creditor to seek directions concerning a supervisor’s act or omission. It supplied the statutory basis for Gold Fields’ application (see paras [5], [46]). Applies the provision as a possible statutory basis for directions concerning the manner in which the supervisors should adjudicate the claim (see para [46]).

What each judgment says about section 7 is in the case-law panel in the full Act.

Amendments and notes

8 notes from legislation.gov.uk

Amendments

  1. F97Words in s. 7(1) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 9(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)
  2. F98S. 7(2)(a) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 9(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)
  3. F99Words in s. 7(2)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 8; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)
  4. F100Words in s. 7(5) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 20(2)(d); S.I. 2015/1732, art. 2(e)(vi)
  5. F101Words in s. 7(5) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 9(c); S.I. 2002/2711, art. 2, (subject to transitional provisions in arts. 3-5)

Modifications

  1. C92Ss. 1-7B 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), 43-45 (with reg. 64)
  2. C107S. 7 amended (1.1.2003) by 2000 c. 8, s. 356(1) (as substituted (1.1.2003) by 2000 c. 39, s. 15(3)); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)
  3. C108S. 7 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))