Insolvency Act 1986, section 8

Administration

Part II Administration

Schedule B1 to this Act (which makes provision about the administration of companies) shall have effect.F112]

Definitions used in section 8 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 8 29

Lune Metal Products Ltd v Getliffe & Ors

[2006] EWCA Civ 1720 · 14 December 2006Disapplies

Sets the statutory circumstances in which an administration order may be made. The judgment uses it as the framework for identifying the limits of administration purposes. (see [11]; [17]-[20]) Defines the four purposes for which an administration order may be made. The proposed distribution fell outside each purpose because it concerned distribution of realised assets rather than realisation. (see [11]; [17]-[20]) The survival purpose did not apply because the company or its undertaking was not to continue as a going concern. (see [17]) The CVA purpose did not apply because the proposed distribution was intended to avoid making payments under a CVA. (see [17]) The compromise or arrangement purpose did not apply because section 425 of the Companies Act 1985 was not in point. (see [17]) The more advantageous realisation purpose concerns realising company assets, not distributing the proceeds after realisation. The proposed payments therefore fell outside this purpose. (see [17]-[20]; [32]-[33])

Oldham & Ors v Kyrris & Anor

[2003] EWCA Civ 1506 · 4 November 2003Defines

The administration order was made pursuant to section 8, as applied to partnerships by the Insolvent Partnerships Order 1994. (see para [11]) The court used section 8(2)’s definition of an administration order to identify that the administrator manages the enterprise’s affairs, business and property under court appointment. This supported the analogy with directors’ duties to the enterprise. (see para [144])

Cream Holdings Ltd. & Ors v Banerjee & Anor

[2003] EWCA Civ 103 · 13 February 2003Interprets

Section 8(1) was treated as establishing threshold conditions for administration orders before the court exercises its discretion. The discussion supported construing “likely” by reference to statutory function and context rather than a fixed balance-of-probabilities rule. (see paras [38]-[40]; [113]-[117]) Section 8(1)(a) was contrasted with paragraph (b): the court had to be satisfied of present or likely future insolvency, a context supporting the stricter meaning of “likely”. (see paras [39]-[40]; [116]) Section 8(1)(b) was treated as a threshold criterion preceding the court’s discretion. A real prospect that an administration purpose may be achieved could suffice, with the degree of likelihood then weighed in deciding whether to make the order. (see paras [39]-[40]; [113]-[117]) Section 8(3) supplied the statutory purposes whose possible achievement informed the meaning of “likely”. The court used the provision to support a real-prospect threshold followed by a discretionary evaluation of all circumstances. (see paras [38]-[40]; [113]-[117])

9 more judgments, and what each says about section 8, are in the case-law panel in the full Act.

Amendments and notes

1 notes from legislation.gov.uk

Amendments

  1. F112Pt. 2 (s. 8) substituted (15.9.2003) for Pt. 2 (ss. 8-27) by Enterprise Act 2002 (c. 40), ss. 248(1), 279 (with savings for special administration regimes in s. 249(1)-(3)(6) and further savings in S.I. 2003/2093, art. 3); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2)).