Facts

A Trustee in Bankruptcy (‘TiB’) applied for committal of a bankrupt (‘B’) for contempt for repeated failure to provide financial information sought in conjunction with an application for an Income Payment Order (‘IPO’).

This case raised what is an often-discussed issue amongst insolvency practitioners and lawyers but one which, until now, has not been addressed fully by the courts, namely "does a company (or its director(s)) have to have a "settled intention" to appoint an administrator in order to file a Notice of Intention ("NOI") pursuant to paragraph 27 of Schedule B1 to the Insolvency Act 1986 ("Schedule B1")?".

A recent challenge in the High Court by liquidators to recover assets from a director of an insolvent company has highlighted various points of company law. In particular, the court had to consider directors' authority, share buybacks, and transactions between a company and its directors.

The claimant (D) was the managing director and controlling shareholder of the defendant company (the Company). The Company at first had one other director, D's wife, and later a second (W).

The liquidator challenged three transactions:

[Note: deemed consent cannot be used to decide on remuneration, or where the Act/Rules requires a decision by a decision procedure.]

The Deemed Consent procedure is set out in sections 246ZF (corporate insolvency) and 379ZB (personal insolvency) of the Insolvency Act 1986, as inserted by the Small Business, Enterprise and Employment Act 2015, and rule 15.7 of the Insolvency Rules 2016.

The deemed consent procedure is that relevant creditors/contributories are given notice:

This briefing note addresses the effect of the Insolvency Rules 2016 ("Rules") to the: (i) Electronic delivery of documents; and (ii) use of Websites to deliver documents.

Consolidation of the Rules

The Rules in relation to Electronic delivery of documents and use of websites have been applied as follows, namely:

The recent Court of Appeal case of JCAM Commercial Real Estate Property XV Limited v. Davis Haulage Limited [2017] EWCA Civ 267 has set out the importance of there being a settled intention to enter administration and indicated that this is a pre-requisite to an out of court appointment being validly made.

Speed Read:The recent decision of R v Neuberg serves to further entrench the distinction between the two classes of offences for determining benefit under the confiscation regime.Natasha Reurts provides an overview of the decision and assess the implications for corporate and financial crime cases that follow.

Case Summary

Background

1. Introduction

The Insolvency Rules 1986 have been revoked and the Insolvency (England and Wales) Rules 2016 (IR 2016) come into force today. There are 22 Parts and 11 Schedules. Each Part is intended to cover a specific process or area, for example:

The Insolvency Rules 2016 (the 2016 Rules) have effect from 6 April 2016. A key change introduced by the 2016 Rules is a new approach to decision making, including a deemed consent procedure. The new approach is designed to ease the administrative and cost burden in insolvency proceedings, and is summarised below.

Deemed consent

In the recent case of South Coast Construction v Iverson Road Limited [2017] EWHC 61 (TCC), South Coast Construction ("South Coast") had obtained an adjudicator’s decision against the employer, Iverson Road Limited (“Iverson Road”), in a sum approaching £900,000. Iverson Road refused to pay the award so South Coast commenced enforcement proceedings in the Technology and Construction Court (TCC).