Important new statutory interpretation decision in the Court of Appeal
27 Apr 2017
SETTLED AND FIXED INTENTION TO APPOINT ADMINISTRATOR IS NECESSARY FOR GIVING AND FILING NOTICE UNDER PARAGRAPHS 26 AND 27 OF SCHEDULE B1 TO THE INSOLVENCY ACT 1986
In an important new statutory interpretation decision, the Court of Appeal has made clear in JCAM Commercial Real Estate Property XV Limited v Davis Haulage Limited  EWCA Civ 267, that a conditional intention by a company or its directors to make an out of court appointment of an administrator is insufficient for the purposes of giving and filing notice of an intention to appoint under paragraphs 26 and 27 of Schedule B1 to the Insolvency Act 1986 and to trigger an interim moratorium on insolvency proceedings and other legal processes under paragraph 44(4) of the Schedule. Instead, it is necessary for the company or its directors to have a settled and fixed intention to appoint an administrator before being entitled or obliged to give and file notice under those paragraphs. The practice which has anecdotally developed over the past few years whereby companies and their directors have obtained an interim moratorium, sometimes for a prolonged period by filing several back-to back notices, in the absence of a settled and fixed intention (for example while exploring other rescue options such as a CVA) amounts to a technical abuse and is invalid.
Jonathan Lopian, instructed by Forsters LLP, represented the successful appellant in its appeal against the decision of HHJ Bird, who had refused its application to vacate and remove from the court file Davis Haulage Limited’s 4th notice of intention to appoint on the grounds that the word “proposes” in paragraph 26(1) of the Schedule might include a conditional intention to appoint.
A copy of the Court of Appeal’s judgment can be found here