The latest in the out-of-hours appointment debacle

This is one of a flurry of recent cases concerning the conflict between the Electronic Working Pilot Scheme (via the High Court’s CE-File system) and the Insolvency Rules. In this case the Court was called upon to determine the validity of the appointment of administrators made via electronic filing outside of the court’s normal opening hours.

Solicitors for the administrators were instructed to file notices of appointment so that a group of companies could be placed into administration to enable a pre-pack sale. The notices were successfully electronically filed at the Birmingham District Registry at 16:18, some 18 minutes after the court’s office closed, and the sale completed at 17:12 that same day.

Electronic filing enables the issuing of proceedings or filing of documents in existing proceedings 24 hours per day, every day, all year round. However, one exclusion to this, pursuant to the Practice Direction – Insolvency Proceedings (PDIP), is the filing of a notice of appointment of administrator by any person. 

Strictly speaking, the filing of the notice of appointment in this instance was invalid by applying the provisions of PDIP and the accompanying Insolvency Rules. However, Judge David Cooke found that no injustice had been caused by the “irregularity” and accordingly made an order curing the defect. The appointment was held to have taken effect at 16:18 on the day of filing. 

Although the Judge was content to cure the defect in this case, administrators should be wary of the potential conflict between the Electronic Working Pilot and the Insolvency Rules in order and the phlethora of current conflicting decisions on the point, to avoid questions about the validity of their appointment being questioned on technical grounds at a later date.

(1) Lee Causer (2) Neville Side v All Star Leisure (Group) Ltd (2019) [2019] EWHC 3231 (Ch)