Wessely & Anor (Zoom UK Distribution Ltd) v Rubra & Ors [2021] EWHC 800 (Ch) (31 March 2021)

Wessely & Anor (Zoom UK Distribution Ltd) v Rubra & Ors [2021] EWHC 800 (Ch) (31 March 2021)

Failure to give notice under paragraph 26(1)(b) of Schedule B1 is a procedural defect, not a fundamental breach; the appointment of administrators is valid and acts performed are valid; costs arising from the defect are to be borne by the directors, not the administration.

Citation
[2021] EWHC 800 (Ch)
Parties
Applicant: Francis Wessely; Applicant: Joann Louise Leach; Respondent: Stephen Rubra; Respondent: Anthony Bekesi; Respondent: Zoom UK Distribution Ltd (in administration)
Jurisdiction
England and Wales
Judgment Date
31 March 2021
Procedural Posture
Insolvency Application / Judgment on Directions and Costs
Outcome
Directions Application granted; appointment and acts of administrators declared valid; costs orders against directors; permission to appeal costs refused.
Legal Topics
Administrator Appointment Validity, Procedural Defects, Costs Orders
Insolvency Company Law Administrator Appointment Validity Procedural Defects Costs Orders

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Parties

Francis Wessely

Applicant

Joann Louise Leach

Applicant

Stephen Rubra

Respondent

Anthony Bekesi

Respondent

Zoom UK Distribution Ltd (in administration)

Respondent

Procedural Posture

Insolvency Application / Judgment on Directions and Costs

Legal Issues

  1. 1 Does failure to give notice to a qualifying floating charge holder under paragraph 26(1)(b) of Schedule B1 render the appointment of administrators void or merely defective?
  2. 2 Are acts of administrators valid despite procedural defects in appointment?
  3. 3 Who should bear the costs of applications arising from procedural defects in administrator appointment?

Ratio Decidendi

Failure to give notice under paragraph 26(1)(b) of Schedule B1 is a procedural defect, not a fundamental breach; the appointment of administrators is valid and acts performed are valid; costs arising from the defect are to be borne by the directors, not the administration.

Court Disposition

Directions Application granted; appointment and acts of administrators declared valid; costs orders against directors; permission to appeal costs refused.

Orders

  • Declaration that administrators' appointment on 5 May 2020 is valid.
  • Declaration that acts of administrators since 5 May 2020 are valid.