Rhino Enterprises Properties Ltd & Anor, Re

Rhino Enterprises Properties Ltd & Anor, Re

It is at least realistically arguable, and probably correct, that a CVA is not a contract for the purposes of the 1999 Act, that clause 24.1 is not enforceable by the former administrators, and that the applicants as contributories are not precluded from seeking permission to bring a misfeasance claim under paragraph 75. The application meets the threshold for permission and the discretion should be exercised in favour of granting permission.

Parties
Applicant: Robert Nicholas Jason Schofield; Applicant: Rhino Enterprises Holdings Limited; Respondent: Matthew David Smith; Respondent: Clare Boardman
Jurisdiction
England and Wales
Judgment Date
03 September 2020
Procedural Posture
Insolvency Application (permission to Bring Misfeasance Claim) / Ruling on Application for Permission Under Paragraph 75 of Schedule B1 to the Insolvency Act 1986
Outcome
Permission granted
Legal Topics
Company Voluntary Arrangements (cva), Misfeasance, Fiduciary Duties, Third Party Rights, Statutory Interpretation
Insolvency Law Company Law Company Voluntary Arrangements (cva) Misfeasance Fiduciary Duties Third Party Rights Statutory Interpretation

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Parties

Robert Nicholas Jason Schofield

Applicant

Rhino Enterprises Holdings Limited

Applicant

Matthew David Smith

Respondent

Clare Boardman

Respondent

Procedural Posture

Insolvency Application (permission to Bring Misfeasance Claim) / Ruling on Application for Permission Under Paragraph 75 of Schedule B1 to the Insolvency Act 1986

Legal Issues

  1. 1 Whether a CVA is a contract for the purposes of the Contract (Rights of Third Parties) Act 1999
  2. 2 Whether clause 24.1 of the CVA is enforceable by the former administrators as a release
  3. 3 Whether applicants as contributories can bring a claim under paragraph 75 despite voting for the CVA

Ratio Decidendi

It is at least realistically arguable, and probably correct, that a CVA is not a contract for the purposes of the 1999 Act, that clause 24.1 is not enforceable by the former administrators, and that the applicants as contributories are not precluded from seeking permission to bring a misfeasance claim under paragraph 75. The application meets the threshold for permission and the discretion should be exercised in favour of granting permission.

Court Disposition

Permission granted

Orders

  • Permission is granted to the applicants under paragraph 75(6) of Schedule B1 to the Insolvency Act 1986 to bring a claim against the former administrators.