Sky Building Ltd & Ors v HM Revenue and Customs & Ors

Sky Building Ltd & Ors v HM Revenue and Customs & Ors

The court refused to make an order under paragraph 71 because it was not satisfied, on the untested and inadequate valuation evidence, that the market value condition would be met, and it would not be right to exercise discretion to remove property rights of lien holders in these circumstances. The objections of the majority of affected creditors were given considerable weight.

Parties
Applicant: Sky Building Limited; Applicant: Craig Johns and Jason Elliott (as proposed Joint Administrators); Respondent: HM Revenue and Customs; Respondent: Sandra To and Others
Jurisdiction
England and Wales
Judgment Date
20 November 2020
Procedural Posture
Insolvency Application / Judgment on Application for Administration Order and Paragraph 71 Order
Outcome
Paragraph 71 order refused; administration order to be addressed in further submissions
Legal Topics
Administration Order, Paragraph 71 of Schedule B1 Insolvency Act 1986, Purchasers’ Liens, Secured Creditors’ Rights, Land Registration Act 2002, Distribution of Proceeds in Insolvency
Insolvency Property Law Administration Order Paragraph 71 of Schedule B1 Insolvency Act 1986 Purchasers’ Liens Secured Creditors’ Rights Land Registration Act 2002 Distribution of Proceeds in Insolvency

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Parties

Sky Building Limited

Applicant

Craig Johns and Jason Elliott (as proposed Joint Administrators)

Applicant

HM Revenue and Customs

Respondent

Sandra To and Others

Respondent

Procedural Posture

Insolvency Application / Judgment on Application for Administration Order and Paragraph 71 Order

Legal Issues

  1. 1 Whether an administration order should be made in respect of Sky Building Limited
  2. 2 Whether an order under paragraph 71 of Schedule B1 Insolvency Act 1986 should be made to allow sale free of purchasers’ liens
  3. 3 Whether the market value condition under paragraph 71(3)(b) is satisfied

Ratio Decidendi

The court refused to make an order under paragraph 71 because it was not satisfied, on the untested and inadequate valuation evidence, that the market value condition would be met, and it would not be right to exercise discretion to remove property rights of lien holders in these circumstances. The objections of the majority of affected creditors were given considerable weight.

Court Disposition

Paragraph 71 order refused; administration order to be addressed in further submissions

Orders

  • No order made under paragraph 71 of Schedule B1 Insolvency Act 1986
  • Further submissions to be heard on whether administration continues or is rescinded