Insolvency Oracle

Developments in UK insolvency by Michelle Butler

Court decides on solution for misfiled SoA schedules

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I don’t usually write on legal decisions anymore, but I felt that this was such a good news story, I would make an exception.

I have seen many an IP look ashen and frustrated at learning that the employee or consumer creditor schedules have been sent to Companies House for filing along with a Statement of Affairs (“SoA”).  It’s a very easy mistake to make, but it can be costly.  Not only is it a data breach, but over the past few years, the Registrar seems to have hardened his stance and no longer agrees to whip out the offending schedules but instead refers the IP to the expense of getting a court order for their removal.

In the recent case of Re Peter Jones (China) Limited ([2021] EWHC 215 (Ch)) (https://www.bailii.org/ew/cases/EWHC/Ch/2021/215.html), HH Judge Davis-White QC gave his view on the matter.

In this case, the IP was quick to spot the error, so just a few days after the SoA containing the employee/consumer schedules had been emailed for filing, he emailed the Registrar asking for the filing to be cancelled.  Unfortunately, although the Registrar had confirmed that the SoA had been returned in the post, there was a mix up and the SoA-plus-schedules were filed.

The Registrar told the IP that he would need a rectification court order to remove the schedules.

 

Employee/consumer schedules were “unnecessary material”

The court decided that the schedules were “unnecessary material” under S1074 of the Companies Act 2006 (“CA06”):

(2) “Unnecessary material” means material that—

(a) is not necessary in order to comply with an obligation under any enactment, and

(b) is not specifically authorised to be delivered to the registrar.

This section also gives the Registrar discretion to choose not to file the unnecessary material.  If the unnecessary material cannot readily be separated, then the Registrar can reject the whole document submitted.  But if it can readily be separated, then S1074 allows the Registrar to remove just this item.  Of course, this is handy when employee/consumer schedules are mistakenly submitted with SoAs.

S1094 CA06 also gives the Registrar discretion to remove such unnecessary material from documents already filed.

 

Should the Registrar have used his discretion to remove the schedules?

The court said: yes.

The judge pointed out that:

“If the IR 2016 prohibit delivery of the Schedules to the Registrar it is difficult to see how it could be lawful for him to register them.”

Therefore, the Registrar’s refusal to exercise that discretion was considered “unlawful and irrational within the Wednesbury principles”.

The force of the judge’s decision perhaps is felt in the fact that the judge ordered that the Registrar pay the costs of the IP’s application:

“Having found that the Registrar had a discretion which he should have exercised to remove the Schedules or not to register them in the first place, I ordered that he should pay the costs of the application. His repeated position in correspondence that a court order was necessary was simply wrong.”

 

Will the Registrar use his discretion in future?

Let’s hope so!

The Registrar was not represented at this application, except by written submission on the question of costs.  I suppose an appeal is possible, but I would think unlikely.

Author: insolvencyoracle

In working life, I am a partner of the Compliance Alliance, providing compliance services to insolvency practitioners in the UK. In my blogging life, I remain pretty-much Insolvency Oracle, set up after leaving the IPA in 2012 on becoming free to express my personal opinions in public.

One thought on “Court decides on solution for misfiled SoA schedules

  1. Thanks for sharing this Michelle; it does seem that the RoC is being dragged kicking and screaming into the modern world! One of the team said the other day that filing stuff electronically takes longer to get on the file than doing it manually!

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