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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> The People's Restaurant Group Ltd, Re [2012] EWHC B33 (Ch) (30 November 2012) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2012/B33.html Cite as: [2012] EWHC B33 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT

In The Matter Of THE PEOPLE'S RESTAURANT GROUP LIMITED
And
In The Matter Of THE COMPANIES ACT 1986 and THE INSOLVENCY ACT 1986

		7 Rolls Buildings Fetter Lane London EC4A 1NL
		30/11/2012

MR REGISTRAR JONES:

(A) The Petition

1. I have before me a petition ("the Petition") of RLoans LLP ("the Petitioner") presented to this court on 1 November 2012 praying for (amongst other relief):-

1.1 The restoration of The People's Restaurant Group Limited ("the Company") to the Register of Companies.

1.2 Its winding-up to take effect retrospectively from 24 June 2010.

1.3 The suspension of any limitation period between the date of its dissolution and the date of determination of the Petition for any causes of action the Company or its liquidator may have.

2. As to the date of winding-up, a winding-up by order of the Court will commence on the date of presentation of the petition (see section 129(2) of the Insolvency Act 1986 ("the Act")). The request for an earlier date is made in the following circumstances:-

2.1 On or around 20 October 2005 the Company purchased the "Little Chef" roadside restaurant business chain along with various property interests.

2.2 In March 2006 the Company sold and leased back to third parties several freehold and leasehold interests in respect of properties from which the "Little Chef" business traded.

2.3 On completion of the transaction a director and shareholder, Mr Wosskow, was repaid a loan of £4,921,658.47 from the purchase price.

2.4 On 3 January 2007 joint administrators were appointed by directors of the Company pursuant to paragraph 22 of Schedule B1 to the Act.

2.5 The Petitioner is the major creditor in value of the Company in a sum of just under £12 million resulting from various assignments of unpaid rent of leases guaranteed by the Company. It is also the principal creditor of various of the Company's subsidiary property companies by reason of assignments of claims of former landlords.

2.6 The Petitioner believes that the repayment of the loan of £4,921,658.47 is a preference (see section 239 of the Act).

2.7 On 17 June 2010 pursuant to paragraph 84(1) of Schedule B1 to the Act the joint administrators sent to the Registrar of Companies notice ("the Joint Administrators' Notice") that they thought the Company had no property which might permit a distribution to creditors.

2.8 On 24 June 2010 the Joint Administrators' Notice was registered by the Registrar in accordance with paragraph 84(3) of Schedule B1 to the Act and the wording used in paragraph 84(4) of Schedule B1 to the Act is that at that time the appointment of the joint administrators "shall cease to have effect".

2.9 On 24 September 2010 the Company was deemed to be dissolved pursuant to paragraph 84(6) of Schedule B1 to the Act.

2.10 If the Company is restored to the Register, it will be deemed to have continued in existence as if it had not been dissolved (see section 1032(1) of the Companies Act 2006).

2.11 Its liquidation upon this petition will commence on 1 November 2012 and there will be a gap of over 16 months since the registration of the Joint Administrators' Notice on 24 June 2010.

2.12 That gap will lead to a potential difficulty for the potential preference claim because of the expiry of statutory time limits unless the liquidation's commencement date is backdated to the day the appointment of the joint administrators ceased, namely 24 June 2010 if it ceased upon registration of the Joint Administrators' Notice.

B) Commencement of the Winding-Up and The Potential Preference Claim

3. Those circumstances have led to Mr Shaw, Counsel instructed on behalf of the Company, accepting for the purposes of this Petition only that any preference claim will be out of time should this Court make a winding up order on the petition presented on 1 November 2012 without giving further directions. That is because, as he acknowledges:

3.1. There are a number of statutory requirements to be satisfied before a preference can be established. One of those is that the repayment to the director as a connected person must have been made within 2 years ending with the onset of insolvency (see section 240(1)(a) of the Act).

3.2. Section 240(3)(d) of the Act provides (so far as relevant) that where a preference applies by reason of a liquidation commencing at the time when the appointment of an administrator ceases to have effect, the date of the onset of insolvency is the date the company entered administration.

3.3. In this case, however, if the commencement of the winding up is 1 November 2012, it will not commence at the time when the appointment of an administrator ceased to have effect, which was on 24 June 2010.

3.4. As a result, as set out in a skeleton argument by Mr Shaw and Mr Brown from which I quote:

"If a winding up order were made on the present petition then there would be no dovetailing of the cessation of the Administration and the entry into liquidation. There would be a gap of over 2 years. As such s.240(3)(d) would not apply and so the preference claim would not be capable of succeeding as the preference would not have been within a relevant time. For this reason an order is sought extending the Administration to today until a winding up order is made."

C) Submissions to Resolve The Problem

4. As is evident from the last sentence of that quotation, Mr Shaw accepts that he could not ask for the commencement date of the liquidation to be backdated as prayed for. In my judgment he is right to do so because it would produce a result contrary to the provisions of section 129(2) of the Act (see paragraph 2 above).
5. Instead he submits that statute (whether under the Companies Act 1986 and/or the Act) either extends the period of the administration in the circumstances summarised at paragraph 2 above or the Court has power to extend the period of the administration to the commencement of the winding-up with the result that section 240(3)(d) of the Act will apply. Although the exercise of such a power is not expressly prayed for in the Petition, it can be added by amendment. His written and oral submissions when combined may be summarised as follows:-

5.1 The normal date of the "onset of insolvency" for the purposes of a preference brought by a liquidator (see paragraph 3.1 above) is the date the liquidation commenced. However, if a company goes into liquidation "when the appointment of an administrator ceases to have effect", section 240(3)(d) of the Act provides that the date will be the date of the administration.

5.2 The purpose of that provision is to achieve a dove-tailing between the administration and the liquidation and that purpose should be given effect in these circumstances. Paragraph 84 of Schedule B1 to the Act should be construed accordingly or as providing a power for the Court to exercise to achieve that result.

5.3 As to construction, restoration does not stop at erasing the dissolution. It reaches back to set aside the event which led to the dissolution, in this case the cessation of the appointment of the joint administrators. This construction is consistent with the fact that the process of filing the notice under paragraph 84(7)(b) of Schedule B1, its registration and the subsequent automatic dissolution are all one process. If one element is "lost", the whole process is too.

5.4 If necessary effect can be given to this by the Court exercising its power to suspend the period of 3 months beginning with the date of registration of the notice and ending with dissolution pursuant to paragraph 84(7)(b) of Schedule B1. Upon its true construction the power of suspension extends to include the cessation of the appointment.

5.5 This construction of paragraph 84 of Schedule B1 to the Act is consistent with the approach taken by the Court of Appeal in the unreported decision of Globespan Airways (formerly in Administration now in Liquidation) [2012] EWCA Civ 1159, (Times) 19 November 2012. That case was concerned with the following matters and reached the following decision:

5.5.1 paragraph 83 of Schedule B1 to the Act applies when an administration moves directly to a creditors' voluntary liquidation by registration of an administrator's notice with the Registrar of Companies;

5.5.2 similar to paragraph 84 of Schedule B1 to the Act, the administrator gives a notice (in this case that paragraph 83 applies), the Registrar registers it and on registration the administrator's appointment ceases to have effect but in addition the company is deemed wound up on the day of registration as though a resolution for voluntary winding up had been passed under section 84 of the Act;

5.5.3 in that case before the Court of Appeal the one year period for which the administrator was appointed (see section 76(1) of the Act) ceased between the giving of the notice and its registration (the deemed date of voluntary liquidation) creating a 4 day gap;

5.5.4 on a natural meaning construction of paragraph 83 of Schedule B1 to the Act that meant that the retrospective date provisions of section 240(3)(d) of the Act would not apply because the liquidation did not commence "when the appointment of an administrator ceases to have effect";

5.5.5 however the Court of Appeal applied a purposive construction of paragraph 83 of Schedule B1 to the Act and held that the administrator's term of office is automatically extended until registration occurs if a paragraph 83 conversion notice is filed because the statutory intention is to create a seamless conversion from administration to liquidation when paragraph 83 of Schedule B1 to the Act applies;

5.5.6 therefore the appointment of an administrator will cease to have effect on the same day as the deemed voluntary liquidation if a notice of conversion has been served notwithstanding the expiry of the 1 year period before its registration even though paragraph 76(1) of Schedule B1 to the Act states that the appointment ceases when that terms expires.

5.6 A similar purposive approach should be adopted here when construing paragraph 84 of Schedule B1 to the Act.

5.7 Alternatively Section 1032(3) of the Companies Act 2006 confers power upon the Court to give directions that will ensure the company is placed in the same position as it would have been had it not been dissolved. Those powers should be exercised accordingly. To do so, the Court can and should extend the administration until the date of liquidation or suspend the operation of the limitation period between cessation of the joint administrators' appointment and the commencement of the liquidation (see In re Townreach Limited [1994] 3 WLR 983 at [43-45]).

5.8 Alternatively even if there is no express or implied legislative power as submitted above, the Court has a general function controlling the insolvency and in the exercise of that function may suspend a limitation period (see Donaldson v O'Sullivan [2009] 1 All ER 1087 per Lloyd LJ at [41]).

5.9 If necessary and as a final fallback, the Court can use Insolvency Rule 7.47(1) to vary by further extension the Order of the Leeds District Registry which extended the administration period to 2 July 2010 (see Re Roches Leisure Services Limited [2005] EWHC 3148 (Comm).

D) Mr Wosskow

6. Mr Wosskow has not been made a party to or given notice of this petition. That is the correct course insofar as the relief sought is limited to the restoration of the Company and its winding-up. However, it can be seen from Mr Shaw's submissions that at least part of the additional relief sought will prejudice Mr Wosskow's position by taking away a potential limitation defence if granted. This will obviously be the case should I decide to suspend the operation of the limitation period. It will also be the case, albeit more indirectly, should I decide to extend the period of the administration until the commencement of the winding-up.
7. In the case of Regent Leisuretime limited v NatWest Finance Limited [2003] EWCA Civ 391, [2003] B.C.C. 587 the Court of Appeal varied an order that restored a company to the register by deleting a direction that the relevant limitation period should not run between the date of dissolution and the date of restoration. It did so because third parties who will be prejudiced by a limitation direction are entitled to be heard in opposition to it. The party adversely affected by the direction had not received notice of the hearing.
8. This decision has caused Mr Shaw to accept that he cannot currently pursue the application for an order that will override a limitation period. This gives rise to the issue whether any relief other than restoration and winding-up should be given at this stage.
9. In response to that issue, Mr Shaw observes that there are problems of principle and practice: the problem of principle is whether any directions can be given for the administration after the winding up order is made; and the problem of practice that a liquidator needs to be appointed quickly because the 6 year limitation period starting with the date of the administration will expire in January 2013. I agree that it is not feasible to have an effective, opposed hearing before then taking into account Mr Wosskow's inherent right to have time to seek advice and prepare his case.
10. I will need to consider the problem of Mr Wosskow's absence when considering Mr Shaw's submissions upon the consequences of restoration. The logical course is to first consider whether the Company should be restored to the Register and then to address the consequences. Where a winding-up order is required, a restoration order should be made first.

E) Restoration to the Register

11. The Petitioner is clearly a creditor and as such has standing to apply for restoration under section 1029 of the Companies Act 2006. The section provides that one of the circumstances in which an application can be made is where a company is deemed to be dissolved under paragraph 84(6) of Schedule B1 to the Act. The petition has been served on the Registrar of Companies and on the Treasury Solicitor. Evidence has been filed proving such notice and that the Treasury Solicitor has stated that no objection is being taken by the Crown.
12. Section 1031 of the Companies Act sets out the powers of the Court upon hearing an application:

1031 Decision on application for restoration by the court

(1) On an application under section 1029 the court may order the restoration of the company to the register—

(a) if the company was struck off the register under section 1000 or 1001 (power of registrar to strike off defunct companies) and the company was, at the time of the striking off, carrying on business or in operation;

(b) if the company was struck off the register under section 1003 (voluntary striking off) and any of the requirements of sections 1004 to 1009 was not complied with;

(c) if in any other case the court considers it just to do so.

(2) If the court orders restoration of the company to the register, the restoration takes effect on a copy of the court's order being delivered to the registrar.

(3) The registrar must cause to be published in the Gazette notice of the restoration of the company to the register.

(4) The notice must state—

(a) the name of the company or, if the company is restored to the register under a different name (see section 1033), that name and its former name,

(b) the company's registered number, and

(c) the date on which the restoration took effect.

13. The Court's power to order restoration is plainly discretionary but in the absence of special circumstances restoration should normally follow. It is right to decide to restore the Company in the circumstances described under paragraph 2 above. There may be a potential claim of considerable value for the benefit of the creditors and a method of investigating that claim is advanced by not only seeking the winding-up order but also by identifying an insolvency practitioner willing to act as liquidator and carry out such investigations. In accordance with section 1031 of the Companies Act 2006 I find it just to do so.
14. In reaching that decision I have taken account of the delay and the potential for any preference claim to be out of time should the Court not accede to the submissions of Mr Shaw. However, it would not be right to refuse to exercise the discretion when there is room for argument based upon all of Mr Shaw's submissions. In any event there may be alternative claims, such as a claim of breach of duty within a misfeasance application under section 212 of the Act which provides wide compensatory remedies.
15. I will restore the Company to the Register. The dissolution is now deemed not to have occurred. Section 1032 of the Companies Act 2006 provides as follows (my underlining):

1032 Effect of court order for restoration to the register

(1) The general effect of an order by the court for restoration to the register is that the company is deemed to have continued in existence as if it had not been dissolved or struck off the register.

(2) The company is not liable to a penalty under section 453 or any corresponding earlier provision (civil penalty for failure to deliver accounts) for a financial year in relation to which the period for filing accounts and reports ended—

(a) after the date of dissolution or striking off, and

(b) before the restoration of the company to the register.

(3) The court may give such directions and make such provision as seems just for placing the company and all other persons in the same position (as nearly as may be) as if the company had not been dissolved or struck off the register.

(4) The court may also give directions as to—

(a) the delivery to the registrar of such documents relating to the company as are necessary to bring up to date the records kept by the registrar,

(b) the payment of the costs (in Scotland, expenses) of the registrar in connection with the proceedings for the restoration of the company to the register,

(c) where any property or right previously vested in or held on trust for the company has vested as bona vacantia, the payment of the costs (in Scotland, expenses) of the Crown representative—

(i) in dealing with the property during the period of dissolution, or

(ii) in connection with the proceedings on the application.

(5) In this section the "Crown representative" means—

(a) in relation to property vested in the Duchy of Lancaster, the Solicitor to that Duchy;

(b) in relation to property vested in the Duke of Cornwall, the Solicitor to the Duchy of Cornwall;

(c) in relation to property in Scotland, the Queen's and Lord Treasurer's Remembrancer;

(d) in relation to other property, the Treasury Solicitor.

16. It is clear that sub-section (1) (above) has created the fiction that the dissolution did not occur. However, what about the registration of the Joint Administrators' Notice and therefore the cessation of the appointment of the joint administrators? This is a question which introduces an overlap with Mr Shaw's submissions and returns to the issue of Mr Wosskow's absence (see paragraphs 6-10 above).

E) The Extent of the Submissions

17. The Petitioner might have decided to leave issues of construction to a future dispute with Mr Wosskow. The decision not to do so was made no doubt because of the problems identified in paragraph 9 above and the submissions of Mr Shaw made accordingly. His submissions have been limited to the construction and application of paragraph 84 of Schedule B1 to the Act and section 1032(3) of the Companies Act 1986. I will need to bear in mind the issue of Mr Wosskow's attendance whilst considering those submissions.
18. However, the point to be made here is that whilst Mr Shaw has used the purpose of section 240(3)(d) of the Act to advance his submissions upon the other two provisions, he has not sought to argue that upon a true construction of section 240(3)(d) of the Act (purposive or otherwise) its provisions apply even if the liquidation does not commence until 1 November 2012 in the circumstances described at paragraph 2 above. He has not addressed the Court, for example, upon the effect of that statutory provision of what might be described as "the limbo period" between the cessation of appointment upon registration of the Joint Administrators' Notice and the commencement of the liquidation.
19. Whilst this limit to the submissions is not wholly satisfactory, it flows from the problems identified at paragraph 9 above and the need to obtain restoration and a winding-up order.
20. For the avoidance of doubt I stress that I am not setting out any views on the merits or otherwise of potential arguments concerning the true construction of section 240(3)(d) of the Act (although the Petitioner will need to grapple with the approach to the 4 day gap accepted by the Court of Appeal in Globespan Airways (formerly in Administration now in Liquidation), see paragraph 5.5.4 above). It is not for me to do so in the absence of submissions. I draw attention to these matters to identify the limits of the submissions (which are in any event extensive) and to make clear that Mr Wosskow's attendance was not required to respond to such submissions, as it would otherwise have been. I also make clear that I will approach Mr Shaw's submissions upon the basis that the natural meaning of the words "when the appointment of an administrator ceases to have effect" applies. Similarly it is convenient to add at this stage for the avoidance of doubt that nothing in this judgment is to be construed as determining that there was or was not a preference. I therefore turn to paragraph 84(6) of Schedule B1 to the Act.

F) Paragraph 84 of Schedule B1 to the Act

21. The paragraph reads as follows (my underlining)

Moving from administration to dissolution

84

(1) If the administrator of a company thinks that the company has no property which might permit a distribution to its creditors, he shall send a notice to that effect to the registrar of companies.

(2) The court may on the application of the administrator of a company disapply sub-paragraph (1) in respect of the company.

(3) On receipt of a notice under sub-paragraph (1) the registrar shall register it.

(4) On the registration of a notice in respect of a company under sub-paragraph (1) the appointment of an administrator of the company shall cease to have effect.

(5) If an administrator sends a notice under sub-paragraph (1) he shall as soon as is reasonably practicable—

(a) file a copy of the notice with the court, and

(b) send a copy of the notice to each creditor of whose claim and address he is aware.

(6) At the end of the period of three months beginning with the date of registration of a notice in respect of a company under sub-paragraph (1) the company is deemed to be dissolved.

(7) On an application in respect of a company by the administrator or another interested person the court may—

(a) extend the period specified in sub-paragraph (6),

(b) suspend that period, or

(c) disapply sub-paragraph (6).

(8) Where an order is made under sub-paragraph (7) in respect of a company the administrator shall as soon as is reasonably practicable notify the registrar of companies.

(9) An administrator commits an offence if he fails without reasonable excuse to comply with subparagraph (5).

22. The answer to the question asked at paragraph 16 above depends upon the true meaning of paragraph 84 of Schedule B1 to the Act to be construed in the context of all of the relevant provisions concerning cessation of the appointment of an administrator. Those fall to be considered next.

G) Cessation of Administrators' Appointments

23. Schedule B1 to the Act was inserted by the Enterprise Act 2002 and provides within paragraphs 76-84 a variety of circumstances in which the appointment of the administrators will cease to have effect:

23.1 Automatically at the end of 1 year or such longer period by which the appointment has been extended either with the consent of (in summary) secured and on occasions also unsecured creditors for 6 months or by order of the Court upon the application of the administrator for such period as the Court decides (see paragraphs 76 -78 of Schedule B1).

23.2 Upon the expiry of a date provided by the Court upon an application of the administrator, which application shall be made if the administrator concludes that the purpose of the administration cannot be achieved or that the company should not have entered administration or if he is required to do so by a creditors' meeting (see paragraph 79 of Schedule B1).

23.3 Upon the administrator appointed out of Court (by a floating charge holder or by the company or its directors) filing a notice with the Registrar of Companies that the purpose of the administration has been sufficiently achieved (see paragraph 80 of Schedule B1).

23.4 Upon the expiry of a date provided by the Court upon an application of a creditor for the appointment to end which is based upon improper motive in connection with the appointment (see paragraph 81 of Schedule B1).

23.5 Upon an order for the winding-up of a company in administration on public interest grounds or pursuant to a petition for a Societas Europaea or by the Financial Services Authority under section 367 of the Financial Services and Markets Act 2000 when the Court orders the administration to cease (see paragraph 82 of Schedule B1).

23.6 Upon registration of the administrator's notice to the Registrar of Companies under paragraph 83 of Schedule B1 to convert an administration to a liquidation on the basis that the total amount which each secured creditor is likely to receive has been paid or set aside and that a distribution will be made to unsecured creditors (see paragraph 5.3.2 above).

23.7 Upon registration of the administrator's notice pursuant to paragraph 84 of Schedule B1, as in this case, when the company is to move from administration to dissolution.

24. In none of those cases is there an express power to extend the appointment after the event which has caused it to cease. On the other hand only for paragraph 76 of Schedule B1 to the Act is there an express prohibition preventing the court from extending time for the appointment after the expiry of the administrator's term of office (see paragraph 77(1)(b) of Schedule B1).
25. Whilst the application of paragraph 77(1)(b) is limited to paragraph 76 of Schedule B1 to the Act, it is of note that in the case of Re Frontsouth (Witham) Limited [2011] EWHC 1668 (Ch) [2012] 1 BCLC 818 Mr Justice Henderson has explained in the context of an out of court appointment that:

25.1 When the appointment ceases by effluxion of time or if there is a defect in the original appointment, there is no administration in existence.

25.2 As a result there are no "insolvency proceedings" which might otherwise be validated under Rule 7.55 of the Insolvency Rules 1986 even when this results from a defect or irregularity because it does not apply to fundamental defects of appointment.

25.3 To achieve an administration there will have to be a re-appointment by the court. The court will then have the power to backdate the appointment if appropriate pursuant to paragraph 13(2) of Schedule B1 to the Act and/or to extend the term of the appointment beyond a year pursuant to paragraph 76(2) of Schedule B1 to the Act. However, the backdating in order to achieve retrospective validation cannot be for more than 364 days because of the one year limit upon the period of validity under paragraph 76(1) of Schedule B1 to the Act.

26. Whilst that decision was not expressly referred to me, that was unnecessary; it is well known to those practising in this field and (of course) to this court. It is a significant decision for the purpose of answering the question at paragraph 16 above because it leads to the conclusion that when paragraph 84 of Schedule B1 to the Act prescribes that the appointment ceases upon registration of the notice, it means that there is no longer any administration in existence. The cessation is not dependent upon dissolution taking place.
27. It is true that it might be argued that this construction of paragraph 76 of Schedule B1 to the Act is influenced by the prohibition in paragraph 77 of Schedule B1 to the Act. However, the reality for construction is that you cannot get much clearer than "the appointment of an administrator ceases to have effect" and Mr Justice Henderson has identified the consequences of those words.
28. Indeed that conclusion is also apparent from sub-paragraph (7) of paragraph 84 of Schedule B1 to the Act which confers power to suspend or disapply the dissolution, as well as extend time before it occurs. The dissolution need not occur but the cessation will remain. There is no express, additional power to retrospectively extend the administration which has ceased. There is no provision for the administrator's appointment to be restored in the event of suspension or disapplication.
29. Mr Shaw submits to the contrary, arguing that paragraph 84 (7) of Schedule B1 to the Act provides an express power applicable to the cessation of the administration because the suspension or disapplication applies to "the period of three months beginning with the date of registration". He submits that this includes suspension or disapplication of the registration and therefore of the cessation of appointment. In my judgment it refers to the 3 months which commence as soon as there has been registration and therefore immediately after the cessation of appointment.
30. It may be argued instead that the conclusion that the administration ceases is incompatible with the fact that the administrator can make an application under paragraph 84 (7) of Schedule B1 to the Act. If an administrator can do so, the appointment cannot have ended is the argument. However, this has to be considered against the use of the clear wording in paragraph 84 (4) of Schedule B1 to the Act that the appointment "cease(s) to have effect", the same wording as used in paragraph 76 of Schedule B1 to the Act from which Mr Justice Henderson reached his conclusions (see paragraph 25 above).
31. In my judgment paragraph 84 (7) of Schedule B1 to the Act refers to the administrator as a descriptive term of convenience with it being otiose to insert the adjective "former". This construction is supported by the clear wording of paragraph 84 (4) of Schedule B1 to the Act and by the fact that the powers arising from such an application are limited to the dissolution and do not refer to the cessation of the administration. The former administrators cannot apply to be restored as administrators and it would require express wording to create such a right and consequential power for the Court.
32. Mr Shaw submits, as an alternative argument, that the power to extend is to be implied into paragraph 84 of Schedule B1 to the Act. He relies upon the fact that an extension has been implied in the circumstances of Globespan Airways (formerly in Administration now in Liquidation) [2012] EWCA Civ 1159 (see paragraph 5.3 above).
33. However, this arose from a purposive construction of paragraph 83(6) of Schedule B1 to the Act which cannot be applied to paragraph 84 of Schedule B1 to the Act. The obvious distinction between the two paragraphs is that the former exists for the specific purpose of ensuring that a liquidation will follow seamlessly after the cessation of the appointment, whereas the latter's purpose is to provide for dissolution in 3 months time. The same implication cannot be reached for the purpose of paragraph 84 of Schedule B1 to the Act.
34. In addition not only have neither the words to be implied nor their location in paragraph 84 of Schedule B1 to the Act been identified but also there is no "need" to imply such a term. First because paragraph 84 (7) of Schedule B1 to the Act does not require such a term in order to fulfil its natural and clear meaning. Second because the Act provides for an alternative course, namely the one identified in sub-paragraph 25.3 above albeit with a backdating time limit. Whether a court will grant a new administration order, backdate its commencement for the purposes of a preference claim and extend its period to ensure the liquidation sought will occur at the time when the appointment of the newly appointed administrator ceases to have effect is another matter. It is not a matter for me to decide, although the limit of 364 days appears a problem. It is not a remedy which is sought in this petition and in any event is not a remedy that a Registrar can grant. Applications for administration orders must be heard by the Judge (see The Practice Direction: Insolvency Proceedings 2012).
35. As a result, in my judgment based upon a true construction of the Act but without considering other statutory provisions, this petition must be approached from the basis that:

35.1 The result under paragraph 84 of Schedule B1 to the Act is that the appointment ceases upon registration of the notice and there is then normally a 3 month gap before dissolution.

35.2 That gap creates the opportunity for an application to extend, suspend or disapply the dissolution. Dissolution may not occur if a successful application is made under sub-paragraph (7)(b) or (c) of paragraph 84 of Schedule B1 to the Act. However, there is no provision for an application to restore the appointment of the administrator that has ceased.

35.3 In the event of restoration after dissolution, section 1032(1) of the Companies Act 2006 in effect disapplies the dissolution but it does not affect the fact that the appointment of the administrator ceased prior to dissolution.

35.4 In this case the Joint Administrators' Notice cannot be treated as though it never existed.

35.5 An application might be made for a new administrator to be appointed or for the re-appointment of the former administrators. Alternatively a winding-up order could be made. In this case, however, a liquidation is sought in circumstances of the administration having ceased more than 2 years before.

36. This does not end the matter, however, because Mr Shaw turns for support for his submission of the true construction of paragraph 84 of Schedule B1 to the Act to section 240(3)(d) of the Act.
37. Before I address his further submissions, I observe a practical difficulty that arises with Mr Shaw's submissions. If the administration continues, it raises the question of how a winding-up order can be made on this petition. No resolution may be passed and no compulsory order made whilst a company is in administration. Yet that is the relief the Petitioner seeks upon a petition which could not be presented insofar as it prays for a liquidation if the appointment of the Joint Administrators has indeed continued now the dissolution has not taken place (see paragraphs 40 and 42 of Schedule B1 to the Act).
38. There may be ways round this problem through termination of the administrators' appointment, although none have been identified; paragraph 79 of Schedule B1 to the Act presents an obvious possibility. However, this at least evidences the difficulties Mr Shaw's submissions face. Paragraph 84 of Schedule B1 to the Act is simply not drafted on the basis or with the anticipation that there may be a continuation of the appointment following a restoration when a petition to wind up the company cannot be presented until after the appointment of the Joint Administrators has ceased.

H) Section 240(3)(d) of the Act

39. Assistance is sought from section 240(3)(d) of the Act by Mr Shaw on two different bases. First that it is relevant to the construction of paragraph 84 of Schedule B1 to the Act and second that it is relevant to the Court's power to make directions upon restoration of the Company under section 1032(3) of the Act.
40. Preferences are claims made by the relevant office holder asserting that a creditor of the company has been wrongly paid ahead of other creditors in breach of the pari passu principle. For such a claim to arise it is necessary (amongst other requirements) for it to have occurred during the "relevant time" in circumstances of insolvency with the person responsible being influenced by a desire to produce a preference.
41. I refer to the following provisions (my underlining):-

Section 239 Preferences (England and Wales)

(1) This section applies as does section 238 [which includes the definition of "the office holder" as the administrator of the company entering administration or the liquidator of the company in liquidation as the case may be].

(2) Where the company has at a relevant time (defined in the next section) given a preference to any person, the office-holder may apply to the court for an order under this section.

Section 240 "Relevant time" under ss 238, 239

(1) Subject to the next subsection, the time at which a company enters into a transaction at an undervalue or gives a preference is a relevant time if the transaction is entered into, or the preference given—

(a) in the case of a transaction at an undervalue or of a preference which is given to a person who is connected with the company (otherwise than by reason only of being its employee), at a time in the period of 2 years ending with the onset of insolvency (which expression is defined below),

(2) [unable to pay debts requirement]

(3) For the purposes of subsection (1), the onset of insolvency is—

[(a) in a case where section 238 or 239 applies by reason of an administrator of a company being appointed by administration order, the date on which the administration application is made,

(b) in a case where section 238 or 239 applies by reason of an administrator of a company being appointed under paragraph 14 or 22 of Schedule B1 following filing with the court of a copy of a notice of intention to appoint under that paragraph, the date on which the copy of the notice is filed,

(c) in a case where section 238 or 239 applies by reason of an administrator of a company being appointed otherwise than as mentioned in paragraph (a) or (b), the date on which the appointment takes effect,

(d) in a case where section 238 or 239 applies by reason of a company going into liquidation either following conversion of administration into winding up by virtue of Article 37 of the EC Regulation or at the time when the appointment of an administrator ceases to have effect, the date on which the company entered administration (or, if relevant, the date on which the application for the administration order was made or a copy of the notice of intention to appoint was filed), and

(e) in a case where section 238 or 239 applies by reason of a company going into liquidation at any other time, the date of the commencement of the winding up].

42. It is apparent from those provisions and accepted by Mr Shaw that a claim of preference is to be brought by the office-holder who is the office-holder able to assert that the relevant time requirement is satisfied. In the case of an administration followed by a liquidation, the liquidator will not have a claim if the relevant time requirement is not satisfied by reference to the commencement of the liquidation, whatever the position with regard to the claim of the administrator arising from the administration, unless section 240(3)(d) of the Act applies.
43. Section 240(3)(d) of the Act applies if the liquidation commences (i.e. the date of presentation of the petition or the date of the creditors' resolution to place the company into liquidation) "at the time when the appointment of an administrator ceases to have effect". As Mr Shaw submits, its purpose is to provide that the date of administration will remain the relevant date of "onset of insolvency" when a liquidation follows seamlessly.
44. Its purpose is not to produce that result whenever a liquidation occurs at some stage in the future after there has previously been an administration. This is apparent from its wording and from the fact that there may be a considerable gap between administration and liquidation. An obvious example being a company whose business was successfully rescued as a going concern, restored to the directors but placed into liquidation after a deterioration in its financial affairs some years later. Plainly section 240(3)(d) of the Act is not intended to apply in those circumstances.
45. That example illustrates that section 240(3)(d) of the Act must be treated as the cart behind the horse. It only applies if the factual requirements are satisfied and its provision cannot alter the construction of paragraph 84 of Schedule B1 to the Act. In contrast paragraph 83 of Schedule B1 to the Act creates the facts which satisfy section 240(3)(d) of the Act by providing that the company will be wound up on the day a notice is registered under that provision. Parliament could have provided that the appointment of the administrator ceased upon dissolution if the intention was that the liquidator could then rely upon section 240(3)(d) of the Act. Plainly it did not do so.
46. It is necessary, therefore to move to Mr Shaw's submissions concerning the directions that may be given upon restoration of the Company under section 1032(3) of the Act.

I) Consequences of Restoration

47. Mr Shaw relies upon the purpose of section 240(1)(a) of the Act when submitting that the answer to the problem can be found in section 1032(1) of the Companies Act 2006.
48. Mr Shaw submits (and I quote from his skeleton argument):

"It is just – within the meaning of s1031(c) Companies Act 2006 – to restore the Company as there is a prima facie case that a claim may be brought on its behalf as against its former Director and Shareholder, Mr Wosskow, pursuant to s239 IA 1986 …

The Court is invited to direct, pursuant to its wide jurisdiction under s1032(3) Companies Act 2006, that any period of limitation between the date of dissolution (24 September 2010) and the date of restoration (today) be retrospectively suspended in respect of [the proposed preference] claims ... (In Re Townreach Limited [1994] 3 WLR 983, 43-45)."

49. Mr Shaw has accepted that he can not ask for the operation of the limitation period to be suspended between cessation of the joint administrators' appointment and the commencement of the liquidation (see paragraph 5.7 above) in the absence of Mr Wosskow. This absence presumably also prevents the Petitioner from applying for a direction that the Joint Administrators' Notice should be set aside in circumstances where there will be no consequence of a dissolution as the notice intended and/or when it might be argued that the notice should not have been given.
50. No submissions were made to me in this regard and I have therefore not considered whether the power under this statutory provision can (by analogy with the approach taken at first instance and not disapproved by the Court of Appeal in Hunt v Harb [2012] 1 WLR 317 at [10-13] when applying section 303 of the Act for a bankruptcy to a notice of discontinuance and potentially by analogy with the application of section 168(3) of the Act concerning liquidations) or in this case should be exercised to make such a direction. I refer to this for completeness and do not set out any views on the merits or otherwise of such an application.
51. As a result of the acceptance referred to in paragraph 49 above, Mr Shaw's submissions developed into an alternative approach, namely that the wide jurisdiction under s1032(3) Companies Act 2006 enables the Court to extend the period of the administration to the date of restoration when the winding-up order will also made.
52. The power to give directions under section 1032(3) Companies Act 2006 is to be exercised for the purpose of giving effect to the statutory fiction of section 1032(1) Companies Act 2006. The statutory fiction is that the company is deemed to have continued in existence as if it had not been dissolved (see paragraph 15 above). In other words to treat the Company as having continued in existence throughout the period from dissolution to the date of restoration. An example of the direction a court may give is to suspend the limitation period for creditors whose claims were not time barred at the date of dissolution but will otherwise be so when the Company is restored. Plainly such a direction will put the creditors in the position they would have been in had the dissolution not occurred.
53. In this case, however, nothing has happened between dissolution and today. At the date of dissolution, which did not occur, the appointment of the Joint Liquidators had already ceased and the statutory procedure was in place which meant that the administration had ended 3 months earlier. Applications could be made to extend, suspend or disapply the dissolution but not to extend the administration.
54. The purpose of the directions is to ensure the position of the company is the same as if there had been no dissolution. That position is that the company ceased to be in administration on 24 June 2010. This remains the case. It follows that I am not able to make the direction sought, namely to extend the administration, because it will not give effect to the statutory fiction of section 1032(1) Companies Act 2006.

J) Suspension of the Limitation Period

55. The alternative submission advanced within the skeleton argument relying upon Donaldson v O'Sullivan [2009] 1 All ER 1087 (see paragraph 5.8 above) is not pursued in the absence of Mr Wosskow.

J) Variation of the Administration Extension Order

56. I am still asked to vary by further extension the Order of the Leeds District Registry which extended the administration period to 2 July 2010 pursuant to Insolvency Rule 7.47(1) (see paragraph 5.9 above).
57. There are difficulties for such an application arising from the fact that the Order was made in the Leeds District Registry. In addition there is the problem that the Petitioner was not a party to the application made by the former administrators which resulted in the Order. The former administrators are not making this application.
58. In any event the decision of Re Roches Leisure Services Limited [2005] EWHC 3148 (Comm) was concerned with the practice adopted before the Enterprise Act 2002 and therefore before Schedule B1 to the Act was in force. At that time retrospective extension of administration orders was common and the jurisdiction justified by the application of the power conferred under Insolvency Rule 7.47(1). Now, however, it would not be right to adopt such a practice in conflict with the scheme of Schedule B1 to the Act. If that scheme provides that the appointment has ceased, as it does in the current circumstances under paragraph 84(7) of Schedule B1 to the Act, the statutory result cannot be evaded by using Insolvency Rule 7.47(1).

K) The Decision

59. It follows from the matters above that I do not accept Mr Shaw's submissions concerning the construction of paragraph 84(7) of Schedule B1 to the Act. I do not consider it right extend the administration until the date of liquidation in reliance upon the powers conferred by section 1032(3) of the Companies Act 2006.
60. I will restore the Company to the Register and order the compulsory winding up of the Company as asked. If technically this also requires me to disapply the 3 month period for dissolution pursuant to paragraph 84(7)(c) of Schedule B1 to the Act on the basis it continues to run now there has been no dissolution, I will direct that too.
61. I am also asked to appoint Mr Timothy James Bramston as liquidator. He, an insolvency practitioner with "Griffins", consents to this appointment. I only have power to make the appointment if a winding up order is made "immediately upon the appointment of an administrator ceasing to have effect" (see section 140 of the Act). For the reasons set out above, that has not occurred.

Order Accordingly