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Administration: failure to serve QFCH with NoI to appoint administrators is abuse of process, invalidating moratorium—Security Trustee Services v Seabrooke Road and nullity versus irregularity debate (England and Wales)

Published on: 09 March 2021

Published by a LexisNexis Restructuring & Insolvency expert
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Security Trustee Services Ltd v Seabrooke Road Ltd [2021] EWHC 436 (Ch), [2021] All ER (D) 105 (Jan)

Delivering judgment, Miles J determined that the omission to serve the QFCH not only breached para 26 but also constituted an abuse of process, warranting the NoIs’ removal from the court record in accordance with the Court of Appeal’s guidance in JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd [2017] EWCA Civ 267.

This signifies a departure from the recent authorities of Re Tokenhouse VB Ltd; Strategic Advantage SPC v Rutter and others [2020] EWHC 3171 (Ch), and Re NMUL Realisations Ltd; Causer and others v NMUL Realisations Ltd (in administration) [2021] EWHC 94 (Ch), where Insolvency and Companies Court Judges (ICCJs) treated the non-service of a QFCH with a NoI (under para 15 or para 26) as a mere irregularity, causing no prejudice and leaving an administrator’s appointment unaffected.

Prepared by Christopher Boardman QC, barrister at Radcliffe Chambers, and Prav Reddy, partner at Katten Muchin Rosenman, acting respectively as counsel and instructing solicitor to the applicants.

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