Jurisdiction(s):
United Kingdom

JCAM v Davis Haulage: settled intention required for NoI; CVA/refinancing cannot justify moratorium; no moratorium without QFCH (England and Wales)

Published on: 05 May 2017

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Original news JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd [2017] EWCA Civ 267, [2017] All ER (D) 62 (Apr)

The Court of Appeal (Civil Division) upheld the property owner’s challenge to a High Court ruling that had declined to take off the court record a copy of a notice of intention (NoI) to appoint an administrator. The court examined the effect of paragraphs 44(4) and 28(2) of Schedule B1 to the Insolvency Act 1986. What, then, should practitioners draw from this? The ruling makes clear that lodging an NoI where there is nobody to serve, or where there is no firm decision to proceed to an appointment, purely to obtain the moratorium, can no longer be relied upon. Merely contemplating an administration if other avenues fall away does not suffice. Consequently, businesses seeking refinancing or putting forward company voluntary arrangements (CVA) are not entitled to file an NoI simply to secure a moratorium while alternative rescue measures are pursued. Any NoI filed on that basis is liable to be set aside and expunged from the court file. Nevertheless, the position in Re Cornercare Limited remains to be addressed on this point within the same context here...

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