Registrar of Companies v Angela Swarbrick & Ors (2014)
The Registrar of Companies was required to remove from the register a statement of proposals made under the Insolvency Act 1986 Sch.B1 para.49 and to replace them with amended proposals submitted by the company's administrators. Some of the material in the original proposals fell within the ambit of the Insolvency Rules 1986 r.2.33A; it did not matter that the statement had already been sent to the Registrar.
The applicant Registrar (R) applied to set aside an order made in favour of the respondent company administrators (X).
X had sent R a statement of proposals under the Insolvency Act 1986 Sch.B1 para.49 for the purpose of the company's administration. R had lawfully placed the proposals on the register. An issue then arose as to whether by making the contents of the proposals publicly accessible, the company had breached a contractual obligation to keep certain information confidential. Consequently, X applied to replace the proposals with amended proposals which omitted the material in question. They argued that the material comprised matters which fell within the ambit of the Insolvency Rules 1986 r.2.33A, and that disclosure of that material by placing it on the register would prejudice the conduct of the administration. A deputy registrar agreed and made an order stating that the proposals contained unnecessary material which could not readily be separated from the rest of the document and that the proposals were accordingly not treated as meeting the requirements for proper delivery. He directed R to replace the proposals with the amended proposals.
R submitted that (1) in light of the language of r.22.3A, the court's power to order that the statement "must not be sent to the registrar of companies" did not apply to the situation where the statement had already been sent; (2) the court had no basis for declaring that the proposals contained "unnecessary material" within the meaning of the Companies Act 2006 s.1074(2); (3) he had no power under s.1076 of the 2006 Act to accept the amended proposals as a replacement for the proposals and could not be required to do so.
(1) On the correct construction of r.2.33A, the jurisdiction of the court to make an order limiting disclosure of the specified part of the statement as otherwise required by Sch.B1 para.49(4) was not exhausted the moment the statement had been sent. On the contrary, an application for such an order could be made even after that event, and an order could be made with retrospective effect. Typically, an order under r.2.33A would be made before the statement was sent to R. In that case, so long as the order remained in force, R would be obliged to deal with the statement as if it contained the matters set out in para.49 and r.2.33(2), even though, in light of the order of the court, it did not do so. There was no reason why R should not be equally bound by an order under r.2.33A if it was not made until after the statement had been sent to him. That did not impugn his conduct in placing the statement on the register, but merely meant that henceforth he satisfied his duties by placing a redacted version on the register. The effect of such an order being made after a para.49 statement had been sent to R was that, for the purposes of s.1080 of the 2006 Act, the original statement was no longer properly regarded as a document "delivered to the registrar under any enactment" and was replaced for those purposes by the redacted version. Accordingly, R was not in breach of duty by complying with the order. There was no difficulty in reconciling compliance with such an order with R's duties under the 2006 Act. In particular, if appropriate, R would be able to place a note on the register in compliance with s.1081(1)(c) and (d), enabling him to preserve the integrity of the register as a record of historical events, and he was able to give effect to the order by exercising his power to remove material from the register under s.1094(1). That was what R ought to do, in compliance with the order. However, if to get him to comply it was necessary to seek relief against him by way of judicial review or according to ordinary public law principles, it should be possible to rely on traditional public law grounds of illegality, irrationality and proportionality, Campbell v Mirror Group Newspapers Ltd  UKHL 22,  2 A.C. 457 considered (see paras 52-61 of judgment). (2) The proposals contained "unnecessary material" within the meaning of s.1074(2). That was not the position at all times; it only became so when the order was made. Unless the disputed materials were required to be included in the para.49 statement pursuant to r.2.33(2)(h) and (j) they would not fall within the ambit of r.2.33A, and so could not properly form the subject of an order under that Rule. Accordingly, the declaration that the proposals contained unnecessary material was in appropriate form (para.75). (3) Rule 2.33A provided a basis for ordering the relief sought by X. An order under that rule ought to be all they required to enable them to achieve their desired result. However, if something more was required to achieve that result, the court had jurisdiction, which it would be appropriate to exercise if necessary, to require R to exercise the power contained in s.1076 to accept a replacement for a document previously delivered that did not comply with the requirements for proper delivery and contained unnecessary material, Calmex Ltd, Re  1 All E.R. 485, Igroup Ltd v Ocwen  EWHC 2431 (Ch),  1 W.L.R. 451 and Company (No.007466 of 2003), Re  EWHC 60 (Ch),  1 W.L.R. 1357 considered (paras 101-102).
LTL 16/5/2014 :  EWHC 1466 (Ch)