Adrian Charles Hyde & Anor v Sukhwinder Todd
[2024] EWHC 1423 (Ch)
Abigal Boura v Lyhfl Limited
19 October 2023
[2023] EWHC 2585 (Ch)
High Court
Two people own a company. One tried to get the company put into administration without the other's agreement. The judge said you need both to agree, so the application failed.
Key Facts
- •Ms Abigal Boura, a director of LYHFL Limited, applied for the appointment of an administrator under paragraph 12(1)(b) of Schedule B1 to the Insolvency Act 1986.
- •LYHFL Limited is not represented, but the application is opposed by Mr Leigh Harmer, the other director.
- •Ms Boura and Mr Harmer are the sole directors and shareholders of the Company.
- •The application was opposed on the grounds that one director lacks standing to apply for administration without board approval and the company is solvent.
- •The court heard arguments only on the issue of standing.
Legal Principles
The court may make an administration order only if the company is or is likely to become unable to pay its debts and the order is likely to achieve the purpose of administration.
Insolvency Act 1986, Schedule B1, paragraph 11
An application for an administration order may be made by the company or the directors of the company.
Insolvency Act 1986, Schedule B1, paragraph 12(1)
A reference to something done by the directors includes a reference to the same thing done by a majority of the directors.
Insolvency Act 1986, Schedule B1, paragraph 105
Insolvency proceedings will not be invalidated by formal defects or irregularities unless substantial injustice is caused and cannot be remedied.
Insolvency Rules 2016, rule 12.64
Outcomes
The application was dismissed.
One of two directors has no standing to apply for an administration order without the approval of a majority of the directors and a valid board resolution. The court relied on precedent from Equiticorp, Minmar, and BW Estates, finding that a majority board decision is required, even in cases of deadlock. Brickvest and Nationwide were distinguished.
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