Key Facts
- •Sophie Perhar appealed the order of Deputy ICC Judge Baister concerning the validity of the appointment of administrators over her company, The Sustainable Bathroom Company Limited.
- •The administrators were appointed out of court by Synergy in Trade Limited due to alleged breaches of a debenture and facility letter.
- •Key disputes centered around the enforceability of a floating charge, alleged breaches of trust, waiver arguments, and defects in the appointment process.
- •Aldi, a customer, paid into the wrong account due to an IBAN error, leading to a breakdown in the relationship between Perhar's company and Synergy.
- •Synergy appointed administrators shortly after issuing a letter of demand.
- •The appeal focused on four grounds: factual findings akin to fraud, erroneous contract interpretation, wrong findings on waiver, and wrong findings on the appointment process.
Legal Principles
Implication of terms in a contract based on business efficacy or obviousness.
Various case authorities cited in the judgment (e.g., Re ARL 009 Ltd [2020] EWHC 3125 (Ch)).
Enforceability of a floating charge under paragraph 16 of Schedule B1 of the Insolvency Act 1986.
Insolvency Act 1986, Schedule B1, paragraph 16.
Validity of insolvency proceedings despite formal defects; substantial injustice test under r.12.64 of the Insolvency (England and Wales) Rules 2016.
Insolvency (England and Wales) Rules 2016, r.12.64.
Waiver and promissory estoppel; consideration of oral statements in summary proceedings.
Closegate Hotel Development (Durham) Ltd v McClean [2013] EWHC 3237 (Ch).
Outcomes
Appeal allowed on grounds 1 to 3 (factual findings, contract interpretation, waiver).
The judge made factual findings without the opportunity for cross-examination and the issues of breach of trust and waiver were heavily fact-dependent and unsuitable for summary determination. The implication of a term into the debenture was also context-dependent and needed further factual clarification.
Appeal dismissed on ground 4 (defective appointment of administrators).
While the appointment process was sloppy, the defects were not fundamental and did not cause substantial injustice to the company.