UK: England and Wales: liquidators' appointment not invalidated by failure to give notice of resolution to floating charge holder

Judgment was given by HHJ Purle QC in Bevan v Walker and others [2018] EWHC 265 (Ch) last week. A summary of the decision has been published by the ICLR: see [2018] WLR(D) 103. At issue was the status of liquidators who had been appointed following the passing of a special resolution by shareholders to place a company in members' voluntary liquidation where there had been a failure to give notice of the resolution to a floating charge holder as required by section 84(2) of the Insolvency Act 1986.

The trial judge, HHJ Purle QC, held that the failure to provide notice did not invalidate the appointment of the liquidator first appointed or the appointment of the liquidator subsequently appointed when the company was placed in a creditors' voluntary winding-up.  In doing so, HHJ Purle QC said that the cases on the appointment of administrators were of "no or limited assistance in the present context", stressing that once the special resolution to wind-up the company was passed, the company was placed in liquidation for the purposes of section 84(1)(b) of the 1986 Act, notwithstanding any failure to give notice as required to any charge holders.

Note: HHJ Purle QC retired as a senior circuit judge earlier this month, and was based in Birmingham's Business and Property Courts.