Legislation
Case Law

 
Re L & N D Development and Design Ltd Dixon v Myers and another (as administra-tors of L & N D Development and Design Ltd) [2020] EWHC 2803 (Ch)

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Overview

The applicant (director and sole shareholder) applied under para 74(1)(a) sch. B1 of the IA86 for an order requiring the respondent (administrator) to assign a cause of action to her. The application was REFUSED as the applicant failed to discharge the burden of showing that there was real prospect of success in respect of the cause of action.

Background

The company was focussed on property development. In 2016 the company entered into a facility agreement with a finance provider, secured by fixed and floating charges, a personal guarantee and legal charge over another property. A further two facilities were entered into, however, the company required further funding, which failed to materialise following negotiations. As the company was unable to complete the development or repay the finance borrowed, the secured creditor placed the company into Administration, which resulted in possession proceedings being brought by the administrators in respect of the charged property. In those proceedings the applicant defended on the grounds that there had been a breach by the finance provider and one of the facilities had been entered into under economic duress.

The applicant offered the administrators £2,000 for the assignment of that cause of action against the finance provider, but the administrators declined.

Proceedings

In this matter the applicant applied for an order under para.74 requiring the administrators to assign the cause of action to her on the basis that by refusing to do so they were acting "so as to unfairly harm" her interests.

The applicant failed to show that the company had a claim in damages that had a real prospect of success. Failure to show a real prospect of success in essence meant they could not say that unfair harm had been suffered as a result of the administrator not allowing it to proceed.

 

“An application under paragraph 74 is not a review of an administrator's decision and it would be wrong to require an office holder to assign a cause of action that was ill-founded because the office holder had not identified that as a reason for not assigning prior to an application under paragraph.”

 

 

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