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Re Peter Jones (China) Ltd Smith and another (joint administrators of Peter Jones (China) Ltd) v Registrar of Companies (5 February 2021)

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Overview

 The Registrar does have discretion to remove ‘unnecessary material' within the meaning of s 1074 of the Companies Act 2006 –

 

 1074 Documents containing unnecessary material

(1)This section applies where a document delivered to the registrar contains unnecessary material.

(2)“Unnecessary material” means material that—

(a)is not necessary in order to comply with an obligation under any enactment, and

(b)is not specifically authorised to be delivered to the registrar. 

(3)For this purpose an obligation to deliver a document of a particular description, or conforming to certain requirements, is regarded as not extending to anything that is not needed for a document of that description or, as the case may be, conforming to those requirements. 

(4)If the unnecessary material cannot readily be separated from the rest of the document, the document is treated as not meeting the requirements for proper delivery.

(5)If the unnecessary material can readily be separated from the rest of the document, the registrar may register the document either—

(a)with the omission of the unnecessary material, or

(b)as delivered.

 

Background

In accordance with r3.32 Insolvency Rules 2016 (‘IR16’), administrators are required to deliver to the Registrar of Companies as soon as reasonably practicable a copy of a statement of affairs. In this case, the administrators submitted the statement of affairs, however, it included schedules of employees and consumers claiming amounts paid in advance for the supply of goods and service, which the administrator must not deliver to the Registrar of Companies (see r3.30(6)(b) of IR16).

 

 

The administrator requested the filing of the statement of affairs be removed from the register. This request was refused without a court order being granted to that effect.

 

Decision

The schedules relating to employees and consumers were “unnecessary material” within the meaning of s 1074 CA 2006 and “they were readily able to be separated from the statement of affairs.”

 

 

“Under s1074 CA 2016, the Non-Compliant SoA was not therefore improperly delivered and the Registrar had a discretion whether to register the statement of affairs in its complete state as delivered or with the unnecessary material removed. It is unclear whether that discretion was exercised at all but, if it was, it was on the face of things exercised wrongly in a public law sense of being exercised irra-tionally or in a Wednesbury unreasonable sense. If the IR 2016 prohibit delivery of the Schedules to the Registrar it is difficult to see how it could be lawful for him to register them. In those circumstances judicial review would lie. The most appropriate remedy would, in my view, be removal of the Sched-ules and not (as sought by the Administrators) removal of the entire SoA.”

 

“In my view, an alternative (and preferable) analysis is that the Registrar, having registered the SOA in-cluding the Schedules, had a discretion to remove the Schedules under s1094 CA 2016. He should have done this and his refusal to do so is unlawful and irrational within Wednesbury principles. There may be an issue as to whether he had “power” to register the Schedules. It might be said that he did not have power to do so in the light of what I have said in paragraph 33 above. The counter-argument, which I prefer but on which I did not hear detailed argument, is that the “power” referred to within s1094 CA 2016 is a reference to jurisdiction rather than a reference to whether as a matter of discretion on the facts it could be exercised in a particular manner. The same argument applies as regards the procedure (i.e. an application within the proceedings or judicial review) which I have already addressed.”

 

Final comment

It is important to note that the ‘unnecessary material’ related to the schedules only and not the entire statement of affairs. Members should continue to ensure the contents of a statement of affairs is correct before submitting to the Registrar of Companies. Furthermore, members should continue to check all filings before submission otherwise an application to the Court may be required to remove from the register. 

 

 

 

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