Administration Appointments: Does Failure To Give Notice Under Schedule B1 Render The Appointment Void?

Strategic Advantage SPC v Tokenhouse VB Limited and others [2020] EWHC 003171 (Ch) is the most recent case in a long line of cases grappling with the consequences of non-compliance of prescribed conditions for the out-of-court appointments of administrators, introduced in September 2003 by Schedule B1 to the Insolvency Act 1986 (Schedule B1). The issue that the Court had to decide was whether a failure to comply with the notice requirements of paragraph 26(1) of Schedule B1 is a fundamental defect which invalidates the appointment of the administrator, or whether it is merely an irregularity that is capable of remedy.

What were the facts?

In 2018, Strategic Advantage SPC (the Applicant) and Tokenhouse VB Limited (the Company) entered into a facility agreement (as subsequently amended by a deed of variation) under which the Applicant made funding available to the Company. The Company's liabilities under the facility were secured by a fixed and qualifying