Representation of HSBC Bank Plc 28-Feb-2013 28-Feb-13

JurisdictionJersey
CourtRoyal Court
JudgeSir Christopher Pitchers
Judgment Date28 February 2013
Neutral Citation[2013] JRC 46
Date28 February 2013

[2013] JRC 46

ROYAL COURT

(Samedi)

Before:

Sir Christopher Pitchers, Commissioner, sitting alone.

In The Matter of The Representation of Hsbc Bank Plc
And In The Matter of an Application to Issue a Letter of Request to the High Court of England and Wales for The Appointment of an Administrator Pursuant to the Insolvency Act 1986

Advocate R. O. B. Gardner for the Representor.

Authorities

Insolvency Act 1986.

REO Powerstation Limited [2011] JRC 232A .

Representation of RBS plc [2012] JRC 080 .

Loi (1839) Sur Les Remises De Biens.

ICC Statement of Insolvency Practice 16.

Companies — application to issue a letter of request to the High Court of England and Wales for the appointment of an administrator.

THE COMMISSIONER:
1

HSBC Bank Plc (“the Bank”) seeks an order that the Court sends a Letter of Request to the High Court of England and Wales, Chancery Division, Companies Court, for assistance by way of the appointment of administrators under the English Insolvency Act 1986 over a Jersey Company, Tambrook Jersey Limited (the “Company”.) The Bank granted facilities of some £9.65 million to the Company, to enable it to acquire and develop property in Margate, Kent. As explained in the affidavit of Mr Brian Alderson, the beneficial owner of the Company, it has run into serious financial difficulties and is now insolvent on both the cash flow and balance sheet tests. There is some urgency in the matter as the properties are deteriorating.

2

It is settled law that this Court has jurisdiction to issue a request to the English Court, it being recognised that Jersey Insolvency Law does not make provision for the flexibility offered by the administration process; see REO Powerstation Limited [2011] JRC 232A. Although for the purposes of English Law, the Company's main centre of interest is not in England (it's registered office is in Jersey) and thus the Company has no right to apply directly to the English Court for the appointment of administrators using the “out of court route”, the English High Court is nevertheless, able to make an administration order on the request of this Court. This case is similar to that of Representation of RBS Plc [2012] JRC 080 in that all of the assets of the company are situated in England, and all but one of its creditors are located in England. Whilst the facility with the bank is governed by Jersey Law, the security documentation is all governed by English Law. The Bank is the only secured creditor.

3

The application is supported by an opinion from Felicity Toube, QC dated 7 th February, 2013, confirming that:–

  • (i) pursuant to Section 426(4) Insolvency Act 1986 the High Court may assist the Royal Court (being the court having corresponding jurisdiction in relation to insolvency law in Jersey);

  • (ii) pursuant to English Insolvency Act 1986, Schedule B1, para 3:–

    “The administrator of a company must perform his functions with the objective of –

    • 1. Rescuing the company as a going concern, or

    • 2. Achieving a better result for the company's creditors as a whole than would be like if the company were wound up (without first being in administration), or

    • 3. Realising property in order to make a distribution...

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