Manolete Partners plc v Hayward and Barrett Holdings Ltd and Ors [2021] EWHC 1481 (Ch)
- s. 423 Insolvency Act 1986
- by Caroline McDonagh
- 18-04-2024
Where a company is the Claimant and the claim will involve questions of fact, the appropriate originating process is a N1 claim form under Part 7 of the CPR, not an insolvency application.
This is an important case where the Applicant was an assignee of certain claims. It issued an application including transaction avoidance provisions against two Respondents, and claims against the two other Respondents for breaches of their duty as directors.
The claims against the first and second Respondent made under s.239 Insolvency Act 1986 were insolvency proceedings. The claim under s.423 Insolvency Act 1986 was not insolvency proceedings, because if made under that section it cannot satisfy rule 1.35 of the Insolvency Rules 2016. This rule only applies to applications made under Parts I-XI of the Act. Section 423 is in Part XVI of the Act. This fact means that it cannot be 'insolvency proceedings'.
This case provides that if r.1.35 cannot be satisfied, and the proceedings are therefore not insolvency proceedings, the originating process is not an insolvency application but rather a claim form under Part 7 of the Civil Procedure Rules 1986. However, in their discretion, where applications have involved both an insolvency application and an application under s.423, courts have often allowed such 'hybrid applications' to proceed as insolvency applications.