Making an out of hours qualifying floating charge holder (“QFCH”) appointment can be problematic due to the procedural requirements set out in Rule 3.20 of the Insolvency (England and Wales) Rules 2016 (the “Rules”).  

If a QFCH wishes to make an appointment when the court is closed then it can do so but must follow the procedure set out in the Rules which requires the appointment documents to be sent by fax or (more likely) email, with the hard copy appointment documents being physically taken to court on the next occasion the court is open for business. However, the requirement to “take” the documents to court, conflicts with the fact that court documents should be filed electronically on ce-file. This provokes different responses from the court, sometimes the documents will be accepted over the counter, other times they will not.

This raises concern, because an administrators’ appointment ceases to have effect (Rule 3.22(2)) if the requirements of Rule 3.20(9) of IR 2016 are not completed – and how can you complete them if you can’t take the documents to court because the court won’t accept them? This has resulted in practitioners engineering inventive ways to demonstrate that they have tried to “take” the documents to court.

However, the “Qualifying Floating Charge Holder – out of court appointments” practice note published on 31 October 2023 now provides a solution.

The practice note confirms that the requirements of Rule 3.20(9) (to take the documents to court) will be satisfied by filing the required documents using ce-file.  This means that when making an appointment out of hours, a QFCH can email or fax the appointment documents and then immediately thereafter file the documents listed in Rule 3.20(9) on ce-file. If those documents are ce-filed out of hours the appointment will be verified on the next occasion the court is open for business – meaning it won’t cease.  

Although out of hours QFCH appointments are rare, the impact of Rule 3.22(2) and the difficulties that can be faced when trying to file the documents at court when it is next open creates an element of risk – which always makes practitioners nervous. This practice note will put those concerns to bed as well as help streamline the process for out of hours QFCH appointments.   

However, what the practice note doesn’t allow is for the appointment documents to be ce-filed – those must still be faxed or emailed as required under Rule 3.20(1) to ensure that the appointment is valid.