NTI COVID-19 FAQ

234: Cooperate More

Posted on Jun 23, 2020. by NTI

It's fabled that you know you are getting old when a policeman looks like a teenager (I mean, they really DO, don't they? Anti-terrorism officers in Hampshire are only allowed out until 7.30pm on weekdays without their Mums). However, you know when you are ancient when you can recall me (Neil) singing to you during CPI or Joint Board lectures to help you make the connection between a section number and what it relates to. Who doesn't recall the now infamous, "123, it's insolvency (TOGETHER ...)", or, "Company in deep poo, section 122"?

One other that I never sang (but wish I had) is, "234, 'ere you, cooperate MORE". But then again, with open book exams and the flagrant abuse of tabs to connect section and rule numbers, the JIEB isn't what it used to be. So, you may need reminding about section 234 of the Insolvency Act 1986. I do recall telling much younger versions of you that it is at the front end of the one-times' table, but would also have said it helps (if you're an officeholder) to get information, documentation, cooperation or property from someone on a case who is keeping it from you. 

I didn't say that the section provides a means of determining complex issues about title involving third party claims or the prosecution of a claim for specific performance. This is because it never occurred to me that it would and, in that (and probably only that), the Court of Appeal agrees with me. In the recently reported case of Ezair v Conn (reported this month) Mr E(zair) owned a number of residential rental investment properties and in 1999 entered into an agreement with Northern Estates Limited (NEL) to transfer the business in consideration of shares in NEL to them. In 2003 NEL entered into an agreement with Charlotte Street Properties (CSP) to sell the properties to them and when CSP later went into Administration the IPs on the job made an application for relief under s234, requesting that Mr E deliver up the executed property transfer forms to enable them to complete the legal transfer of the properties to CSP.

The High Court allowed the application, but the Court of Appeal didn't. It happened that neither the 1999 agreement to sell the properties to NEL nor the one to sell on to CSP in 2003 had actually happened, and there was no basis upon which CSP could require Mr E to deliver up executed property transfer forms (as they didn't exist). Hence s234 didn't work to force the delivery of documentation (which didn't exist) and to address complex legal issues (for which it wasn't designed).

It is tantamount to using Santa (who doesn't exist) to explain the current Government guidance on social distancing (for which he isn't designed and which, in any case, makes absolutely no sense).

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