Re T & N Ltd

The exit from administration of T&N Limited (T&N) and 134 associated companies may be in sight.

The administrators and those most closely involved in the proceedings in the United States under Chapter 11 of the US Bankruptcy Code entered into a settlement agreement in September 2005. In the broadest of terms, the agreement provides for certain creditor groups of the UK companies, notably US and Canadian claimants for asbestos-related personal injuries and the great majority of inter-company claims, to be excluded from the UK asset distribution process and for such creditors to be dealt with through a plan of reorganisation in the Chapter 11 proceedings. The claims of other creditors will be dealt with through voluntary arrangements and schemes of arrangement to be promoted by the administrators in England. Arrangements were agreed for sharing recoveries under T&N’s principal product liability insurance policy.

The overall effect of these arrangements, if they are approved and become effective, will be to enable the administrations and Chapter 11 proceedings relating to Federal Mogul Corporation (FMC), T&N and their associated companies to be brought to an end. Those companies will be able to carry on in business without the continuing threat of insolvency posed by existing claims, and by personal injury and associated claims arising in the future from past exposure to asbestos. Instead all such claims will be dealt with under these arrangements for which substantial sums will become available.

By an order made on 14 December 2005, I gave directions that the administrators be at liberty to propose voluntary arrangements and/or schemes of arrangement in respect of such of the companies as they considered appropriate in accordance with the terms of the settlement agreement. The administrators, creditor groups and their advisers have since been engaged in the huge amount of work needed to prepare the voluntary arrangements and schemes in detail and to resolve the many difficulties arising in that process.

As mentioned above, the proposals as they affect claims outside the United States, Canada and some other countries are to be given effect primarily by voluntary arrangements to be proposed by the administrators under Part 1 of the Insolvency Act 1986, in relation to 51 companies in the group. Schemes of arrangements under section 425 of the Companies Act 1985 are also to be proposed between 58 group companies and present and former employees and others whose claims are the subject of employers liability insurance policies.

This judgment is concerned with issues arising in relation to the proposed voluntary arrangements (CVAs). The proposed schemes of arrangements have been the subject of separate applications.

Unlike schemes of arrangements, CVAs can be proposed, approved and implemented without any court involvement. The administrators do not need, and have not sought, the court’s directions or approval as to the detailed terms or form of the proposed CVAs, nor are any orders required from the court for the administrators to convene the meetings of creditors at which the CVAs will be considered.

Nonetheless certain issues have arisen in connection with convening the proposed meetings on which the administrators consider that directions from the court are necessary or desirable.

It is unnecessary to describe in any detail the CVA, the current draft of which runs to over 80 pages. In addition, there is a draft trust deed relating to the proposed UK Asbestos Trust and detailed distribution procedures relating to the operation of the Trust. Out of the total of 51 companies involved, most have or are thought to have asbestos-related liabilities. The proposals deal with claims, defined in wide terms, as at a date yet to be agreed. Claims are divided into two general categories. The first is Asbestos PI Claims which comprise personal injury claims and related claims, such as claims for contribution claims and claims under the Fatal Accidents Act 1976, arising out of exposure to asbestos prior to the relevant date. The second category, Non-Asbestos Claims, comprise all other claims, including asbestos-related property damage claims.

Non-Asbestos Claims will be dealt with by a combination of reserves, indemnities and one-off payments. Reserves and sub-reserves will be established for each of the companies. From these reserves preferential claims will be paid in full and distributions will be made in respect of general unsecured claims, excluding certain categories of claims which will be dealt with in other ways. Over £120 million will be paid into these reserves, with amounts in respect of some companies still to be agreed. In the case of 7 companies, which do not have asbestos-related liabilities, the payment of claims will be funded by FMC. A separate reserve of £5.5 million will be established for asbestos property damage claimants who elect to seek payment under the CVAs, rather than in the Chapter 11 proceedings. The CVAs contain provisions for the processing of claims against these reserves and the calculation of distributions. A reserve account, funded by FMC and T&N, will be established for corporation tax liabilities.

A number of Non-Asbestos Claims will be the subject of separate treatment. The most significant is that the claim of the T&N Pension Scheme against T&N will be satisfied by an immediate payment of £193 million. Its claims against other companies under section 75 of the Pensions Act 1995 will, subject to certain maximum values, be made against the relevant sub-reserve and will be dealt with in the same manner as other Non-Asbestos Claims.

For the purpose of dealing with Asbestos PI Claims, the effect of the agreement made in September 2005 is to divide all such claims worldwide into two broad groups. Claims resulting from exposure to asbestos in the United Kingdom and Australia and certain other claims, such as claims similar to those made in Lubbe v Cape Plc [2000] 1 WLR 1545 and claims against companies which carried on business as agents for T&N, will be dealt with under the CVAs (CVA Asbestos Claims). Claims resulting from exposure in other countries or circumstances, particularly claims in the United States, will be dealt with under the plan of reorganisation proposed in the Chapter 11 proceedings.

The CVAs confer rights on the CVA Asbestos Claimants to participate in a UK Asbestos Trust which will process and evaluate claims, and make distributions, in accordance with trust distribution procedures. There will be sub-funds for the payment of different categories of claims. In addition to sub-funds holding insurance recoveries, there will be: a sub-fund for claims against T&N itself, to which a single payment of £33 million will be made; a sub-fund for claims which derive from exposure in UK shipyards, to which a single payment of £22 million will be made; and a sub-fund for claims against CVA companies other than T&N, to which payments will be made by the CVA supervisors as and when claims are established. In order to preserve the benefit of certain insurance policies, claims to which those policies may respond are not themselves compromised under the CVAs. However, in substance, so far as concerns payments to claimants, all payments will be made in accordance with the trust distribution procedures and there will be no recourse against the other assets of the relevant companies.

The statutory provisions which are relevant to the issues raised by the administrators are contained in Part 1 of the Insolvency Act 1986 and in the Insolvency Rules 1986. Section 3 of the 1986 Act makes provision for meetings of creditors to be summoned and sub-sections (2) and (3), which are relevant in this case, provide:

“(2)

Where the nominee is the liquidator or administrator, he shall summon meetings of the company and of its creditors to consider the proposal for such a time, date and place as he thinks fit.

(3)

The persons to be summoned to a creditors’ meeting under this section are every creditor of the company of whose claim and address the person summoning the meeting is aware.”

If a CVA is approved at a meeting of creditors, it has automatic effect as provided by section 5(2)(b):

(2)

The …voluntary arrangement –

(b)

binds every person who in accordance with the rules –

(i)

was entitled to vote at that meeting (whether or not he was present or represented at it), or

(ii)

would have been so entitled if he had notice of it,

as if he were a party to the voluntary arrangement.

Creditors have a right of challenge to a CVA under section 6(1) – (3):

“(1)

Subject to this section, an application to the court may be made, by any of the persons specified below, on one or both of the following grounds, namely—

(a)

that a voluntary arrangement which has effect under section 4A unfairly prejudices the interests of a creditor, member or contributory of the company;

(b)

that there has been some material irregularity at or in relation to either of the meetings.

(2)

The persons who may apply under subsection (1) are—

(a)

a person entitled, in accordance with the rules, to vote at either of the meetings;

(aa) a person who would have been entitled, in accordance with the rules, to vote at the creditors’ meeting if he had had notice of it;

(b)

the nominee or any person who has replaced him under section 2(4) or 4(2); and

(c)

if the company is being wound up or is in administration, the liquidator or administrator.

(3)

An application under this section shall not be made—

(a)

after the end of the period of 28 days beginning with the first day on which each of the reports required by section 4(6) has been made to the court, or

(b)

in the case of a person who was not given notice of the creditors’ meeting, after the end of the period of 28 days beginning with the day on which he became aware that the meeting had taken place,

but (subject to that) an application made by a person within subsection (2)(aa) on the ground that the voluntary arrangement prejudices his interests may be made after the arrangement has ceased to have effect, unless it came to an end prematurely.”

If the court is satisfied as to either of the grounds in section 6(1) it may revoke or suspend any decision approving the CVA and give directions for summoning further meetings to consider revised proposals or, in a case where it has found some material irregularity at or in relation to a meeting, it may give a direction for a further meeting to reconsider the original proposal.

Important changes were made to sections 5 and 6 by the Insolvency Act 1986 which, together with certain other changes, were designed to improve the utility of CVAs. Although introduced in 1986 as a quicker and cheaper alternative to schemes of arrangement or arrangements in liquidation, they had been little used. Under section 5 as originally enacted, a CVA was binding only on a person “who in accordance with the rules had notice of, and was entitled to vote at, that meeting (whether or not he was present or represented at the meeting).” In decisions to which I shall refer, it was held that this required actual notice of the meeting. Accordingly, any creditor who was not sent notice, because the administrator was not aware of him or of his address or because of an accidental omission to send the notice to a known creditor, or any creditor who did not receive the notice duly sent to him (and was not otherwise aware of the meeting), was not bound by the CVA. This was in contrast to the effect of a scheme of arrangement. The effect of the amended section 5(2) is that not only those who had notice of the meeting (and were therefore entitled to vote at it: rule 1.17 (1) of the Insolvency Rules 1986) but those who did not have notice of it (and were not therefore entitled to vote) are bound. There is no restriction on the effect of this provision by reference to the reasons why a creditor did not have notice. It may be because a notice was sent but did not arrive, or because a notice was not sent at all either through oversight or because the administrator was unaware of the name and address of the creditor.

Protection for the position of creditors who did not have notice of the meeting is provided by the effect of section 6, as amended. The categories of applicants with standing to challenge a CVA were enlarged to include not only persons who had notice of the meeting and were therefore entitled to vote at it, but also any person who did not have notice of it. For the latter, the time for making an application does not run until he has become aware that the meeting has taken place: section 6(3)(b). Again there is no restriction by reference to the reasons for not having notice. Whatever the reason they may challenge the CVA on grounds of unfair prejudice. A difference may however exist as regards challenge under section 6(1)(b) based on “some material irregularity at or in relation to” the meeting. An obvious irregularity is a failure to give notice to a person who should have received it. If therefore, through oversight, notice is not sent to a creditor whose claim, name and address is known to the administrators, there has been an irregularity in relation to the meeting. If the creditor or his address is unknown, there was no obligation (or ability) to send notice to him and there will not have been an irregularity.

There are two provisions which bear directly on the validity of a meeting. Section 6(7) provides:

“(7)

Except in pursuance of the preceding provisions of this section, a decision taken at a meeting summoned under section 3 is not invalidated by any irregularity at or in relation to the meeting.”

Rule 12.16 of the Insolvency Rules 1986 provides:

“Where in accordance with the Act or the Rules a meeting of creditors or other persons is summoned by notice, the meeting is presumed to have been duly summoned and held, notwithstanding that not all those to whom the notice is to be given have received it.”

Rule 12.16 has been held to be concerned with challenges to the validity of a meeting, not to whether a CVA was binding under the unamended provisions on a particular creditor who did not have notice of the meeting: Re a Debtor (No. 64 of 1992) [1004] 1 WLR 264 at 276, Beverley Group Plc v McClue [1995] 2 BCLC 407 at 415f. In the former case, Mr Colin Rimer QC (then sitting as a deputy judge of the Chancery Division) said as regards rule 12.16 at pp 275-276:

“I comment first that, in my view, for the presumption under that rule to apply, it is a necessary pre-condition that those convening the meeting should have taken proper steps to summon it in accordance with the Act of 1986 and the Rules of 1986. Thus, in the present case, the nominee’s duty pursuant to rule 5.13(2) was to give or send notice to each creditor referred to in the statement of affairs, or otherwise known to him, and to do so in compliance with the provisions of rule 12.11. The giving of such notice did not have to be by way of personal service, but could be by post. However, provided that notice was duly sent or given to all creditors entitled to receive it, then, even if any creditor did not actually receive it, rule 12.16 raises a presumption that the meeting has nevertheless been “duly summoned and held.”

I agree that those responsible for convening a meeting to consider a CVA or an IVA must take proper steps to summon the meeting and their duty is to give notice to every creditor of the company of whose claim and address they are aware (as required by section 3(3) and explained by rule 1.11, in the case of a CVA). I comment later in this judgment on the reference to rule 12.11.

I agree also that rule 12.16 applies in those cases where notice has been duly sent but has not been received. In such a case the meeting is presumed to have been duly summoned and held, and there will not, as it seems to me, be an irregularity of which complaint can be made under section 6. It does not, however, follow that if notice is not sent to a particular creditor, the meeting is therefore invalid and the CVA is incapable of taking effect. Such a failure will undoubtedly be an irregularity for the purposes of section 6. Its impact is a matter for the court under that section but relevant factors are likely to include whether the result of the meeting would or might have been different, the number of creditors involved and the value of their debts and whether the failure was wilful. Given the right of challenge conferred by section 6, it would not in my view be a correct construction of the Insolvency Act that any failure to give notice of the meeting would automatically lead to the invalidity of the meeting.

The other provisions of the Insolvency Rules 1986 relevant to the present issues are as follows. Part 1 of the Rules contains provisions which are specific to CVAs. Rule 1.11 (1) (a) provides:

“(1)

The responsible insolvency practitioner shall fix a venue for the creditors’ meeting and the company meeting, and give at least 14 days’ notice of the meetings-

(a)

in the case of the creditors’ meeting, to all the creditors specified in the company’s statement of affairs, and to any other creditors of whom the insolvency practitioner is aware; and”

Rule 1.11 (2) provides for the documents which must be sent with the notice and rule 1.14 (5) requires also a form of proxy to be sent with it. I have already mentioned rule 1.17(1) which provides that every creditor who has notice of the creditors’ meeting is entitled to vote at it.

Part 12 of the Insolvency Rules contains miscellaneous and general provisions relating to a wide variety of insolvency matters arising under the Act or the Rules. Rule 12.4 (1) – (3) provides:

“(1)

All notices required or authorised by or under the Act or the Rules to be given must be in writing, unless it is otherwise provided, or the court allows the notice to be given in some other way.

(2)

Where in any proceedings a notice is required to be sent or given by the official receiver or by the responsible insolvency practitioner, the sending or giving of it may be proved by means of a certificate—

(a)

in the case of the official receiver, by him or a member of his staff, and

(b)

in the case of the insolvency practitioner, by him, or his solicitor, or a partner or an employee of either of them,

that the notice was duly posted.

(3)

In the case of a notice to be sent or given by a person other than the official receiver or insolvency practitioner, the sending or giving of it may be proved by means of a certificate by that person that he posted the notice, or instructed another person (naming him) to do so.”

Rules 12.4A and 12.5 make provision for the quorum at meetings and for the minutes to stand as evidence of proceedings at meetings.

Part 13 of the Insolvency Rules contains interpretation provisions, including rule 13.3 (1) – (3):

“(1)

A reference in the Rules to giving notice, or to delivering, sending or serving any document, means that the notice or document may be sent by post, unless under a particular Rule personal service is expressly required.

(2)

Any form of post may be used, unless under a particular Rule a specified form is expressly required.

(3)

Personal service of a document is permissible in all cases.”

The effect of the provisions of the Rules cited above is that in summoning the meetings, the administrators will be required to give notice to all the creditors of whose claims and address they are aware (including those specified in the company’s statement of affairs): section 3(3) and rule 1.11 (1). The notice must be in writing (rule 12.4(1)) and accompanied by certain documents and a form of proxy (rules 1.11 (2) and 1.13 (5)). The notice may be sent by post, and any form of post may be used (rule 13.3). Posting of the notices may be proved by a certificate as provided by rule 12.4 (2).

In addition to the above rules, rules 12.10 – 12.12 provide as follows:

“12.10

(1)

For a document to be properly served by post, it must be contained in an envelope addressed to the person on whom service is to be effected, and pre-paid for either first or second class post.

(1A) A document to be served by post may be sent to the last known address of the person to be served.

(2)

Where first class post is used, the document is treated as served on the second business day after the date of posting, unless the contrary is shown.

(3)

Where second class post is used, the document is treated as served on the fourth business day after the date of posting, unless the contrary is shown.

(4)

The date of posting is presumed, unless the contrary is shown, to be the date shown in the post-mark on the envelope in which the document is contained.

12.11

Subject to Rule 12.10 and Rule 12.12, CPR Part 6 (service of documents) applies as regards any matter relating to the service of documents and the giving of notice in insolvency proceedings.

12.12

(1)

CPR Part 6, paragraphs 6.17 to 6.35 (service of process, etc, out of the jurisdiction) do not apply in insolvency proceedings.

(2)

A bankruptcy petition may, with the leave of the court, be served outside England and Wales in such manner as the court may direct.

(3)

Where for the purposes of insolvency proceedings any process or order of the court, or other document, is required to be served on a person who is not in England and Wales, the court may order service to be effected within such time, on such person, at such place and in such manner as it thinks fit, and may also require such proof of service as it thinks fit.

(4)

An application under this Rule shall be supported by an affidavit stating—

(a)

the grounds on which the application is made, and

(b)

in what place or country the person to be served is, or probably may be found.

(5)

Leave of the court is not required to serve anything referred to in this Rule on a member State liquidator.”

It was held by Jonathan Parker J in Skipton Building Society v Collins [1998] BPIR 267 that rule 12.10 applies to notices of meetings convened to consider an individual voluntary arrangement. This was common ground as regards CVAs in Beverley Group Plc v McClue. In Re a Debtor (no. 64 of 1992), it was common ground that rule 12.11 as well as rule 12.10 applied in the case of an IVA.

In none of these authorities, or in any other case so far as known to those involved in the present case, was the applicability of rule 12.12 considered. Mr Snowden QC appearing for the administrators submitted that rule 12.12 does not apply to notices of meetings for CVAs, or indeed of any meetings. Mr Dicker QC for the US plan proponents supported this submission. Their submissions were put on two broad grounds. First, none of rules 12.10 to 12.12 applies to notices of meetings and the assumptions and decisions in the cases mentioned above are wrong. Secondly, in any event, the terms of rule 12.12 are such that it does not apply to notices of meetings.

In his submissions on the general applicability of rules 12.10 to 12.12, Mr Snowden referred first to the general subject-matter of each: service. Rule 12.10 refers exclusively to a document being “served”. Service is the appropriate term for the process whereby documents in court proceedings are delivered to parties or others. So, in the glossary to the Civil Procedure Rules which is designed as a guide to the meaning in the law generally of certain legal expressions used in the Civil Procedure Rules (see CPR rule 2.2 (1)), “service” is defined as the “steps required by rules of court to bring documents used in court proceedings to a person’s attention”. Mr Snowden submitted that service is not an apt word to use in connection with giving notice of meetings. So, the Insolvency Rules refer variously to giving notice or sending notices of meetings, but never to serving, or service of, notices of meetings. Further, rule 12.4 (1) refers to notices required or authorised to be given and rule 13.3 (1) explicitly makes the distinction by referring to “giving notice, or to delivering, sending or serving any document”.

As regards rule 12.11, which is headed “General provisions as to service”, Mr Snowden submitted that his argument based on the prevailing use of “service” and its usual meaning is not diminished by the express reference not only to the service of documents but also to the giving of notice. His reasons were, first, it is restricted to “insolvency proceedings”, which, he submits, refers to court proceedings and, secondly, the incorporation of CPR Part 6 is appropriate only for the service of documents used in connection with court proceedings. CPR Part 6 is in terms confined to service of such documents. Some of its provisions are clearly inapplicable on any footing to non-litigious notices, for example rules 6.3 (service by the court), 6.4 (2) (compulsory service on a party’s solicitor) and 6.5 (2) – (5) (requirement to give an address for service). Part 6.5 (1), which prohibits service out of the jurisdiction is also inapplicable, for reasons which I will address when dealing specifically with rule 12.12. More generally, it is very odd to apply a code such as CPR Part 6 which is specifically dealing with service in court proceedings to the giving of notice of meetings. Mr Snowden submitted that the reference in rule 12.11 to the giving of notice is apt to describe those cases where, for example, notice of an application is to be given to a non-party.

Mr Snowden submitted that giving notice of a meeting by post was expressly permitted by rule 13.3 and there was no need to duplicate this by the application of CPR Part 6 to notices of meetings. Indeed it could be a source of confusion to do so. Does the express provision for giving notices by post under rule 13.3 cut down the right to use other means of delivery, such as fax or document exchanges, permitted by Part 6?

The further point was made that the provisions for the time of deemed service under rule 12.10 have no sensible application to CVAs, whether under the old or the new regime. As actual notice of the meeting was required under the old regime for the CVA to bind a creditor, deemed service of the notice was immaterial, unless he was unable to discharge the burden of proving non-receipt. As notice of the meeting is irrelevant to whether the CVA binds a creditor under the new regime, deemed service of the notice is likewise immaterial. Notice given in accordance with any particular formalities is also irrelevant to the right to attend and vote at the meeting: all that is needed is actual knowledge of the meeting.

These are substantial points. The relevant parts of the Insolvency Rules as regards notices of meetings are to an extent muddled and, if it is intended to make provision for the giving of notices of meetings, the incorporation of CPR Part 6 is a curious way of doing it. However, unless it were necessary to do so, I would be reluctant to disagree with three earlier High Court decisions, particularly in a case where I have not heard contrary argument. This is notwithstanding that there was no contrary argument on the applicability of rules 12.10 and 12.11 to notices of meetings in two of the earlier cases.

In any event, the contrary view is not clearly wrong. There are significant arguments in its favour. First, a substantial plank of Mr Snowden’s argument is that “service” is apt to describe only the service of documents in court proceedings. This is too narrow a view, as best illustrated by section 7 of the Interpretation Act 1978:

“Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.”

There are provisions in the Rules where “service” is clearly not used in the narrow sense of documents in court proceedings: see, for example, rule 13.4 to which I later refer.

Secondly, contrary to the submissions made, there needs to be some provision for deeming the date on which notice is given of a meeting where the notice is sent by post. Many of the provisions of the Insolvency Act and the Insolvency Rules require not less than x days’ notice (usually 14 or 21 days) to be given to creditors. It is accepted that this is clear days, that is, excluding the date of service and the date of the meeting: rule 12.9 (1) incorporating CPR rule 2.8. In Skipton Building Society v Collins, it was argued that section 7 of the Interpretation Act supplied the necessary deeming provision, but it applies only if other provision is not made and it was held that rule 12.10 made other provision. It is logically difficult to argue otherwise, when section 7 itself defines “service”, the word used in rule 12.10, in such broad terms.

Thirdly, the reference in rule 12.11 to the giving of notice is not easily explained away. Mr Snowden suggested that it referred, for example, to notices to non-parties given in relation to court proceedings, but the words “service of documents” is wide enough for that purpose. His principal submission was that “insolvency proceedings” referred to court proceedings under the insolvency legislation, rather than referring more widely to all procedures under the legislation. The definition of insolvency proceedings in rule 13.7 as “any proceedings under the Act or the Rules” does not by itself resolve the issue. However, an analysis of the provisions in which the expression is used shows in my view that it is not necessarily restricted to court proceedings. See, for example, rules 12.4A (1), 13.9 and 13.4. In particular contexts, it may necessarily be referring to court proceedings but it is not by any means the invariable meaning.

Fourthly, if rules 12.10 and 12.11 were restricted to the service of documents in court proceedings, they would more naturally be included in Part 7 of the Rules which deals with court procedure and practice. In fact, there would be no need for an express incorporation on CPR Part 6, because rule 7.51 incorporates the totality of the Civil Procedure Rules, with any necessary modification and except so far as inconsistent with the Insolvency Rules. As with the incorporation of CPR rule 2.8 by rule 12.9(1) of the Insolvency Rules, the most obvious reason for an express incorporation of CPR Part 6 by a provision in Part 12, rather than Part 7, of the Insolvency Rules is to give it a wider application. CPR Part 6 will apply subject to any inconsistent provision in other rules, so, to take an example given by Mr Dicker, if the court gave permission under rule 12.4 (1) for notice of a meeting to be given otherwise in writing, CPR Part 6 would not apply.

There is a further reason why I should in any case be reluctant to depart from the earlier decisions. The incorporation of CPR Part 6 can properly be seen as introducing a desirable degree of flexibility. It permits service by document exchange, fax or other means of electronic communication, subject to the relevant practice direction. The court’s powers to permit service by an alternative method or to dispense with service under CPR rule 6.8 could prove useful in particular circumstances. The power to order alternative methods of service would be particularly important in the event of any prolonged interruption in postal services. Mr Snowden submitted that the relevant provisions of the Insolvency Rules are, with the exception of the requirement for writing in rule 12.4, permissive only, so notice of meetings of creditors may be given in any manner which is appropriate in the circumstances. I do not accept this submission. One of the purposes of the Insolvency Rules is to make provision as to the manner of summoning a meeting: Insolvency Act sch. 8 para. 9(a). The Rules do not contain an express provision with the breadth suggested by Mr Snowden and it cannot in my view be regarded as a necessary implication.

Accordingly, I do not accept the general submission that rules 12.10 and 12.11 are not applicable to notices of meetings. For the reasons given above, I consider that they are applicable, although I accept that some of the provisions of Part 6 are by their terms inapplicable to notices of meetings and the remaining provisions must be read with necessary modifications. As it happens, this conclusion will not cause the administrators any difficulties, because their proposals for convening the meetings comply with the requirements of CPR Part 6.

It does not follow that rule 12.12 applies to notices of meetings. I am satisfied that it does not do so for the following reasons. First, provision is made in the Civil Procedure Rules for the permission of the court to be required for service of documents in court proceedings out of the jurisdiction, because at common law the court has no jurisdiction over a party who is not served within England and Wales or does not submit to the jurisdiction of the court and because service abroad involves an interference with the sovereignty of other countries. The giving of notice of a meeting, even if the meeting is convened under a statutory provision, involves no such considerations. Secondly, section 3(3) of the Insolvency Act and other provisions in the Act dealing with meetings require notice to be given to all creditors known to those convening the meeting. These provisions clearly apply as much to foreign creditors as to domestic creditors. What point, therefore, would be served by an application to the court for leave to serve the notice: the court could not refuse leave. Thirdly, the very idea that giving notice of meetings should require the prior leave of the court, given on an application supported by an affidavit, is absurd. Fourthly, the terms of rule 12.12 contemplate court proceedings. Sub-rule (1) excludes CPR rules 6.17 to 6.35 which are concerned with the service of court process out of the jurisdiction. Sub-rule (2) is concerned with bankruptcy petitions. Sub-rule (3) is concerned with “any process or order of the court, or other document”. In context, it is right in my view to construe other documents as confined, like process or order of the court, to documents arising in court proceedings. The only reason why the service of documents in court proceedings is dealt with in Part 12, rather than Part 7, of the Insolvency Rules is that the other provisions of CPR Part 6 are incorporated by rule 12.11. It is for some of the above reasons that CPR rule 6.5 (1) is also inapplicable to non-litigious notices and other documents given or served pursuant to the Insolvency Act or the Insolvency Rules.

Accordingly, I am satisfied that there is no requirement for an application to the court, or for the permission of the court, in order for notice of the CVA meetings to be given to creditors outside England and Wales.

The administrators have set out in evidence the detailed steps which they have taken to identify actual and potential claimants. It is their concern that notice of the meetings should reach as many claimants as possible. Known creditors are those who appear from the companies’ records, including statements of affairs, and the administrators’ own records. They also include those who have filed claims in the Chapter 11 proceedings, requested a plan solicitation package or voted on the US plan of reorganisation. These are all persons to whom the administrators are required to give notice under section 3(3), assuming that an address is known for them, which may include their last known address: rule 12.10 (1A). Because CVAs will compromise not only known claims but all future claims arising out of exposure to asbestos before that date, there are many potential and unknown claims. The administrators will use employment and pension records and a programmes of advertisements and communications with trade unions, solicitors, asbestos victims support group and other interested parties, as described in the evidence, to ensure that notice of the CVA meetings is given a widely as possible. I am satisfied on the evidence that the administrators are taking all steps reasonably open to them not only to give notice as required by section 3(3) of the Insolvency Act 1986 but to give notice to as many potential and unknown claimants as possible.

There are two particular issues which have been raised by the administrators as regards notice to creditors. The first relates to actual claimants who have instructed solicitors to act for them. Both before and during the administration, the companies and the administrators have been notified by solicitors that they are instructed on behalf of claimants and in other cases claimants have notified them of their solicitors. The administrators have written to all solicitors, requesting confirmation of the claimants for whom they act and that they have authority to receive the CVA documentation. Where such confirmation is provided, the administrators intend to send notice of the meetings and accompanying documentation to those solicitors, rather than to the claimants. This appears to be a sensible course, particularly as on a number of occasions the administrators have been told by claimants, their solicitors and creditor committees that at least some claimants with asbestos-related conditions find it distressing to receive documentation from the administrators and prefer it to be sent to their solicitors.

Express provision is made in the Insolvency Rules to deal with this situation. Rule 13.4 provides:

“Where under the Act or the Rules a notice or other document is required or authorised to be given to a person, it may, if he has indicated that his solicitor is authorised to accept service on his behalf, be given instead to the solicitor.”

No possible difficulty arises where the claimant himself has notified the administrators that his solicitors are authorised to receive documents. The issue raised is whether the administrators can rely on rule 13.4 where it is the solicitors who provided confirmation of their authority. Provided the solicitors in fact had actual authority from their clients, there is in my view no difficulty. As a general proposition, a person may act or communicate in a way which is binding on him either personally or through an agent. I can see no reason why rule 13.4 should be read as excluding this general rule or why the agent should not be the solicitor. A problem will arise if the solicitor did not in fact have authority to receive the CVA documents. His representation to the administrators will not provide the necessary authority and reliance could not be placed on rule 13.4.

The chances of a difficulty in fact arising are, one would think, very small. It is highly unlikely that a solicitor will represent himself to have authority when he does not, even as a result of a mistake. If this situation were to arise, there would have been no deliberate failure by the administrators to give notice of the meeting to the claimant, and it would not in my judgment invalidate the meeting. It would be an irregularity in relation to the meeting which, if material on the particular facts, would provide a ground of challenge under section 6, entitling the court to exercise its discretionary powers under section 6 (4).

The administrators also propose to send one notice and one set of the accompanying documentation to each firm of solicitors, although they may be acting for more than one claimant. In my view, this complies with the requirements of the Rules provided, as the administrators propose, additional copies for each of their clients will be supplied on request.

More generally, the administrators will send notices and the other documents by e-mail or fax, with the prior consent of the recipient. This accords with CPR Part 6. Even if CPR Part 6 did not apply, it would in my view be permissible: it cannot be supposed that the Insolvency Rules require personal or postal delivery, if the parties involved consent to delivery in some other form: cf Kenneth Allison Ltd v A.E Limehouse & Co [1992] 2 AC 105.

A second particular issue arises in relation to US personal injury claimants. It should be noted that although they will not participate in the CVAs, and will instead have their claims channelled to an asbestos trust established in the Chapter 11 proceedings, they will be entitled to vote at the CVA meetings. The names and addresses of these claimants are not known to the administrators, but they know the firms of US lawyers acting for them. They are not therefore creditors to whom notice is required to be given by section 3(3) of the Insolvency Act. An issue might arise as to the steps, if any, which the administrators should take to identify these claimants. However, in relation to these claimants, the US court has by an order authorised the debtor companies subject to the Chapter 11 proceedings to send all notices and other communications to counsel of record for those claimants and dispensed with any requirement to send them directly to the claimants. In those circumstances, it would be inappropriate to require the administrators to investigate the identities of individual US claimants. The right course, as the administrators propose, is to send one set of the relevant documents to each firm of lawyers.

A separate point raised was the period of notice for the meetings. The minimum statutory period is 14 days: rule 1.11(1)(a). In view of the complexity of the proposals and their very unusual nature, requiring present and potential future personal injuries claimants to assess their actual or potential claims, the administrators proposed a larger period of notice. In my view, a period of not less than 6 weeks should be allowed, to which neither the administrators nor the plan proponents objected.

I will hear counsel on the precise terms of the directions.