Time periods under the Insolvency Rules 2016

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david-menzies By David Menzies, ICAS Director of Insolvency

13 February 2017

This article forms part of a series looking at the significant changes to insolvency procedures being brought in from 6 April 2017 by The Insolvency (England & Wales) Rules 2016. 

In this article, David Menzies outlines the statutory interpretation of time periods.

While it may seem obvious what days and months are, in the land of insolvency legislation what seems obvious may be far from it. Schedule 5 details how time periods in the 2016 Rules are to be calculated.

Days

'days' are to be calculated in accordance with r2.8 of the Civil Procedures Rules 1998. So, days actually means ‘clear days’. This excludes the day the period starts and, if the period end is defined by an event, then the day of that event.

Example 1:

Where a liquidator is appointed by a court, then by r6.22(6)(b) the liquidator must advertise the appointment in accordance with the instructions of the court within 28 days. If the liquidator was appointed on 1 May 2017 then the latest date for the advert to appear would be 30 May 2017.

Example 2 (where period end is an event):

A person required to provide a statement of affairs by an administrator may request to be released from that requirement or to be provided with an extension of time, Where the administrator refuses such a request the person may apply to the court and where a hearing is to take place, r3.33(5) requires that the applicant must, at least 14 days before any hearing, deliver to the administrator a notice stating the venue with a copy of the application and of any evidence on which the applicant intends to rely.

If the court hearing was fixed for 17 May 2017 then the latest that the notice may be delivered to the administrator would be 1 May 2017.

Business day

'business day' is any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales. For corporate procedures under the Insolvency Act 1986 then business day will also exclude any day which is a bank holiday in Scotland. In calculating the periods then the application of Schedule 5 will still mean that ‘clear days’ should be used when calculating the relevant time period.

Example 3:

Rule 3.31(6) requires a Statement of Concurrence to be received by the administrator within 5 business days from the date which they received the Statement of Affairs. If the Statement of Affairs was received on Thursday 27 April 2017, with Monday 1 May 2017 being a bank holiday, the relevant person would have to deliver the Statement of Concurrence no later than Friday 5 May 2017.

Months

'months' are also defined in Schedule 5. The calculation of the period will depend upon whether there is a start and/or end of the period referred to. Where the start of a period is specified then the end of the relevant period will end on the same date in the relevant number of months referred to, or if there is not such a date then the date shall be the last day of the month.

If the end of the period is specified then the relevant period will begin on the same date in the relevant number of months referred to, or if there is not such a date then the date shall be the last day of the month.

Example 4:

Rule 2.41 requires a CVA Supervisor’s Report and accounts to be prepared for a period of 12 months commencing on the date the CVA was approved and delivered within a period of 2 months of the end of the 12 month period. Where the CVA was approved on 7 April 2017 then the first Report is prepared to 7 April 2018 and must be delivered no later than 7 June 2018.

Example 5:

Under the same rule, if the CVA was approved on 31 July 2017, the Report is prepared to 31 July 2018 and must be delivered no later than 30 September 2018.

Example 6:

Under Rule 3.23, the Notice of Intention to Appoint an administrator must state that the company has not been in administration, been subject to a CVA or being subject to a moratorium. If the Notice of Intention to Appoint is signed on 30 April 2017, then the relevant period would begin on 30 April 2016.

Weeks

'weeks' – although there are numerous periods which are referenced in weeks, the Rules do not define how they are to be calculated. We therefore suggest that the same approach is taken to weeks as is taken to 'months'. Where the start of a period is specified then the end of the relevant period will end on the same day in the relevant number of weeks referred to. If the end of the period is specified, then the relevant period will begin on the same day in the relevant number of weeks referred to.

Example 7:

Rule 8.5 requires the Statement of Affairs in an IVA to be made up to a date not earlier than 2 weeks before the date of the proposal. If the date of the proposal is Wednesday 21 June 2017 the date of the Statement of Affairs can be no earlier than Wednesday 7 June 2017.

Factor in delivery times

The 2016 Rules generally will require documents to be ‘delivered’ within a timescale. There does however remain a few occasions where a requirement is to ‘send’.

It is important to remember that the 2016 Rules contain provisions on when delivery is deemed to have occurred. Given that documents may be sent to recipients by a variety of methods (postal, personal service, email, website) then each delivery method has its own provisions. For example, first-class post and second-class post is deemed to have been delivered 2 and 4 business days after posting (r1.42), while electronic communication is deemed to have been delivered at 9am the business day following sending.

Deemed delivery timescales should therefore be factored into requirements. This is somewhat difficult given the variety of communication methods that could be in operation. Best advice is probably therefore always to factor into diaries the maximum delivery time under any method of communication that may be used.

Example 8:

Rule 2.41 requires a CVA Supervisor’s Report and accounts to be prepared for a period of 12 months commencing on the date the CVA was approved and delivered within a period of two months of the end of the 12-month period. Where the CVA was approved on 7 April 2017 then the first Report is prepared to 7 April 2018 and must be delivered no later than 7 June 2018. The report would have to be posted no later than 1 June 2017 to allow four business days deemed delivery timescale using second-class post.

Topics

  • Insolvency
  • Legislation

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