INSOLVENCY — Administration order — Public private partnership companies — Transfer scheme — Consent — Meaning of “other appointee” for the purposes of Schedule 15 to the Greater London Authority Act 1999

In re Metronet Rail BCV Ltd (in public private partnership administration) and In re Metronet Rail SSL Ltd (in public private partnership administration) [2007] EWHC 2697 (Ch)

Ch D: Patten J: 23 November 2007

The only companies that could fall within the term “other appointee”, as contained in Sch 15 to the Greater London Authority Act 1999, were public private partnership companies in whose favour there was under a scheme the transfer of property, rights and liabilities from an existing appointee.

Patten J so held in the Chancery Division when deciding, on an application of the administrators of two public private partnership companies, Metronet Rail BCV Ltd and Metronet Rail SSL Ltd, whether the words “other appointee” in Sch 15 to the Greater London Authority Act 1999 should be construed as meaning any public private partnership company other than the existing appointee or the new appointee, as defined in para 1(2) of Sch 15, which might be affected by a proposed transfer scheme or whether those words had some other meaning and if so what.

A public private partnership administration order had been made against the two companies pursuant to s 220 of the Act. The administrators proposed to transfer the undertaking of the companies, being the “existing appointees”, to other companies, being the “new appointees”, as a going concern by making a transfer scheme under the powers contained in Sch 15 of the Act by which some or all of the property, rights and liabilities of the companies would be transferred. The power to make the scheme was dependant on the consent, not only of the existing appointee and the new appointee but also of any “other appointee” at least in relation to matters affecting it. The issue was whether the class of “other appointee” was intended to extend to companies in the position of the respondents who were either purely creditors for pre-administration debts or continued in a contractual or other relationship that fell within the scope of the “property, rights and liabilities” whose transfer was part of the scheme.

PATTEN J said that in order to fall within the class of “other appointee” the company must have transferred to it property, rights and liabilities of the existing appointee in exercise of the powers contained in paragraphs 2 and 3 of Sch 15. The only companies that could fall within that term were public private partnership companies in whose favour there was under the scheme a transfer of property, rights and liabilities from the existing appointee in exercise of the powers contained in paras 2(1) and 3 of Sch 15. No other companies, public private partnership or otherwise, were under para 1(2) of Sch 15 affected by the proposal.

Appearances: Gabriel Moss QC and David Allison (CMS Cameron McKenna LLP) for the administrators. William Trower QC and Tom Smith (Herbert Smith LLP) for Transport for London and London Underground Ltd. Mark Phillips QC (Allen & Overy LLP) for Balfour Beatty plc. Antony Zacaroli QC and Simon Johnson (Denton Wilde Sapte) for Thames Water Ltd and EDF Energy plc. Simon Mortimore QC (Shadbolt & Co LLP) for Trans4M Ltd. Richard Adkins QC (Norton Rose LLP) for Bombardier Transportation (Holding) UK Ltd. Richard Sheldon QC (Taylor Wessing LLP) for Metronet Rail BCV Finance plc and Metronet Rail SSL Finance plc.

Reported by: Nicola Berridge, solicitor