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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Masters & Anor v Furber [2013] EWHC 3023 (Ch) (30 August 2013)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2013/3023.html
Cite as: [2013] EWHC 3023 (Ch)
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CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Priory Courts 33 Bull Street Birmingham B4 6DS |
||
B e f o r e :
____________________
| (1) PAUL DAVID MASTERS | ||
| (2) CONRAD ALAN BEIGHTON | Applicants | |
| - and - | ||
| WILLIAM JAMES FURBER | Respondent |
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(Official Court Reporters and Tape Transcribers)
1st Floor, Paddington House, New Road, Kidderminster DY10 1AL
Tel. 01562 60921
THE RESPONDENT appeared in Person (assisted by Mr Hollis)
____________________
Crown Copyright ©
- This is an application by the joint supervisors of an individual voluntary arrangement, Mr Masters and Mr Beighton, concerning William James Furber. Mr Furber is 75 years of age and has demonstrated himself to be a gentleman of great dignity and sincerity. Unfortunately, his attitude towards this application is wholly misconceived.
- The terms of the voluntary arrangement were duly proposed by Mr Furber, he says under pressure, and approved by creditors with modifications. As Mr Morgan points out, that creates a statutory contract which the supervisors are to implement and supervise: see section 260 of the Insolvency Act 1986; Re Britannia Heat [2007] BCC 470.
- In order to assist with the smooth functioning of the voluntary arrangement, a power of attorney was granted to the supervisors to enable them to deal with Mr Furber's assets. Under the terms of that power of attorney it was provided, amongst many other things, that Mr Furber undertook to "act promptly as my attorneys may direct with regard to any rights exercisable or anything received by me in my capacity as registered holder of any of the assets." Thus there is a direct contractual undertaking given by deed which the supervisors are entitled to enforce. That was dated 19th April 2013 and was executed by Mr Furber in the presence of a witness, a Maxine Barton, who I understand to be one of his employees.
- Although the particular undertaking refers to his capacity as registered holder of any of the assets, it is clear from the schedule of assets which is embodied within the power of attorney that there are included old motorbikes and other vehicles of various ages in various states of repair. There is also a reference to "all other property of whatever nature and description." Thus the assets are not merely assets of the kind which would require registration. It seems to me that the reference to Mr Furber as registered holder must only relate to those assets where he is registered, but takes nothing away from the generality of the undertaking to act promptly with regards to any rights exercisable by him over his assets.
- Within the IVA there are specifically included various vehicles which were valued for the purpose of the arrangement at £30,000. I infer that that valuation, though it is signed by Mr Furber, did not emanate from him because the vehicles have now been sold by agents instructed by the supervisors at an online auction for a sum in excess of that, net of expenses, and Mr Furber complains that the price was too low.
- Mr Furber has assets with a total value upwards of £4 million, which is far more than is needed to pay all his creditors. But at the time of the arrangement he did not have current assets in liquid form sufficient to enable him to pay his creditors. That remains the position.
- A number of purchasers of the vehicles have paid sums amounting to £27,670 to the auctioneers. There will be others who have at the moment withheld payment because the vehicles have not been delivered or made available for collection. Under the auction terms, the collection date was 21st August 2013 at Preece Industrial Estate, Whitchurch, Shropshire. That is another asset of Mr Furber. Mr Furber refused to allow the vehicles to be collected by the successful bidders and continues to refuse to do so. He considers that he has been the victim of a stitch-up. He entered into an IVA under pressure, he says, from the then proposed supervisors. He also says that the vehicles were sold at an undervalue and wishes to withdraw from the entire sale process.
- In one sense, that is his decision, to be visited with such consequences as follow, under the IVA or otherwise. The IVA contains default provisions. The supervisors are bound to serve a notice and if there is continuing default after one month they then report back to the creditors who decide what is to be done. One consequence is that the arrangement is terminated and anyone is free to present a petition for bankruptcy. If Mr Furber wishes to go down that route, it might be said that that is his choice.
- However, there is also the question of enforcement of the statutory contract, buttressed in this case by the power of attorney which gives the supervisors direct rights. The supervisors, as they were bound to do, served the default notice but also made it plain that they required immediate compliance with Mr Furber's obligations under the IVA and power of attorney. It seems to me that, in determining this application, I must have regard not only to Mr Furber's interests but to the interests of his creditors. As Mr Morgan points out, unless the process of disposal of the vehicles is concluded, there is a risk that the successful bidders will withdraw their bids and thereafter demand return of all monies paid, as well as possibly seeking damages. Ironically, if, as Mr Furber says, the value of the vehicles was higher than the sum that has been achieved by the online auction process then there will be a claim for loss of bargain by the successful bidders.
- It is manifest, in my judgment, that the return of monies to bidders would not be in the interests of the arrangement creditors. Mr Furber would, moreover, be exposed to damages claims. That, as I say, is his business in one sense, but might result in new claims leading to enforcement action outside the arrangement. Mr Furber's attitude and actions (or inactions) are producing delay in realisations. He says he is worried about what the supervisors will do with the monies. What they must do is apply them for the purposes of the arrangement, and there is no sustainable suggestion that they will not do that. They will, of course, be incurring fees, but that was always the case with the arrangement.
- In my judgment, requiring Mr Furber to comply with his obligations under the IVA and the power of attorney will be in the best interests of his creditors generally and maintain the authority of the supervisors who are effectively, if not in law, officers of the court. I therefore propose to accede to the application and will require Mr Furber (in terms which I will discuss with counsel) to allow the collection of the vehicles. He should understand that if the order is disobeyed, the consequences could be very serious indeed, including committal to prison for contempt of court. I say that not by way of threat but so that he understands unambiguously what the consequences of failure to comply with the court order are.
JUDGE PURLE: