HNW Lending Ltd v Registrar of Companies for Northern Ireland & Ors

On 11 July 2024 Larne Farms Ltd gave a charge to NW Lending Ltd to secure a loan of £500,000. The loan was to be secured against properties owned by both LFL and a connected company, APD, so two separate applications for registration were required. The applicant’s solicitors prepared both and sent them to Companies House by post on 22 July 2024. Companies House accepted the application relating to the APD charge, which was duly registered, but it rejected the application for registration of the LFL charge, apparently, as a result of a “straightforward tick box” problem on the form which solicitors said had been swiftly corrected before returning the form to Companies House on 30 July 2024 by first-class post. But the solicitors, it seems, heard nothing further from Companies House and assumed (wrongly, as it transpired) that registration had been effected: in fact Companies House had also rejected their second application.

On 8 April 2025 a winding up petition was presented against LFL, and a winding up order was made on 29 May 2025. The applicant contended before Master Kelly that it had been unaware of the fact that its charge had not been registered until it received a letter of 6 August 2025 from solicitors acting for LFL’s liquidator. The applicant’s solicitors maintained that they too had been unaware that the amended application had been rejected. The master thought, “[I]t may…be readily inferred from this application that it was because the amended application was delivered to Companies House outside the prescribed period.”

The lender, applied under s 859F Companies Act 2006 to extend time in which to register the charge, the prescribed 21 days for registration having expired. That provision gives the court a discretionary power to extend the time for delivery of a charge subject to certain requirements: that the failure to register within time was accidental or due to inadvertence or to some other sufficient cause; or is not of a nature to prejudice the position of creditors or shareholders of the company; or that on other grounds it is just and equitable to grant relief (s 859F(2)).

In this case the application was only made on 11 September 2025. However, as the master noted,

“The critical feature of the present case is not the length of the delay, but what occurred in the interim: during the period of non-registration, the chargor company was wound up by order of the court and entered liquidation. The unregistered charge is thus void as against the liquidator by virtue of section 859H (3) of the Act.”

In para 12 of her judgment the master identified the key issue in the following terms: the legislation did not distinguish between an application to extend time made before liquidation and one made after liquidation. “However,” as she went on to observe, “the legal consequences are materially different. Once liquidation intervenes, the charge is void by operation of law as against the liquidator and the company’s creditors. In those circumstances, any order extending time for registration would not merely regularise a procedural default; it would alter the substantive legal effect of section 859H(3). Thus, the question the court now has to decide is the question of whether on the evidence it is just and equitable to grant the relief sought. This necessarily involves looking at the application of sections 859A,F & H to the applicant’s case, and the transformative effect of liquidation itself.”

The master accepted that, in principle, relief could be granted, but decided it should not be in the circumstances of the case before her, where the applicant asserted, but could not demonstrate, that no prejudice would arise.

“ The commencement of liquidation fundamentally changes the legal landscape within which an application to extend time for registration of a charge falls to be determined. The interaction between sections 859F and 859H is central to this application and, in my view, is fatal to the applicant’s position as it directly informs the exercise of the court’s discretion and the question of whether it is just and equitable to grant relief. The charge is void as against the liquidator and the applicant has provided no evidence of exceptional circumstances which would justify the court granting the relief sought.”

The delay was not, in her view, a short or technical default capable of being explained away without consequence; in those circumstances the omission to register could not be characterised as merely accidental or inadvertent so as to justify granting relief; nor could it be said that no prejudice would arise to creditors or shareholders, since liquidation had already fixed the rights and priorities of creditors within the statutory insolvency regime, and “any extension of time would disturb that settled position by elevating what is presently void as against the liquidator and creditors into an effective security.”

As no exceptional circumstances had been demonstrated which would justify intervention after liquidation and there was no separate basis on which it could properly be said to be just and equitable to grant relief the application was dismissed.

This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.

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