High Court refuses to cure defective MVL solvency declaration

The High Court has ruled that a company intended for a members’ voluntary liquidation entered creditors’ voluntary liquidation instead because one director made the statutory declaration of solvency before a person who was not authorised to receive it.

ICC Judge Agnello KC held that the defect was fundamental and could not be waived under rule 12.64 of the Insolvency (England and Wales) Rules 2016, despite clear evidence that Greenbank Technology Ltd was solvent and that every participant intended the winding-up to proceed as an MVL.

Greenbank, a manufacturer of can-making machinery and thermal process engineering equipment, was placed into voluntary liquidation in October 2025 as part of a group rationalisation. Its business and assets had been transferred to its parent, its liabilities discharged, and its balance sheet reduced to £1 in assets and no liabilities.

The company’s two directors signed a declaration of solvency under section 89 of the Insolvency Act 1986. One director made his declaration before a notary, but the other made it by video conference before a person described as a support worker, who was not authorised under the Statutory Declarations Act 1835 to administer an oath or receive a statutory declaration.

Companies House refused to register the declaration as valid. Under section 90 of the Insolvency Act, a voluntary winding-up is an MVL only where a valid section 89 declaration has been made. Otherwise, it is a CVL.

The joint liquidators (Emma Cray and Jen Whatcott of PwC), Greenbank and its sole shareholder asked the Court to waive the defect and permit the liquidation to continue as an MVL. Alternatively, they sought rescission of the CVL or an unlimited stay.

The Court rejected the argument that the failure was merely a formal irregularity. The requirement that a declaration be made before an authorised person was a fundamental part of the section 89 regime, particularly because directors can face criminal sanctions where a solvency declaration is made without reasonable grounds.

Judge Agnello distinguished cases in which courts had accepted declarations made remotely before an authorised person. A video declaration before a properly qualified person may involve a waivable procedural defect, she said, but a document signed before an unqualified person is not a statutory declaration at all. It is simply a witnessed signature.

The Court also held that it had no jurisdiction to rescind the CVL. Rule 12.59 permits the Court to review, rescind or vary its own orders, but Greenbank’s voluntary liquidation resulted from a shareholder resolution rather than a court order. Section 112 of the Insolvency Act did not create a separate power to undo it.

The Court did, however, grant a stay (without a time limit) of the CVL. It accepted that all parties had intended to place the solvent company into an MVL and preferred a stayed liquidation to the continuation of an active CVL. The judge was not persuaded that Greenbank could enter a new MVL while the existing liquidation remained stayed.

Read the decision here.

Matthew Abraham and Angus Groom of South Square (instructed by Faegre Drinker) acted for the applicants.