June 2008
Part 6 Companies – Rescission / recall of winding-up order
6.83 Rescission or recall of winding-up order
(Amended December 2010)
Any application for the rescission of a winding-up order should be made within five business days of the date of the order (seven days for pre 6 April 2010 petition cases) although the court may exercise its discretion to hear such applications after this period has elapsed. [Note 1] Where such an application is made, the official receiver should consider if there are any facts or circumstances which he/she should report to the court. In particular, the official receiver should draw the court’s attention to any failure to co-operate, non disclosure of assets [Note 2] and to any debts due under the Employment Rights legislation (see paragraph 6A.21).
In the High Court the practice is that the court’s attention is drawn to defaults in filing statutory accounts and annual returns with the Registrar of Companies so that the appropriate undertakings can be sought from the directors or their legal representatives where appropriate (see paragraph 6.73 regarding the fees to be charged.) Over a number of years the Companies Court has used the rescission/recall provisions or powers to withdraw winding-up orders in late payment cases. This is a convenient way in which to deal with this situation in preference to the more cumbersome stay procedure.
6.85 Representation at High Court hearings
(Amended December 2010)
Representation of regional official receivers at rescission hearings in the High Court is dealt with via a monthly rota system shared between London A, B and PIU. The senior office manager of London A or B will be able to advise which London official receiver will be attending that month, contact details as at December 2010 are:
The official receiver should provide information to the relevant London official receiver, including a cost calculation and any other information which he/she considers relevant to the application.
6.86 Oral court hearings where initial application for permission to apply for rescission or recall is refused
(Amended December 2010)
Where an application for permission to rescind or recall the winding-up order is initially refused on paper, the court may offer the applicant an oral court hearing. The official receiver and petitioner may be invited to attend such a hearing to re-consider the application. The official receiver should consider attending the hearing in case he/she can assist the court. Should the permission to apply for rescission or recall of the winding-up order be granted by the court and the rescission/recalll is subsequently successful, the official receiver should seek his/her costs incurred in the liquidation proceedings to date.
Following the decision in re Calmex Ltd [1988] 4 BCC 761, the Registrar of Companies has no duty to retain a winding-up order entered in his/her records which the court has declared to be a nullity. Whilst the court may sometimes provide copy orders, it remains the applicant’s obligation in each case to provide a sealed order to the official receiver within a reasonable time following the rescission hearing. The official receiver should on receipt of this order forward a copy of the order to the Registrar of Companies.
6.88 Fees where winding-up order made before 1 April 2004
The official receiver must estimate the total costs, fees and charges for an estate before the hearing and ensure that a cost calculation sheet is completed. It is important to anticipate how many times the official receiver will attend at, or report to, court concerning the application, so that the appropriate fee can be included in the estimate. Disbursements should be charged to the individual estate and sent to Estate Accounts Services (EAS) for payment. See Chapter 36 part 1 for further information on fees and disbursements.
6.89 Fees where winding-up order made on or after 1 April 2004
Following the introduction of the modernised financial regime under the Enterprise Act 2002, for cases where the winding-up order is made after 1 April 2004 the full administration fee (fee W1) should only be charged when it can reasonably be said that the official receiver has undertaken material work on a case. The official receiver's full administration fee should not be charged where, for example, he/she has not issued initial notices or committed other expenditure in the case. Where it is not justifiable to charge the full administration fee, a reduced fee could be charged with sanction of the court. The reduced administration fee could range between £0 and £2160 (i.e. the full administration fee level as at June 2008) according to the circumstances of the case. The official receiver should calculate the administration fee to be charged and then seek payment of that sum, requesting that the court orders the permitted level of administration fee to be reduced to the level calculated.
The amount of the maximum administration fee chargeable is regularly re-assessed.
6.90 Time and rate fees following rescission/recall (winding-up order made on or after 1 April 2004)
The administration fee payable to the official receiver on rescission/recall should be calculated by multiplying the time the official receiver and his/her staff have spent undertaking work by the hourly rates set out in the Insolvency (Amendment) Regulations 2004 [Note 3] (see Chapter 36 Annex E) and not on the administration fee (W1). The time and rate calculation should exclude VAT in this instance as it is being used as a guide where the administration fee is not chargeable to its full extent. There is no VAT on the administration fee.
If the full administration fee is not charged, the costs of disbursements (e.g. advertising costs, gazette, travel and subsistence) are not covered and should be charged separately when costs are sought. The official receiver should include in his/her calculation any costs paid centrally by Finance Section which are not charged directly to the estate.
Where the official receiver considers that the full administration fee should be charged it should be noted that the fee does not include the cost of any disbursements associated with the realisation of assets or the distribution of funds to creditors - these should be charged separately. On receipt of the monies the official receiver must pay the funds into the estate account. In order for the estate account to balance, the official receiver must authorize a payment to reimburse Finance Section. This instruction should be sent to EAS.
Where the winding-up order is rescinded and the petition dismissed, the deposit shall be repaid to the extent that it is not required for payment of the relevant administration fee unless the court orders otherwise, perhaps following an agreement between the parties.
See Chapter 36 part 1 for more information on fees and disbursements.
6.92 Notice to Estate Accounts Services (EAS)
August 2008
Following the upgrade of the LOLA menu function glm81 in July 2008, to facilitate the closure of the LOLA account or write off the debit balance, the official receiver is no longer required to send details of rescinded cases to EAS on the ‘Cases For Closure’ spreadsheet. See paragraph 6A.97 for full details on entering glm81 information.
[Back to Part 5 - Companies - Stay of winding up proceedings] [On to Chapter 6A - Annulment]