Part 4 – Applications to court within the insolvency proceedings
The official receiver in the administration of a case may need to make an application to court for a court order or for permission to pursue a course of action. The majority of such applications will be within the insolvency proceedings. Many of these applications are dealt with in separate chapters of this manual, for example, rights of action Chapters 31.9 and 31.9A, discharge Chapter 22, an income payments order Chapter 31.7, an application for a public examination Chapter 14, an application for a charging order Part 8 of Chapter 31.3 and an application for a private examination Chapter 23. However not all applications to court made by the official receiver are within the insolvency proceedings, for example, an application to restore the company to the register (see Chapter 38). Further information on making an application outside of the insolvency proceedings is provided in Part 5.
The Insolvency Act 1986 and Insolvency Rules 1986 provide guidance on making applications, including those applications requiring a witness statement or report. Chapter 1 of Part 7 of the Insolvency Rules 1986 deals with the practice and procedure on applications to court. The only exceptions being an application for an administration order, a petition for a winding-up order and a bankruptcy petition [Note 1].
All applications must be in writing and on Form 7.1A. The application shall state:
Every application must be authenticated by the applicant where he/she is acting in person, or his/her solicitor, where he/she is not acting in person [Note 3].
Where the Insolvency Act 1986 or Insolvency Rules require evidence to be provided this may be by witness statement or report unless the court directs otherwise [Note 4]. Depending on the nature of the application the witness statement or report would cover the background to the case, any relevant facts and the reason for the application, etc. Where a person is unable to attend court his/her witness statement or report must not be used in evidence without the leave of the court [Note 5].
The application on Form 7.1A must be filed in court (see paragraph 19.42) together with one copy (to be retained) and a number of additional copies equal to the number of people to be served [Note 6]. The applicant should serve a sealed copy of the application, endorsed with the venue (time, date and place) of the hearing, on the named respondent or respondents unless the court otherwise directs, at least 14 days before the date of the hearing [Note 7]. The court may order that persons other than the respondent be served with the application or that notice to any person be dispensed with [Note 8]. An application where notice is given is referred to as an “application on notice”.
Where the Insolvency Act or Rules do not require service of the application on, or notice of it to be given to, any person, the court may hear the “application without notice” (formerly called ex parte) [Note 9]. The court will usually hear matters of an administrative nature or as a matter of urgency (see paragraph 19.45) without notice being given, for example an application for an amended descriptions and interim suspension of discharge. Further information on applications without notice outside of the insolvency proceedings are provided in paragraphs 19.60 to 19.61.
Where the official receiver makes an application without notice (see paragraph 19.39) he/she owes a duty to the court to disclose all matters relevant to the application, including any matters adverse to it. Failure to comply with this duty may result in the order being set aside.
A without notice order, by its nature, is a provisional order made by the judge on the basis of evidence and submissions by one side only. Where the other side provides evidence and/or argument against the provisional order the judge may discharge or vary his/her original order as he/she is not hearing an appeal. Such an application must be made within 7 days after the date the order was served on the person applying [Note 10].
A number of hearing centres are prepared to accept the filing of electronic applications. The official receiver should contact all their local hearing centres and obtain confirmation that the electronic filing of applications is acceptable. Where the hearing centre is not prepared to accept electronic filing the application should be made by post. Further information is contained in an article entitled “Courts Electronic Contact”, which is available here.
The court must fix a venue for an application to be heard unless:
“Venue” means the time, date and place of the proceedings or attendance before the court [Note 12].
Unless the Act or Rules say otherwise or it is urgent an application must normally be served on the named respondent or respondents at least 14 days before the date fixed for the hearing [Note 13]. Further details can be found in paragraphs 19.39 and 19.45.
The court may, in matters of urgency, hear an application immediately without prejudice to its general power to extend or shorten any time limits. The court may hear the application:
Any urgent application may be heard with conditions as to the filing or service of documents and the carrying out of other formalities as the court thinks fit [Note 14]. The official receiver, for example, may make an urgent application to suspend the bankrupt’s discharge where he/she fails to provide information as to his/her current income and expenditure.
Unless the court directs otherwise the hearing must be in open court [Note 15]. In the County Court the application must be made to the district judge in the appropriate hearing centre (see paragraph 19.3) unless a direction to the contrary has been made or it is not within the district judge’s power to make the required order [Note 16]. The district judge may refer to the judge any matter which he/she feels appropriate. The judge may deal with the matter or refer it back to the district judge with such directions as he/she thinks fit [Note 17]. In the High Court the application must be made to the registrar unless a direction to the contrary has been made or it is not within the registrar’s power to make the required order [Note 18]. The registrar, like a district judge, may refer any matter that he/she feels appropriate to the judge. The judge may deal with the matter or refer it back to the registrar with such directions as he/she thinks fit [Note 19].
The official receiver may have to deal with court proceedings and orders against the property of an insolvent, for example, attachment of earnings orders, third party debt orders (previously called garnishee orders), charging orders, search orders (previously called Anton Pillar orders), confiscation orders, etc. Part 6 of Chapter 9 provides guidance on what these proceedings involve and the appropriate action to be taken by the official receiver.
The official receiver may apply to the court for directions in any matter arising in the insolvency proceedings [Note 20]. This is a wide ranging power and the official receiver should only use it when the court’s endorsement of a course of action is required or where the individual circumstances of the case are out of the ordinary.
An application to the court for directions by the official receiver must contain the information contained in paragraph 19.36. In addition the application should outline the action the official receiver considers appropriate in the circumstances. The court should not be presented with an application which passes the duty to make a decision onto the court. The official receiver should also be aware that the costs of a third party attending the hearing may be ordered to be paid out of the insolvency estate.
An application to court for directions may be made without notice (see paragraphs 19.39 to 19.41). The official receiver should be aware that the court will not direct him/her to act contrary to the interests of another party unless that party has had the opportunity of being heard. Where the official receiver makes an application for directions without notice he/she is expected to present all the facts in the matter to the court, including the effect the directions may have on third parties. Where the official receiver is aware of third parties who have an interest in the directions being sought he/she should serve notice on those parties to allow them to attend the hearing and make a submission, or submissions, to the court. It is extremely unlikely that the court would make an order for directions unless the third parties have been given notice.
Any party to the insolvency proceedings may apply to the court for an order:
An application under this rule may be made without notice being served on any other party (see paragraphs 19.39 to 19.41).
Under the CPR the court has a number of ways of dealing with an application, including consent orders, interim injunctions, injunctions, Tomlin orders etc. Further details are contained in paragraphs 19.71 to 19.79.
The CPR applies where the official receiver wishes to vacate an application. Further details are provided in paragraphs 19.80 to 19.81.