Part 1 – Courts dealing with insolvency proceedings
In the High Court of Justice the courts dealing with insolvency are called the Companies Court and Bankruptcy Court and are part of the Chancery Division. The Chancery Division is one of three parts of the High Court of Justice, the others being the Queen’s Bench Division and the Family Division. Insolvencies not heard in the High Court of Justice (referred to hereafter as the High Court) are dealt with by the County Court (see paragraph 19.3). Annex A provides details of the judiciary sitting in these courts and how they should be addressed.
On 22 April 2014 the 173 local County Courts were amalgamated into one single County Court [Note 1] with 173 hearing centres. The hearing centres are referred to as The County Court at, for example, Sunderland. On the making of a winding-up or bankruptcy court the case is allocated to the appropriate hearing centre. If the case needs to be “sent” to another hearing centre this will be achieved by an administrative procedure rather than the previous judicial procedure called a “transfer” [Note 2]. Cases made in the High Court will still be “transferred” to the single County Court. In practice the official receiver should see little change as to the location where petitions are presented and hearings take place.
The High Court has the jurisdiction to wind up any company registered in England and Wales [Note 3]. Where the company’s paid up share capital is less than £120,000 the County Court has concurrent jurisdiction with the High Court [Note 4]. The County Court in England and Wales has winding-up jurisdiction and, consequently, all the powers of the High Court [Note 5].
A company may change its registered office prior to the presentation of a winding-up petition. In these circumstances the address where the company has spent longest as its registered office in the 6 months preceding the presentation of the winding-up petition will determine the hearing centre in which it is wound up [Note 6]. A winding-up order remains valid if the proceedings were commenced in the wrong court [Note 7].
The High Court and the County Court have the power to issue insolvency proceedings against an individual [Note 8]. The County Court in relation to insolvency, has all the powers of the High Court [Note 9]. The High Court exercises jurisdiction in insolvencies allocated to the London insolvency district. Each hearing centre has jurisdiction over proceedings allocated to the insolvency district of that centre [Note 10]. Bankruptcy proceedings may be transferred from the High Court to the County Court or sent from one hearing centre to another (see Chapter 7 for further details) [Note 11].
Every bankruptcy is under the general control of the High Court or the County Court subject to the relevant provisions of the Insolvency Act 1986. The court has the power to decide questions of priorities and other questions, whether of law or fact, in any bankruptcy [Note 12].
The Lord Chancellor may, by statutory instrument, change the area covered by the London insolvency district (see paragraph 45.73 for further information). The Lord Chancellor may, by statutory instrument, change the insolvency district of a hearing centre and/or direct whether a particular hearing centre has insolvency jurisdiction [Note 13].