8. Appeals, stays and rescissions
Information on dealing with applications for appeal, stay or rescission of a bankruptcy order or winding-up order. Includes information on orders protecting persons at risk of violence.
8.1 Court’s power to review, rescind any order made
Every court with insolvency jurisdiction has the power to review, rescind or vary any order made in the exercise of that jurisdiction. This includes the right to appeal against any order of the court in winding-up or bankruptcy proceedings1.
The court can also order that any insolvency proceedings are stayed in whole or part as the court thinks fit. An application for a stay is likely to be made in connection with an appeal, rescission or annulment2 of the order.
The court has the power to stay or sist winding-up proceedings permanently or for a limited time3. As a winding-up order cannot be annulled a permanent stay of winding-up proceedings is sometimes seen as an alternative to annulment (but see rescissions below).
1. rule 12.59 (company); section 375 (bankruptcy)
2. see chapter 9
3. section 147
8.2 Application to the court
The official receiver is unlikely to be actively involved in any application, other than to secure the official receiver’s fees. The applicant is, generally, obliged to serve the official receiver with notice of the application and the official receiver will be expected to attend to assist the court. The official receiver should draw to the court’s attention any matters the official receiver considers to be relevant to the application.
An application for review, rescission or stay will usually be made to the court which made the original order.
An appeal, or application for leave to appeal. will be made to another (higher) court.
8.3 Representation
Where the official receiver is served with notice of an application for review or appeal the matter should be referred to the Senior Official Receiver’s team should the official receiver require guidance, or for permission, on instructing solicitors.
8.4 General procedure in appeals
Part 52 of the Civil Procedure Rules, including any attendant practice directions, apply to insolvency appeals unless dis-applied or inconsistent with the Act and the Rules.
The routes for appeal are set out in the Rules (company)1 and the Act (bankruptcy)2. Further direction is found in the Civil Procedure Rules (CPR) Practice Direction on Insolvency Proceedings.
1. rule 12.59(2)
2. section 375(2)
8.5 Appeal against a decision of the court
Any appeal is a true appeal, the purpose of which is to consider whether the jurisdiction of the court has been properly exercised and is not a re-hearing1. In other words, the applicant is saying that with all the facts before it the court made an incorrect decision (rather than simply a decision with which the applicant disagrees).
1. Re Gilmartin (a bankrupt) [1989] 1 W.L.R. 513
8.6 Permission to appeal
Except for an appeal against the decision of the adjudicator (see paragraph 8.6); permission is required for an appeal of any decision at first instance (i.e. the first hearing of matter by the court). This also applies where there is an appeal against a decision of a High Court judge to the Court of Appeal. Permission of the court may be given by the court which made the decision or the court which has jurisdiction to hear the appeal1.
1. rule 12.61; see also CPR Practice Direction on Insolvency Proceedings, para 18.
8.7 Appeal from decision of adjudicator (bankruptcy)
A refusal by the adjudicator to make a bankruptcy order is first subject to review by the adjudicator1. An appeal from the outcome of the adjudicator’s review is made to the court2. No prior application for permission to appeal is required3. The appellant is required to obtain from the adjudicator4:
- a copy of the original application reviewed by the adjudicator (including notice of refusal and notice confirming refusal).
- a record of the checks undertaken by the adjudicator5
- any additional information provided and available to the adjudicator when they refused to make the order6.
Prior to making a final decision the court may7
- direct that notice of the application be given to any interested person
- give permission to any interested person and the petitioner to file evidence;
- make any case management order to assist in determining whether to dismiss the application or make a bankruptcy order.
1. section 263N(3) and rule 10.43
2. section 263N(5) and rule 10.44; rule 10.48
3 CPR Practice Direction Insolvency Proceedings, para 17.2(1)
4. CPR Practice Direction Insolvency Proceedings, para 17.3(4)
5. rule 10.38
6. rule 10.39(3)
7. CPR Practice Direction Insolvency Proceedings, para 17.3(5)
8.8 Process of appeal
As the official receiver is unlikely to be actively involved in any appeal, other than to secure the official receiver’s fees. The process to appeal an order is not set out in detail here. Information on the process can be found on GOV.UK provided by HM Courts &Tribunals Service.
An appeal must usually be lodged within 21 days if the applicant is appealing against the decision of the county court or the High Court1.
The applicant’s notice of appeal will contain a request for leave to appeal, if leave has not already been given by the court which made the order2.
A respondent’s notice may be filed not later than 14 days after the respondent is made aware that the appellant has leave to appeal or the application for leave will be heard with the appeal3.
Unless otherwise ordered the appellant’s notice or applicant’s notice must be served within 7 days after it is filed4.
1. CPR Part 52, rule 52.12(2)
2. CPR Part 52, rule 52.12(1)
3. CPR Part 52, rule 52.13(5)
4. CPR Part 52, rule 52.13(6)
8.9 Appeal against the making of winding-up order or bankruptcy order
Notice of appeal does not operate to stay any part of the proceedings (see ‘Stays’ below). Where necessary the official receiver should remind the directors, the bankrupt or their solicitors, as appropriate, that
- the directors are no longer in control of the company
- the official receiver will take all steps necessary to secure the company’s property and records
- the official receiver will take all steps necessary to protect the bankruptcy estate and to act under the bankruptcy order.
The official receiver should normally attend the hearing to assist the court, bearing in mind that the appeal is between the company or bankrupt and the petitioner. Where the appeal is successful the official receiver should seek their costs.
8.10 Appeal pending
When an appeal hearing is pending the official receiver should, in general, not seek any order affecting the company or bankrupt which might prove to be undesirable or unnecessary if the appeal succeeds. For example, the official receiver would not seek a public examination1 an order for the seizure of bankrupt’s property2, or disclaimer of property3 (unless the OR is compelled to do so through a notice to elect4 (see chapter 42)). In assessing the situation, the official receiver should attempt to come to a balanced view as to whether the applicant is pursuing a series of largely vexatious or frivolous appeals (perhaps with similar applications) merely to delay the proceedings without offering any co-operation in the proceedings.
An order under appeal remains valid and in the case of the bankruptcy would leave the disabilities of a bankrupt and the duties of the official receiver unaffected over the period it takes to conclude the appeal. An appeal does not operate as a stay of any order or decision of the lower court, unless the appeal court or lower court orders otherwise5.
1. section 133 (company); section 290 (bankruptcy)
2. section 365
3. section 178 (company), section 315 (bankruptcy)
4. section 178(5) (company), section 316 (bankruptcy)
5. CPR Part 52, rule 52.16
8.11 Oral court hearings where initial application for leave to appeal is refused
An application for permission to appeal is usually first determined on paper. Where permission to appeal is initially refused, the court may offer the applicant an oral court hearing to re-consider the application for permission. The official receiver may be invited to attend the hearing and should consider attending the hearing if they can assist the court. The court can also order that the application for permission and, if granted, the appeal is considered at the same hearing.
8.12 Successful appeal
If an appeal against an insolvency order is successful, it is likely to lead to the rescission or permanent stay of a winding-up order or annulment of the bankruptcy order by the appellate court.
The official receiver should secure an order for the official receiver’s costs and a direction regarding the disposal of the petition deposit (see paragraph 8.44 or 9.44).
In bankruptcy the official receiver should ensure the order includes provision permitting the vacation of the registration of the petition and the bankruptcy order at the Land Charges Department1. (see also paragraph 9.61).
Although an appeal may be successful, there may be instances when the court does not dismiss the petition and it is then re-listed for hearing. The order should not contain a provision to vacate the bankruptcy petition. It is a matter for the former bankrupt to seek the vacation of any such entries and the official receiver should not get involved in this activity.
If the petition is re-listed for hearing the official receiver should still obtain an order for costs even if it is likely that another bankruptcy order will be made. The official receiver’s costs should be collected at each stage of the proceedings.
1. rule 10.137(h)(iii)
8.13 Appeal against judgment founding bankruptcy order
A bankrupt cannot pursue an appeal against a judgment debt on which the bankruptcy order was made1. Instead the right of action, in this case the right to challenge the debt included in the bankruptcy, vest in the trustee (see also chapter 37).
1. Heath v Tang and another and Stevens v Peacock and others (1993) 4 All ER 694
8.14 Appeal against decision of Secretary of State or official receiver
An appeal against a decision of the Secretary of State or official receiver must be made within 28 days of the notification of the decision1. Where the official receiver is served with notice of appeal in these circumstances the matter should be referred to the Senior Official Receiver’s team for permission and guidance on instructing solicitors.
1. rule 12.62
8.15 Appeal against decision to admit or reject a proof of debt
Any decision to admit or reject a proof of debt (either wholly or in part) may be subject to an appeal to the court by any creditor, contributory, or the bankrupt1. The appeal must be made within 21 days of the creditor receiving notice of the decision2 or not later than 21 days after the decision date3.
The convener or chair of a decision-making procedure is not personally liable for costs incurred by any person in relation to the appeal4.
The court is not restricted, in considering whether the convener or chair was right to admit or reject a proof for voting purposes, by the evidence available at the time and may consider any subsequent evidence that comes to light5.
Where on appeal the decision is reversed or varied, or a creditor’s vote is declared invalid, the court may order that a further decision procedure is initiated or make any such other order as it thinks just6.
1. rule 14.8(1) (in respect of a dividend); rule 15.35 (in respect of a decision-making procedure)
2. rule 14.7(2) and rule 14.8(2)
3. rule 15.35(4)
4. rule 15.35(6); (7)
5. Re a Company No.004539 of 1993 [1995] BCC 116
6. rule 15.35(3)
8.16 Appeals in bankruptcy by the Secretary of State
The Secretary of State may appeal against any order of the court made on an application to rescind or annul a bankruptcy order or for a bankrupt’s discharge1. Where the official receiver considers that an appeal should be lodged, they should report the facts to the Official Receiver’s team permission and guidance on instructing solicitors.
1. rule 12.60
8.17 Introduction
A stay ordered by the court will stop proceedings under a court order going forward, in whole or part, for a specified period or indefinitely. The court has a specific power to stay all or part of the proceedings in advance of an annulment hearing1 (see also paragraph 9.4). There is no other specific provision within the insolvency legislation to stay the bankruptcy proceedings. The court may stay proceedings under the Civil Procedure Rules 1998, which are applied to the Act and the Rules with any necessary modifications2 or under its inherent jurisdiction, a common law principle in the absence of a statutory power, to stay proceedings in whole or part if it appears just.
1. rule 10.135
2. rule 12.1
8.18 Time limit, link to impending application
Any stay should have a time limit restricted to the outcome of the impending application:- appeal, rescission or annulment.-
The official receiver should seek to ensure that any stay is not ‘free standing’ but is associated to the outcome of the impending application. If application has been made the stay should provide for a time limit of no more than 21 days to allow a proposed application to be made.
If the application is not within that time, with a request to extend the stay until the application is determined, the stay will expire.
The official receiver should also ensure the order of stay includes reference to a specific period (which may be until a specified date or event) during which the order will be in force.
8.19 A stay of advertisement
This is the simplest form of application which prevents notice of the order being given. A ‘stay of advert’ will prevent the official receiver from issuing any form of notification of the order1.
Where the official receiver receives notice of an intended application to court for a ‘stay of advert’, the official receiver may seek to limit the order to the suspension of the official receiver’s statutory duties to advertise. The effect of an order suspending action by the official receiver under these limited terms is not a ‘stay of advert’ generally but specifically limits the stay to withholding advertisement in the London Gazette, or in such (local) paper as the official receiver sees fit, giving notice of the order to the Land Registry or Companies House, or including the bankruptcy order on the individual insolvency register (IIR).
1. Re: A Company (No. 00687 of 1991) [1991] BCC 210
8.20 Court directions where assets at risk
Where the court grants a general ‘stay of advert’, requiring the official receiver to do nothing further to publicise the order (e.g. write to a third party), this may prevent the official carrying out their duties to secure and protect assets. In these circumstances if the official receiver is concerned assets are at risk or the essential administration of the case will be compromised, the official receiver may seek directions or request permission from the court to carry out specific enquiries. Such enquiries may include contacting third parties in relation to safeguarding assets or ascertaining liabilities.
8.21 Withholding the advert
Official receivers must have adequate procedures in place to ensure that they react correctly to notification of a stay of advert (particularly where this occurs as part of a stay of proceedings) to ensure that statutory notices are not issued, unless the deadline for cancelling the gazette notice has already passed, in contravention of that order and that registration of the bankruptcy order in the IIR is suspended. For more information on preventing publication of the insolvency order see chapter 4.
8.22 Duties of directors and bankrupts following a stay of advert
Directors and bankrupt remains under their statutory obligations to co-operate with the official receiver1 following a stay of advert.
The court may require and incorporate undertakings by the directors or the bankrupt into the order to ensure compliance. The High Court may do this by practice2 but in all cases the official receiver should ask for the undertakings to be included, as appropriate.
- give particulars of all banking accounts in the company or bankrupt’s name, or in which they have an interest, to the official receiver;
- submit to the official receiver for preliminary examination as reasonably required;
- lodge with the official receiver a statement of affairs, (if required)3; and
- do anything else which the official receiver may consider relevant to the particular case including, if appropriate, to give an undertaking to set down an application for rescission, annulment or an appeal against the order within a specified period of time.
1. section 235 (company); section 291(4) (bankruptcy)
2. following, Re Wigzell, ex parte Hart [1921] 2 KB 835
3. see chapter 18
8.23 Request to refrain from taking steps before court order made
The official receiver should not accede to any request to voluntarily refrain from advertising an order or from taking any other steps in the proceedings because of a stated intention to apply for a stay of advert or a rescission, annulment or appeal.
In the absence of a court order or service of formal application to the court matters should proceed as normal. There is rarely any merit in ‘unofficially’ restraining from taking proper action as this will often only lead to an impression that there is plenty of time to act. If the request is made by a solicitor, they should be given no more than 24 hours to lodge an application. The official receiver should be careful not to be seen to be acting in a way which could attract criticism.
8.24 Order to permanently withhold current address
Where the disclosure, or continuing disclosure, of the current address or whereabouts of the debtor (whether to the public generally or to specific persons) of the debtor’s current address might lead to violence against the debtor or a family member who resides with the debtor1, the court may order that the address be withheld from specified documents and public sources of information2. The order is often referred to as a “PARV” order.
The bankrupt’s ‘current address’ means the address of the bankrupt’s current place of residence and any address at which they on business1.
1. rule 20.1
2. rules 20.5 – 20.7
8.25 Application for a PARV order
Where a debtor intends to make a bankruptcy application and has been issued with a unique identifier for the application they can make application to court for a PARV order1. The court can also make a PARV order in respect of a bankrupt subject to a bankruptcy order, bankruptcy restrictions order or bankruptcy restrictions undertaking on the application of the debtor, the official receiver, or the Secretary of State2.
1. rule 20.1(1)
2. rule 20.6(2)
8.26 Content of a PARV order
If the application is successful, the court may order that1:
- details of the bankrupt’s current address be removed from any part of the bankruptcy file or court file which is open for public inspection;
- the bankrupt’s current address be removed from the bankruptcy order;
- the full title of the proceedings be amended by the removal of the bankrupt’s current address from the description;
- details of the bankrupt’s current address be omitted from any notice to be gazetted or otherwise advertised;
- the bankrupt’s current address is not included on the individual insolvency register or bankruptcy restrictions register,
Where the court makes an order, it may further order in respect of the bankrupt’s addresses or whereabouts as it thinks just including withholding previous addresses where the bankrupt has resided or carried on business2.
The official receiver must ensure that immediate action is taken to comply with the terms of any court order made e.g. amending the case management system to show ‘address withheld’ (when adding the bankrupt to the system as a party or updating party details).
If an order is made by the court to amend the full title of the proceedings, the official receiver must immediately send notice of it to the Chief Land Registrar who will amend the corresponding register3.
If the official receiver is notified of the PARV order after the gazette notice has been issued the immediate steps must be taken to have the address details removed (see paragraphs 4.34 and 4.35).
1. rules 20.5(4) and 20.6(4)
2. rules 20.5(5) and 20.6(5)
3. rule 20.7(3)(a)
8.27 General ‘stay of advertisement’ granted on the making of the bankruptcy order (bankrupt not at physical risk)
For cases where advertisement of the bankruptcy order may cause embarrassment or inconvenience to a bankrupt (which may be deemed an unavoidable consequence of bankruptcy), the is not something which ought to prevent appropriate publicity of a bankruptcy order being made. The official receiver should resist any application for a stay of advert which is not linked to an application to reverse the order or meet the criteria for a PARV order.
8.28 Introduction
A stay of proceedings will stop the official receiver from taking any action under the winding-up order1 or bankruptcy order2.
The official receiver should object to an application for a stay of all proceedings in circumstances where the stay is applied for in advance of an application to review, rescind, annul or appeal the making of the order. The grounds for objection are the difficulties the stay would cause whilst the order does effectively remain in force.
If the objection is not successful the official receiver must ensure that the stay is time limited (see paragraph 8.18) and seek an order that notwithstanding the stay, the directors or the bankrupt are required to provide information to the official receiver (see paragraph 8.22). Where the official receiver has already taken control of assets the order should give direction on dealing with those assets whilst the stay is in force.
If a stay of proceedings is granted the official receiver must do nothing in contravention of the stay, as this may lead to the official receiver being held in contempt of court. Where assets appear to be in jeopardy the official should return to court for directions3 and seek a variation of the stay.
1. section 147(1)
2. rule 10.135
3. rule 13.3
8.29 Effect of time limited stay on liquidation
Where a stay is for a limited period, the liquidator will remain in control and the director’s powers remain in suspense.
The terms upon which the stay is granted should be clearly stated in the court order indicating whether the liquidator remains in control of the assets and all other matters relevant to the stay and its effect on the conduct of the liquidation. Whether or not the official receiver, as liquidator, remains in control of the assets will depend on the purpose of the stay. Accordingly, there may be some circumstances where the effect of the stay of the liquidation is that the official receiver’s responsibility for assets terminates but others where this is not the case.
At the hearing of the application for the stay, the official receiver should ask the court to state clearly in its order the effect of the stay on the official receiver’s position as liquidator.
8.30 Stay of proceedings - application for individual voluntary arrangement
Where an application for an interim order is pending or an order has been made (where the bankrupt intends to make a proposal for an individual voluntary arrangement (IVA))1, the court may stay the bankruptcy proceedings in whole or in part2.
As above the court order should be clear of the extent to which the official receiver can continue to act while the interim order is in force. The official receiver should always ensure that the stay is for a specified period of time.
A debtor may apply for an IVA without making application for an interim order3. In the absence of a stay the official receiver should continue with the administration of the bankruptcy.
1. section 253
2. section 255(4)
3. section 256A
8.31 Effect of stay of proceedings on bankrupt’s property
Where a stay of proceedings is in force, the official receiver can take no further action with regard to the bankrupt’s property. Where the official receiver has taken possession of property the official receiver is not required to return it to the bankrupt unless the court specifically orders. The property will remain vested in any trustee until such time as the bankruptcy order is annulled.
The official receiver may not be able to take action to prevent the bankrupt disposing of property during this period but the disposition would be void in the event that the bankruptcy order was upheld and the stay lifted.
8.32 Insurance during a stay of proceedings
When insurance has been effected prior to a stay of proceedings, the insurance should be left in force and steps should not be taken to cancel it, but care should be taken in effecting insurance during the period when the stay is in force.
The official receiver should refer to the terms of the order to establish whether the protection of company assets remains the liquidator’s responsibility and, if so, effect any necessary insurance not previously in place.
When the official receiver has no duty to insure the bankrupt’s effects during a period when a stay is in force, the official receiver should notify the bankrupt in writing no steps will be taken insure the effects whilst the stay continues.
Where the official receiver is concerned about the insurance of goods etc., the official receiver may seek the bankrupt’s agreement to effecting insurance or alternatively seek directions from the court. The official receiver should not take any action in contravention of the court’s order preventing the official receiver from taking action in respect of the bankruptcy.
If the official receiver effects insurance during the period of the stay without the appropriate authority and the order is subsequently annulled, the official receiver may not be able to recover the premiums paid.
8.33 The effect of stay on bankrupt and the discharge period
Where a stay of proceedings is granted the status of the bankrupt is unaffected.
The bankrupt remains subject to the disabilities of bankruptcy and the discharge period continues to run. Where the official receiver is concerned as to the ongoing length of the stay and the effect it is having, or might have, on the conduct of the bankruptcy proceedings, the official receiver should seek the directions of the court1 at any appropriate time. Where the stay of proceedings is being prolonged and the bankrupt has failed to co-operate, the official receiver should make application as early as possible, to ensure sufficient time to apply for a suspension of the discharge period, should such an application be considered necessary.
Whilst the official receiver is prevented from giving notice of the bankruptcy, the court still may stay any action, execution or other legal process against the property or person of the bankrupt2 and creditors with provable debts are still retrained from seeking recovery of their debt3.
1. rule 13.4
2. section 285(1)
3. section 285(3)
8.34 Criminal allegations
As the status of a bankrupt remains unchanged during the period that a stay is in force a bankrupt is capable of committing an offence e.g. a credit offence or an offence under section 11 of the Company Directors Disqualification Act 1986. In such circumstances consideration should be given to submitting a statement of facts or, where necessary, to seek advice.
8.35 Disqualification proceedings
Where the stay of a winding-up order is for a limited period, this does not affect the official receiver’s obligation to report on the conduct of the officers of the company under the Company Directors Disqualification Act 1986.
8.36 Stay of proceedings
The legislation contains no provision for a winding-up order to be annulled but the court may at any time, after a winding-up order has been made, make an order staying all proceedings in the winding up1. The order may be made on the application of the liquidator, the official receiver or any creditor or contributory. The court may order a permanent stay or a stay for a limited time on such terms and conditions as the court thinks fit.
The provisions for a stay of a winding-up order against a company are equally applicable in respect of an order for the winding up of a partnership. The application must be heard in open court, unless the court otherwise directs2.
1. section 147(1)
2. rule 12.2(3)
8.37 Effect of permanent stay on liquidation
If the court makes an order staying the proceedings altogether, the effect is that the liquidation is terminated, and control of the company is returned to the directors.
8.38 Contents of order staying proceedings
The order permanently staying the winding up proceedings should state that the official receiver, as liquidator, will vacate office immediately and be released as liquidator from such time as the Secretary of State may determine. The order should also provide for the official receiver’s costs and give a direction regarding the disposal of the petition deposit. The guidance in respect of costs in a rescission or ‘payment in full’ annulments in bankruptcy should be followed as appropriate.
8.39 Permanent stay of proceedings where creditors paid in full
The fact that creditors have been paid in full does not itself justify a stay of the liquidation. The court, so far as possible, should act upon the principles which are applicable in exercising jurisdiction to annul a bankruptcy order1 (see chapter 9). The court has discretion whether to grant a stay and it is for the applicant to satisfy the court that adequate arrangements exist to justify a stay2.
1. Re Telescriptor Syndicate Ltd [1903] 2 Ch 174
2. In Re Calgary and Edmunton Land Co. Ltd [1975] 1 WLR 355
8.40 Report by official receiver
The court may require the official receiver to submit a report relating to any facts or matters which are, in the opinion of the official receiver, relevant to the application1. This may include matters similar to those referred to for annulment applications in bankruptcy and any possible prosecution or disqualification offences or misconduct by the officers of the company. In particular, the official receiver should draw the court’s attention to any failure to co-operate, non-disclosure of assets and to any debts due under the Employment Rights legislation.
1. section 147(2)
8.41 Action after permanent staying order
A copy of any order staying winding up proceedings must be forwarded by the company to the Registrar of Companies1. As control of the company has been returned to the directors it is their responsibility, not the official receivers. The winding-up order is still in existence but the effect of the order is to remove the control of the company from the official receiver or liquidator (if different). In such circumstances any assets and all records of the company should be returned to the company’s officers without delay (subject to satisfactory arrangements having been made for the payment of the liquidation expenses).
1. section 147(3)
8.42 Rescission/recall of winding up order
Any application for the rescission of a winding-up order should be made within five business days of the date of the order1, although the court may exercise its discretion to hear such applications after this period has elapsed. Where an application is made, the official receiver should consider if there are any facts or circumstances which should be reported to the court. An application for rescission of a winding-up order is similar to an application for annulment of a bankruptcy order on the grounds the order ought not have been made (see chapter 9).
1. rule 12.59(3)
8.43 High Court practice
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. 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.
8.44 Records on company file
The Registrar of Companies has no duty to retain a winding-up order entered in the records which the court has declared to be a nullity1. 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.
1. re Calmex Ltd [1989] 1 All E.R. 485
8.45 Official receiver’s costs
In any successful rescission case, the official receiver should seek an order for the official receiver’s costs. In most cases the official receiver will only ask the court to confirm that the petition deposit be retained and applied to the partial payment of the administration fee1.
Where realisations have been made the official receiver should ask that the deposit be retained, and any other funds received but only up to the maximum required to recover the administration fee and the general fee2.
It would be for the applicant, if successful, to argue that the monies realised should be restored by the petitioner by way of an order of costs against the petitioner in favour of the applicant.
Where the application is made some time after the order and the actual costs of the official receiver, on a time and rate basis, exceed the deposit the official receiver should request the additional costs above the amount of the retained deposit.
Where the court determines that the petitioner is not liable for the costs then the official receiver should seek an order that the applicant is liable for the costs.
1. HMRC v Direct Affinity &Ors [2019] EWHC 3063(Ch)
2. Insolvency Proceedings (Fees) Order 2016
8.46 Release of liquidator on the rescission of a winding-up order
Where a winding-up order is rescinded the liquidator (whether the official receiver or an insolvency practitioner) is released at a time determined by the court1. The official receiver should ask for release with immediate effect as part of the order.
1. section 174(4A)
8.47 Rescission of a bankruptcy order
If the conditions for the annulment of the bankruptcy order do not exist (see chapter 9), the bankrupt can still apply for rescission of the order1. The discretion to rescind is exercised by the court with caution and only in exceptional circumstances.
1. section 375(1)
8.48 Change in circumstances required for rescission
The Court of Appeal has held that a rescission of the bankruptcy order would only occur where there had been a change in circumstances since the bankruptcy order or, more rarely, where there was the discovery of further evidence1. In the case before the Court of Appeal the reason for the change of attitude was the belief that the bankruptcy orders would prejudice the recovery of a substantial asset. The underlying circumstances had been known to the petitioner and other supporting creditors at the date of the order but this did not prevent their change of attitude from being both new and relevant.
1. Fitch v Official Receiver [1996] 1 WLR 242
8.49 Source of payment to petitioner
Where a payment has been made to a petitioning creditor in connection with an application to rescind the bankruptcy order, the official receiver should establish the source of the funds (if possible). If a payment represents the disposal of an asset which would have comprised part of the bankruptcy estate, this should be drawn to the court’s attention as it operates to defeat the principle of an equal distribution of assets.
8.50 Official receiver’s costs
Where the petitioning creditor ‘changes sides’, only the official receiver can (logically) be made the respondent to the rescission application. The official receiver should apply for costs in the usual way (see paragraph 8.44).
8.51 Effect of rescission on a bankruptcy restrictions order or undertaking
Rescission has the effect of bringing the bankruptcy to an end, as at the date of the rescission, but does not treat the bankruptcy order as never having been made. If the bankruptcy order was properly made and the court rescinds rather than annuls the order, proceedings should still be capable of being pursued.
The court would consider the circumstances giving rise to the rescission of the bankruptcy order in deciding whether it was appropriate to make a bankruptcy restrictions order.
Where a bankruptcy restrictions order or undertaking is already in existence, restrictions imposed continue to apply notwithstanding the rescission of the bankruptcy order, although the circumstances in which the bankruptcy order was rescinded might provide grounds for the bankruptcy restrictions undertaking to be rescinded or annulled1
1. schedule 4A, paragraph (9)(3)