Application under the summary procedure

Document Cited authorities (8) Cited in Related
AuthorMark Watson-Gandy
Pages393-406
Chapter 27


Application under the Summary Procedure

OBJECTIVE

The court has the power to make a declaration in respect of a company in liquidation that a person who is, or was, an officer of the company or has acted as liquidator or administrative receiver of the company or who is, or was, concerned in the formation, promotion and management of the company has misapplied or retained or become accountable for any money or property of the company, or has been guilty of misfeasance or breach of any fiduciary or other duty to the company.1The section does not create any new cause of action but, instead, creates a simplified summary procedure by which claims can be litigated.

An officer includes a director (including a de facto director2) manager or secretary. An auditor has been held to be an officer of the company for these purposes.3Breach of other duty includes a claim for negligence.4The section is not, however, available for the collection of a simple contractual debt.5

Equivalent proceedings may be brought against an administrator under paragraph 75 of Schedule B1 to the Insolvency Act 1986.

The application may be made by the liquidator, the Official Receiver or any creditor or (with the court’s permission) any contributory of the company.6

Any compensation ordered goes to the general funds in the hands of the liquidator rather than to compensate an individual creditor.

APPLICATION

Proceedings are brought by application notice (Form IAA).

1Section 212 of the Insolvency Act 1986.

2Re Paycheck Services 3 Ltd [2010] UKSC 51.

3Re Thomas Gerrard & Sons Ltd [1968] Ch 455 at 473. The question of whether or not an auditor is properly treated as an officer of the company for these purposes is, however, in the author’s opinion, not entirely clear cut.

4Re D’Jan of London Ltd [1993] BCC 646.

5Re Etic Ltd [1928] Ch 861.

6Section 212 of the Insolvency Act 1986.

394 Corporate Insolvency Practice

The application must recite the nature of the declaration and relief sought, and the grounds for bringing the application.7

The application should be returnable to the registrar in the Companies Court or to the district judge in a Chancery District Registry or county court with insolvency jurisdiction.

The respondent should be the person against whom relief is sought.

COURT FEES

Where fresh proceedings need to be brought, a court fee of £280 is payable.8If the application can be made as part of exisiting proceedings and the application is on notice to other parties, a court fee of £155 is payable.9Where the application is made by consent or without notice in existing proceedings, a court fee of £50 is payable.10

SERVICE

The application will need to be filed at court and served on the respondent as soon as practicable after it is filed and in any event, unless it is necessary to apply without notice or on short notice, at least 14 days before the date fixed for the hearing.11

The usual rule is that, subject to any other express provision, the application must be served at least 14 days before the date fixed for the hearing.12However, the court does have power, in cases of urgency, to hear an application immediately with or without notice to the other parties.13

Service may be effected personally14or by post in accordance with the rules on postal service under Part 6 of the CPR.15Service on a person may be effected by service on that person’s solicitor, if they are authorised to accept service on that person’s behalf.16

7Rule 1.35(2) of the Insolvency (England and Wales) Rules 2016.

8Paragraph 3.5 of Schedule 1 to the Civil Proceedings Fees Order 2008.

9Paragraph 3.12 of Schedule 1 to the Civil Proceedings Fees Order 2008.

10Paragraph 3.11 of Schedule 1 to the Civil Proceedings Fees Order 2008.

11Rule 12.9(3) of the Insolvency (England and Wales) Rules 2016.

12Rule 12.9(3) of the Insolvency (England and Wales) Rules 2016.

13Rule 12.10(1) of the Insolvency (England and Wales) Rules 2016.

14Rule 1.44 of the Insolvency (England and Wales) Rules 2016.

15Paragraph 1(2) of Schedule 4 to the Insolvency (England and Wales) Rules 2016.

16Rule 1.40 of the Insolvency (England and Wales) Rules 2016.

THE FIRST HEARING

At the first hearing, the registrar or district judge will give directions as to whether points of claim are needed and for the filing of evidence. He may also require the application to be served on other people. He may give directions as to whether witnesses are to attend for cross examination. The first hearing is likely to be in chambers and the advocates will not be expected to robe.

EVIDENCE

No evidence needs to be filed before the first hearing. The application will, however, need in due course to be supported by a witness statement by the applicant. This will need to address:

ƒ the basis upon which the applicant has the right to bring the claim;
ƒ the order he seeks;
ƒ the date the company was incorporated;
ƒ the date upon which the petition to wind up the company was presented;
ƒ the date upon which the company went into liquidation;
ƒ the basis that the respondent falls within the jurisdiction of the court (that he is, or was, an officer of the company or has acted as liquidator or administrative receiver of the company or who is, or was, concerned in the formation, promotion and management of the company);
ƒ the nature of the duty he owes to the company;
ƒ particulars of the matters – how and when it is said the respondent has misapplied, retained or become accountable for any money or property of the company, or...

Get this document and AI-powered insights with a free trial of vLex and Vincent AI

Get Started for Free
Navigation index

Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant

  • Access comprehensive legal content with no limitations across vLex's unparalleled global legal database

  • Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength

  • Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities

  • Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

vLex

Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant

  • Access comprehensive legal content with no limitations across vLex's unparalleled global legal database

  • Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength

  • Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities

  • Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

vLex

Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant

  • Access comprehensive legal content with no limitations across vLex's unparalleled global legal database

  • Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength

  • Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities

  • Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

vLex

Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant

  • Access comprehensive legal content with no limitations across vLex's unparalleled global legal database

  • Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength

  • Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities

  • Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

vLex

Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant

  • Access comprehensive legal content with no limitations across vLex's unparalleled global legal database

  • Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength

  • Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities

  • Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

vLex

Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant

  • Access comprehensive legal content with no limitations across vLex's unparalleled global legal database

  • Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength

  • Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities

  • Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

vLex

Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant

  • Access comprehensive legal content with no limitations across vLex's unparalleled global legal database

  • Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength

  • Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities

  • Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

vLex