The Insolvency Rules 1986

THE THIRD GROUP OF PARTS

PART 7 COURT PROCEDURE AND PRACTICE

CHAPTER 1 APPLICATIONS

Preliminary

7.1.  This Chapter applies to any application made to the court under the Act or Rules except a petition for—

(a) an administration order under Part II,

(b) a winding-up order under Part IV, or

(c) a bankruptcy order under Part IX

of the Act.

Interpretation

7.2.—(1)  [[FORM 7.1]] In this Chapter, except in so far as the context otherwise requires—

“originating application” means an application to the court which is not an application in pending proceedings before the court; and

“ordinary application” means any other application to the court.

(2) [[FORM 7.2]] Every application shall be in the form appropriate to the application concerned.

Form and contents of application

7.3.—(1) Each application shall be in writing and shall state—

(a) the names of the parties;

(b) the nature of the relief or order applied for or the directions sought from the court;

(c) the names and addresses of the persons (if any) on whom it is intended to serve the application or that no person is intended to be served;

(d) where the Act or Rules require that notice of the application is to be given to specified persons, the names and addresses of all those persons (so far as known to the applicant); and

(e) the applicant's address for service.

(2) An originating application shall set out the grounds on which the applicant claims to be entitled to the relief or order sought.

(3) The application must be signed by the applicant if he is acting in person or, when he is not so acting, by or on behalf of his solicitor.

Filing and service of application

7.4.—(1) The application shall be filed in court, accompanied by one copy and a number of additional copies equal to the number of persons who are to be served with the application.

(2) Subject as follows in this Rule and the next, or unless the Rule under which the application is brought provides otherwise, or the court otherwise orders, upon the presentation of the documents mentioned in paragraph (1) above, the court shall fix a venue for the application to be heard.

(3) Unless the court otherwise directs, the applicant shall serve a sealed copy of the application, endorsed with the venue for the hearing, on the respondent named in the application (or on each respondent if more than one).

(4) The court may give any of the following directions—

(a) that the application be served upon persons other than those specified by the relevant provision of the Act or Rules;

(b) that the giving of notice to any person may be dispensed with;

(c) that notice be given in some way other than that specified in paragraph (3).

(5) Unless the provision of the Act or Rules under which the application is made provides otherwise, and subject to the next paragraph, the application must be served at least 14 days before the date fixed for the hearing.

(6) Where the case is one of urgency, the court may (without prejudice to its general power to extend or abridge time limits)—

(a) hear the application immediately, either with or without notice to, or the attendance of, other parties, or

(b) authorise a shorter period of service than that provided for by paragraph (5);

and any such application may be heard on terms providing for the filing or service of documents, or the carrying out of other formalities, as the court thinks fit.

Other hearings ex parte

7.5.—(1) Where the relevant provisions of the 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 ex parte.

(2) Where the application is properly made ex parte, the court may hear it forthwith, without fixing a venue as required by Rule 7.4(2).

(3) Alternatively, the court may fix a venue for the application to be heard, in which case Rule 7.4 applies (so far as relevant).

Hearing of application

7.6.—(1) Unless allowed or authorised to be made otherwise, every application before the registrar shall, and every application before the judge may, be heard in chambers.

(2) Unless either—

(a) the judge has given a general or special direction to the contrary, or

(b) it is not within the registrar's power to make the order required,

the jurisdiction of the court to hear and determine the application may be exercised by the registrar, and the application shall be made to the registrar in the first instance.

(3) Where the application is made to the registrar he may refer to the judge any matter which he thinks should properly be decided by the judge, and the judge may either dispose of the matter or refer it back to the registrar with such directions as he thinks fit.

(4) Nothing in this Rule precludes an application being made directly to the judge in a proper case.

Use of affidavit evidence

7.7.—(1) In any proceedings evidence may be given by affidavit unless by any provision of the Rules it is otherwise provided or the court otherwise directs; but the court may, on the application of any party, order the attendance for cross-examination of the person making the affidavit.

(2) Where, after such an order has been made, the person in question does not attend, his affidavit shall not be used in evidence without the leave of the court.

Filing and service of affidavits

7.8.—(1) Unless the provision of the Act or Rules under which the application is made provides otherwise, or the court otherwise allows—

(a) if the applicant intends to rely at the first hearing on affidavit evidence, he shall file the affidavit or affidavits (if more than one) in court and serve a copy or copies on the respondent, not less than 14 days before the date fixed for the hearing, and

(b) where a respondent to an application intends to oppose it and to rely for that purpose on affidavit evidence, he shall file the affidavit or affidavits (if more than one) in court and serve a copy or copies on the applicant, not less than 7 days before the date fixed for the hearing.

(2) Any affidavit may be sworn by the applicant or by the respondent or by some other person possessing direct knowledge of the subject matter of the application.

Use of reports

7.9.—(1) A report may be filed in court instead of an affidavit—

(a) in any case, by the official receiver (whether or not he is acting in any capacity mentioned in sub-paragraph (b)), or a deputy official receiver, or

(b) unless the application involves other parties or the court otherwise orders, by—

(i) an administrator, a liquidator or a trustee in bankruptcy,

(ii) a provisional liquidator or an interim receiver,

(iii) a special manager, or

(iv) an insolvency practitioner appointed under section 273(2).

(2) In any case where a report is filed instead of an affidavit, the report shall be treated for the purposes of Rule 7.8(1) and any hearing before the court as if it were an affidavit.

(3) Any report filed by the official receiver in accordance with the Act or the Rules is prima facie evidence of any matter contained in it.

Adjournment of hearing; directions

7.10.—(1) The court may adjourn the hearing of an application on such terms (if any) as it thinks fit.

(2) The court may at any time give such directions as it thinks fit as to—

(a) service or notice of the application on or to any person, whether in connection with the venue of a resumed hearing or for any other purpose;

(b) whether particulars of claim and defence are to be delivered and generally as to the procedure on the application;

(c) the manner in which any evidence is to be adduced at a resumed hearing and in particular (but without prejudice to the generality of this sub-paragraph) as to—

(i) the taking of evidence wholly or in part by affidavit or orally;

(ii) the cross-examination either before the judge or registrar on the hearing in court or in chambers, of any deponents to affidavits;

(iii) any report to be given by the official receiver or any person mentioned in Rule 7.9(1)(b);

(d) the matters to be dealt with in evidence.

CHAPTER 2 TRANSFER OF PROCEEDINGS BETWEEN COURTS

General power of transfer

7.11.—(1) Where winding-up or bankruptcy proceedings are pending in the High Court, the court may order them to be transferred to a specified county court.

(2) Where winding-up or bankruptcy proceedings are pending in a county court, the court may order them to be transferred either to the High Court or to another county court.

(3) In any case where proceedings are transferred to a county court, the transfer must be to a court which has jurisdiction to wind up companies or, as the case may be, jurisdiction in bankruptcy.

(4) Where winding-up or bankruptcy proceedings are pending in a county court, a judge of the High Court may order them to be transferred to that Court.

(5) A transfer of proceedings under this Rule may be ordered—

(a) by the court of its own motion, or

(b) on the application of the official receiver, or

(c) on the application of a person appearing to the court to have an interest in the proceedings.

(6) A transfer of proceedings under this Rule may be ordered notwithstanding that the proceedings commenced before the coming into force of the Rules.

Proceedings commenced in wrong court

7.12.  Where winding-up or bankruptcy proceedings are commenced in a court which is, in relation to those proceedings, the wrong court, that court may—

(a) order the transfer of the proceedings to the court in which they ought to have been commenced;

(b) order that the proceedings be continued in the court in which they have been commenced; or

(c) order the proceedings to be struck out.

Applications for transfer

7.13.—(1) An application by the official receiver for proceedings to be transferred shall be made with a report by him—

(a) setting out the reasons for the transfer, and

(b) including a statement either that the petitioner consents to the transfer, or that he has been given at least 14 days' notice of the official receiver's application.

(2) If the court is satisfied from the official receiver's report that the proceedings can be conducted more conveniently in another court, the proceedings shall be transferred to that court.

(3) Where an application for the transfer of proceedings is made otherwise than by the official receiver, at least 14 days' notice of the application shall be given by the applicant—

(a) to the official receiver attached to the court in which the proceedings are pending, and

(b) to the official receiver attached to the court to which it is proposed that they should be transferred.

Procedure following order for transfer

7.14.—(1) Subject as follows, the court making an order under Rule 7.11 shall forthwith send to the transferee court a sealed copy of the order, and the file of the proceedings.

(2) On receipt of these, the transferee court shall forthwith send notice of the transfer to the official receivers attached to that court and the transferor court respectively.

(3) Paragraph (1) does not apply where the order is made by the High Court under Rule 7.11(4). In that case—

(a) the High Court shall send sealed copies of the order to the county court from which the proceedings are to be transferred, and to the official receivers attached to that court and the High Court respectively, and

(b) that county court shall send the file of the proceedings to the High Court.

(4) Following compliance with this Rule, if the official receiver attached to the court to which the proceedings are ordered to be transferred is not already, by virtue of directions given by the Secretary of State under section 399(6)(a), the official receiver in relation to those proceedings, he becomes, in relation to those proceedings, the official receiver in place of the official receiver attached to the other court concerned.

Consequential transfer of other proceedings

7.15.—(1) This Rule applies where—

(a) an order for the winding up of a company, or a bankruptcy order in the case of an individual, has been made by the High Court, or

(b) in either such case, a provisional liquidator or (as the case may be) an interim receiver has been appointed, or

(c) winding-up or bankruptcy proceedings have been transferred to that Court from a county court.

(2) A judge of any Division of the High Court may, of his own motion, order the transfer to that Division of any such proceedings as are mentioned below and are pending against the company or individual concerned (“the insolvent”) either in another Division of the High Court or in a court in England and Wales other than the High Court.

(3) Proceedings which may be so transferred are those brought by or against the insolvent for the purpose of enforcing a claim against the insolvent estate, or brought by a person other than the insolvent for the purpose of enforcing any such claim (including in either case proceedings of any description by a debenture-holder or mortgagee).

(4) Where proceedings are transferred under this Rule, the registrar may (subject to general or special directions of the judge) dispose of any matter arising in the proceedings which would, but for the transfer, have been disposed of in chambers or, in the case of proceedings transferred from a county court, by the registrar of that court.

CHAPTER 3 SHORTHAND WRITERS

Nomination and appointment of shorthand writers

7.16.—(1)  [[FORM 7.3]] In the High Court the judge and, in a county court, the registrar may in writing nominate one or more persons to be official shorthand writers to the court.

(2) [[FORM 7.4]] The court may, at any time in the course of insolvency proceedings, appoint a shorthand writer to take down the evidence of a person examined under section 133, 236, 290 or 366.

(3) Where the official receiver applies to the court for an order appointing a shorthand writer, he shall name the person he proposes for appointment; and that appointment shall be made, unless the court otherwise orders.

Remuneration

7.17.—(1) The remuneration of a shorthand writer appointed in insolvency proceedings shall be paid by the party at whose instance the appointment was made, or out of the insolvent estate, or otherwise, as the court may direct.

(2) The remuneration payable shall be calculated in accordance with Schedule 3 to the Rules.

Cost of shorthand note

7.18.  Where in insolvency proceedings the court appoints a shorthand writer on the application of the official receiver, in order that a written record may be taken of the evidence of a person to be examined, the cost of the written record is deemed an expense of the official receiver in the proceedings.

CHAPTER 4 ENFORCEMENT PROCEDURES

Enforcement of court orders

7.19.—(1) In any insolvency proceedings, orders of the court may be enforced in the same manner as a judgment to the same effect.

(2) Where an order in insolvency proceedings is made, or any process is issued, by a county court (“the primary court”), the order or process may be enforced, executed and dealt with by any other county court (“the secondary court”), as if it had been made or issued for the enforcement of a judgment or order to the same effect made by the secondary court.

This applies whether or not the secondary court has jurisdiction to take insolvency proceedings.

Orders enforcing compliance with the Rules

7.20.—(1) The court may, on application by the competent person, make such orders as it thinks necessary for the enforcement of obligations falling on any person in accordance with—

(a) section 22, 47 or 131 (duty to submit statement of affairs in administration, administrative receivership or winding up),

(b) section 143(2) (liquidator to furnish information, books, papers, etc.), or

(c) section 235 (duty of various persons to co-operate with office-holder).

(2) The competent person for this purpose is—

(a) under section 22, the administrator,

(b) under section 47, the administrative receiver,

(c) under section 131 or 143(2), the official receiver, and

(d) under section 235, the official receiver, the administrator, the administrative receiver, the liquidator or the provisional liquidator, as the case may be.

(3) An order of the court under this Rule may provide that all costs of and incidental to the application for it shall be borne by the person against whom the order is made.

Warrants (general provisions)

7.21.—(1) A warrant issued by the court under any provision of the Act shall be addressed to such officer of the High Court or of a county court (whether or not having jurisdiction in insolvency proceedings) as the warrant specifies, or to any constable.

(2) The persons referred to in sections 134(2), 236(5), 364(1), 365(3) and 366(3) (court's powers of enforcement) as the prescribed officer of the court are—

(a) in the case of the High Court, the tipstaff and his assistants of the court, and

(b) in the case of a county court, the registrar and the bailiffs.

(3) In this Chapter references to property include books, papers and records.

Warrants under ss.134, 364

7.22.   [[FORM 7.6] [FORM 7.7]] When a person is arrested under a warrant issued by the court under section 134 (officer of company failing to attend for public examination), or section 364 (arrest of debtor or bankrupt)—

(a) the officer apprehending him shall give him into the custody of the governor of the prison named in the warrant, who shall keep him in custody until such time as the court otherwise orders and shall produce him before the court as it may from time to time direct; and

(b) any property in the arrested person's possession which may be seized shall be—

(i) lodged with, or otherwise dealt with as instructed by, whoever is specified in the warrant as authorised to receive it, or

(ii) kept by the officer seizing it pending the receipt of written orders from the court as to its disposal,

as may be directed by the court in the warrant.

Warrants under ss.236, 366

7.23.—(1)  [[FORM 7.8]] When a person is arrested under a warrant issued under section 236 (inquiry into insolvent company's dealings) or 366 (the equivalent in bankruptcy), the officer arresting him shall forthwith bring him before the court issuing the warrant in order that he may be examined.

(2) [[FORM 7.9]] If he cannot immediately be brought up for examination, the officer shall deliver him into the custody of the governor of the prison named in the warrant, who shall keep him in custody and produce him before the court as it may from time to time direct.

(3) After arresting the person named in the warrant, the officer shall forthwith report to the court the arrest or delivery into custody (as the case may be) and apply to the court to fix a venue for the person's examination.

(4) The court shall appoint the earliest practicable time for the examination, and shall—

(a) [[FORM 7.9]] direct the governor of the prison to produce the person for examination at the time and place appointed, and

(b) forthwith give notice of the venue to the person who applied for the warrant.

(5) Any property in the arrested person's possession which may be seized shall be—

(a) lodged with, or otherwise dealt with as instructed by, whoever is specified in the warrant as authorised to receive it, or

(b) kept by the officer seizing it pending the receipt of written orders from the court as to its disposal,

as may be directed by the court.

Execution of warrants outside court's district

7.24.—(1)  [[FORM 7.10]] This Rule applies where a warrant for a person's arrest has been issued in insolvency proceedings by a county court (“the primary court”) and is addressed to another county court (“the secondary court”) for execution in its district.

(2) The secondary court may send the warrant to the registrar of any other county court (whether or not having jurisdiction to take insolvency proceedings) in whose district the person to be arrested is or is believed to be, with a notice to the effect that the warrant is transmitted to that court under this Rule for execution in its district at the request of the primary court.

(3) The court receiving a warrant transmitted by the secondary court under this Rule shall apply its seal to the warrant, and secure that all such steps are taken for its execution as would be appropriate in the case of a warrant issued by itself.

Warrants under s.365

7.25.—(1) A warrant issued under section 365(3) (search of premises not belonging to the bankrupt) shall authorise any person executing it to seize any property of the bankrupt found as a result of the execution of the warrant.

(2) [[FORM 7.12] [[FORM 7.13]] Any property seized under a warrant issued under section 365(2) or (3) shall be—

(a) lodged with, or otherwise dealt with as instructed by, whoever is specified in the warrant as authorised to receive it, or

(b) kept by the officer seizing it pending the receipt of written orders from the court as to its disposal,

as may be directed by the warrant.

CHAPTER 5 COURT RECORDS AND RETURNS

Title of proceedings

7.26.—(1) Every proceeding under Parts I to VII of the Act shall, with any necessary additions, be intituled “IN THE MATTER OF ... (naming the company to which the proceedings relate) AND IN THE MATTER OF THE INSOLVENCY ACT 1986”.

(2) Every proceeding under Parts IX to XI of the Act shall be intituled “IN BANKRUPTCY”.

Court records

7.27.  The court shall keep records of all insolvency proceedings, and shall cause to be entered in the records the taking of any step in the proceedings, and such decisions of the court in relation thereto, as the court thinks fit.

Inspection of records

7.28.—(1) Subject as follows, the court's records of insolvency proceedings shall be open to inspection by any person.

(2) If in the case of a person applying to inspect the records the registrar is not satisfied as to the propriety of the purpose for which inspection is required, he may refuse to allow it. The person may then apply forthwith and ex parte to the judge, who may refuse the inspection, or allow it on such terms as he thinks fit.

(3) The judge's decision under paragraph (2) is final.

Returns to Secretary of State

7.29.—(1) The court shall from time to time send to the Secretary of State the following particulars relating to winding-up and bankruptcy proceedings—

(a) the full title of the proceedings, including the number assigned to each case;

(b) where a winding-up or bankruptcy order has been made, the date of the order.

(2) The Secretary of State may, on the request of any person, furnish him with particulars sent by the court under this Rule.

File of court proceedings

7.30.—(1) In respect of all insolvency proceedings, the court shall open and maintain a file for each case; and (subject to directions of the registrar) all documents relating to such proceedings shall be placed on the relevant file.

(2) No proceedings shall be filed in the Central Office of the High Court.

Right to inspect the file

7.31.—(1) In the case of any insolvency proceedings, the following have the right, at all reasonable times, to inspect the court's file of the proceedings—

(a) the person who, in relation to those proceedings, is the responsible insolvency practitioner;

(b) any duly authorised officer of the Department; and

(c) any person stating himself in writing to be a creditor of the company to which, or the individual to whom, the proceedings relate.

(2) The same right of inspection is exercisable—

(a) in proceedings under Parts I to VII of the Act, by every person who is, or at any time has been, a director or officer of the company to which the proceedings relate, or who is a member of the company or a contributory in its winding up;

(b) in proceedings with respect to a voluntary arrangement proposed by a debtor under Part VIII of the Act, by the debtor;

(c) in bankruptcy proceedings, by—

(i) the bankrupt,

(ii) any person against whom, or by whom, a bankruptcy petition has been presented, and

(iii) any person who has been served, in accordance with Chapter 1 of Part 6 of the Rules, with a statutory demand.

(3) The right of inspection conferred as above on any person may be exercised on his behalf by a person properly authorised by him.

(4) Any person may, by special leave of the court, inspect the file.

(5) The right of inspection conferred by this Rule is not exercisable in the case of documents, or parts of documents, as to which the court directs (either generally or specially) that they are not to be made open to inspection without the court's leave.

An application for a direction of the court under this paragraph may be made by the official receiver, by the person who in relation to any proceedings is the responsible insolvency practitioner, or by any party appearing to the court to have an interest.

(6) If, for the purpose of powers conferred by the Act or the Rules, the Secretary of State, the Department or the official receiver requires to inspect the file of any insolvency proceedings, and requests the transmission of the file, the court shall comply with the request (unless the file is for the time being in use for the court's own purposes).

(7) Paragraphs (2) and (3) of Rule 7.28 apply in respect of the court's file of any proceedings as they apply in respect of court records.

Filing of Gazette notices and advertisements

7.32.—(1) In any court in which insolvency proceedings are pending, an officer of the court shall file a copy of every issue of the Gazette which contains an advertisement relating to those proceedings.

(2) Where there appears in a newspaper an advertisement relating to insolvency proceedings pending in any court, the person inserting the advertisement shall file a copy of it in that court.

The copy of the advertisement shall be accompanied by, or have endorsed on it, such particulars as are necessary to identify the proceedings and the date of the advertisement's appearance.

(3) An officer of any court in which insolvency proceedings are pending shall from time to time file a memorandum giving the dates of, and other particulars relating to, any notice published in the Gazette, and any newspaper advertisements, which relate to proceedings so pending.

The officer's memorandum is prima facie evidence that any notice or advertisement mentioned in it was duly inserted in the issue of the newspaper or the Gazette which is specified in the memorandum.

CHAPTER 6 COSTS AND TAXATION

Application of Rules of Supreme Court and County Court Rules

7.33.  Subject to provision to inconsistent effect made as follows in this Chapter—

(a) Order 62 of the Rules of the Supreme Court applies to insolvency proceedings in the High Court, and

(b) Order 38 of the County Court Rules applies to such proceedings in a county court,

in either case, with any necessary modifications.

Requirement to tax costs

7.34.—(1) Subject as follows, where any costs, charges or expenses of any person are payable out of the insolvent estate, the responsible insolvency practitioner may agree them with the person entitled to payment or may require them to be taxed by the court to which the insolvency proceedings are allocated or, where in relation to a company there is no such court, by a court having jurisdiction to wind up the company.

(2) If a liquidation or creditors' committee established in insolvency proceedings (except administrative receivership) resolves that any such costs, charges or expenses be taxed, the insolvency practitioner shall require taxation.

(3) Where the costs, charges or expenses of any person employed by an insolvency practitioner in insolvency proceedings are required to be taxed, this does not preclude the insolvency practitioner from making payments on account to such person on the basis of an undertaking by that person to repay immediately any money which may, on taxation, prove to have been overpaid, with interest at the rate specified in section 17 of the Judgments Act 1838 on the date payment was made and for the period from the date of payment to that of repayment.

(4) In any proceedings before the court, including proceedings on a petition, the court may order costs to be taxed.

(5) Unless otherwise directed or authorised, the costs of a trustee in bankruptcy or a liquidator are to be allowed on the standard basis.

(6) This Rule applies additionally (with any necessary modifications) to winding-up and bankruptcy proceedings commenced before the coming into force of the Rules.

Procedure where taxation required

7.35.—(1) Before taxing the costs of any person employed in insolvency proceedings by a responsible insolvency practitioner, the taxing officer shall require a certificate of employment, which shall be endorsed on the bill and signed by the insolvency practitioner.

(2) The certificate shall include—

(a) the name and address of the person employed,

(b) details of the functions to be carried out under the employment, and

(c) a note of any special terms of remuneration which have been agreed.

(3) Every person whose costs are required to be taxed in insolvency proceedings shall, on being required in writing to do so by the insolvency practitioner, deliver his bill of costs to the taxing officer for taxation.

(4) If that person does not so deliver his bill within 3 months of the requirement under paragraph (3), or within such further time as the court, on application, may grant, the insolvency practitioner may deal with the insolvent estate without regard to any claim by that person, whose claim is forfeited.

(5) Where in any such case such a claim lies additionally against an insolvency practitioner in his personal capacity, that claim is also forfeited.

Costs of sheriff

7.36.—(1) Where a sheriff—

(a) is required under section 184(2) or 346(2) to deliver up goods or money, or

(b) has under section 184(3) or 346(3) deducted costs from the proceeds of an execution or money paid to him,

the responsible insolvency practitioner may require in writing that the sheriff's bill of costs be taxed.

(2) Where such a requirement is made, Rule 7.35(4) applies.

(3) Where, in the case of a deduction under paragraph (1)(b), any amount is disallowed on taxation, the sheriff shall forthwith pay a sum equal to that amount to the insolvency practitioner for the benefit of the insolvent estate.

Petitions presented by insolvents

7.37.—(1) In any case where a petition is presented by a company or individual (“the insolvent”) against himself, any solicitor acting for the insolvent shall in his bill of costs give credit for any sum or security received from the insolvent as a deposit on account of the costs and expenses to be incurred in respect of the filing and prosecution of the petition; and the deposit shall be noted by the taxing officer on the taxing certificate.

(2) Paragraph (3) applies where a petition is presented by a person other than the insolvent to whom the petition relates and before it is heard the insolvent presents a petition for the same order, and that order is made.

(3) Unless the court considers that the insolvent estate has benefitted by the insolvent's conduct, or that there are otherwise special circumstances justifying the allowance of costs, no costs shall be allowed to the insolvent or his solicitor out of the insolvent estate.

Costs paid otherwise than out of the insolvent estate

7.38.  Where a bill of costs is taxed under an order of the court directing that the costs are to be paid otherwise than out of the insolvent estate, the taxing officer shall note on the certificate of taxation by whom, or the manner in which, the costs are to be paid.

Award of costs against official receiver or responsible insolvency practitioner

7.39.  Without prejudice to any provision of the Act or Rules by virtue of which the official receiver is not in any event to be liable for costs and expenses, where the official receiver or a responsible insolvency practitioner is made a party to any proceedings on the application of another party to the proceedings, he shall not be personally liable for costs unless the court otherwise directs.

Applications for costs

7.40.—(1) This Rule applies where a party to, or person affected by, any proceedings in an insolvency—

(a) applies to the court for an order allowing his costs, or part of them, incidental to the proceedings, and

(b) that application is not made at the time of the proceedings.

(2) The person concerned shall serve a sealed copy of his application on the responsible insolvency practitioner, and, in a winding up by the court or bankruptcy, on the official receiver.

(3) The insolvency practitioner and, where appropriate, the official receiver may appear on the application.

(4) No costs of or incidental to the application shall be allowed to the applicant unless the court is satisfied that the application could not have been made at the time of the proceedings.

Costs and expenses of witnesses

7.41.—(1) Except as directed by the court, no allowance as a witness in any examination or other proceedings before the court shall be made to the bankrupt or an officer of the insolvent company to which the proceedings relate.

(2) A person presenting any petition in insolvency proceedings shall not be regarded as a witness on the hearing of the petition, but the taxing officer may allow his expenses of travelling and subsistence.

Certificate of taxation

7.42.—(1) A certificate of taxation of the taxing officer is final and conclusive as to all matters which have not been objected to in the manner provided for under the rules of the court.

(2) Where it is proved to the satisfaction of a taxing officer that a certificate of taxation has been lost or destroyed, he may issue a duplicate.

(3) “Certificate of taxation” includes, for the purposes of the Rules, an order of the registrar in a county court.

CHAPTER 7 PERSONS INCAPABLE OF MANAGING THEIR AFFAIRS

Introductory

7.43.—(1) The Rules in this Chapter apply where in insolvency proceedings it appears to the court that a person affected by the proceedings is one who is incapable of managing and administering his property and affairs either—

(a) by reason of mental disorder within the meaning of the Mental Health Act 1983, or

(b) due to physical affliction or disability.

(2) The person concerned is referred to as “the incapacitated person”.

Appointment of another person to act

7.44.—(1)  [[FORM 7.19]] The court may appoint such person as it thinks fit to appear for, represent or act for the incapacitated person.

(2) The appointment may be made either generally or for the purpose of any particular application or proceeding, or for the exercise of particular rights or powers which the incapacitated person might have exercised but for his incapacity.

(3) The court may make the appointment either of its own motion or on application by—

(a) a person who has been appointed by a court in the United Kingdom or elsewhere to manage the affairs of, or to represent, the incapacitated person, or

(b) any relative or friend of the incapacitated person who appears to the court to be a proper person to make the application, or

(c) the official receiver, or

(d) the person who, in relation to the proceedings, is the responsible insolvency practitioner.

(4) Application under paragraph (3) may be made ex parte; but the court may require such notice of the application as it thinks necessary to be given to the person alleged to be incapacitated, or any other person, and may adjourn the hearing of the application to enable the notice to be given.

Affidavit in support of application

7.45.—(1) Except where made by the official receiver, an application under Rule 7.44(3) shall be supported by an affidavit of a registered medical practitioner as to the mental or physical condition of the incapacitated person.

(2) In the excepted case, a report made by the official receiver is sufficient.

Service of notices following appointment

7.46.  Any notice served on, or sent to, a person appointed under Rule 7.44 has the same effect as if it had been served on, or given to, the incapacitated person.

CHAPTER 8 APPEALS IN INSOLVENCY PROCEEDINGS

Appeals and reviews of court orders (winding up)

7.47.—(1) Every court having jurisdiction under the Act to wind up companies may review, rescind or vary any order made by it in the exercise of that jurisdiction.

(2) An appeal from a decision made in the exercise of that jurisdiction by a county court or by a registrar of the High Court lies to a single judge of the High Court; and an appeal from a decision of that judge on such an appeal lies, with the leave of that judge or the Court of Appeal, to the Court of Appeal.

(3) A county court is not, in the exercise of its jurisdiction to wind up companies, subject to be restrained by the order of any other court, and no appeal lies from its decision in the exercise of that jurisdiction except as provided by this Rule.

(4) Any application for the rescission of a winding-up order shall be made within 7 days after the date on which the order was made.

Appeals in bankruptcy

7.48.—(1) In bankruptcy proceedings, an appeal lies at the instance of the Secretary of State from any order of the court made on an application for the rescission or annulment of a bankruptcy order, or for a bankrupt's discharge.

(2) In the case of an order made by a county court or by a registrar of the High Court, the appeal lies to a single judge of the High Court; and an appeal from a decision of that judge on such an appeal lies, with the leave of that judge or the Court of Appeal, to the Court of Appeal.

Procedure on appeal

7.49.—(1) Subject as follows, the procedure and practice of the Supreme Court relating to appeals to the Court of Appeal apply to appeals in insolvency proceedings.

(2) In relation to any appeal to a single judge of the High Court under section 375(2) (individual insolvency) or Rule 7.47(2) above (company insolvency), any reference in the Rules of the Supreme Court to the Court of Appeal is replaced by a reference to that judge.

(3) In insolvency proceedings, the procedure under Order 59 of the Rules of the Supreme Court (appeal to the Court of Appeal) is by application, and not by summons.

Appeal against decision of Secretary of State or official receiver

7.50.  An appeal under the Act or the Rules against a decision of the Secretary of State or the official receiver shall be brought within 28 days of the notification of the decision.

CHAPTER 9 GENERAL

Principal court rules and practice to apply

7.51.  Except so far as inconsistent with the Insolvency Rules, the Rules of the Supreme Court and the practice of the High Court apply to insolvency proceedings in the High Court, and the County Court Rules and the practice of the county court apply to insolvency proceedings in a county court, in either case with any necessary modifications.

Right of audience

7.52.—(1) Official receivers and deputy official receivers have right of audience in insolvency proceedings, whether in the High Court or a county court.

(2) Subject as above, rights of audience in insolvency proceedings are the same as obtained before the coming into force of the Rules.

Right of attendance (company insolvency)

7.53.—(1) Subject as follows, in company insolvency proceedings any person stating himself in writing, in records kept by the court for that purpose, to be a creditor or member of the company or, where the company is being wound up, a contributory, is entitled, at his own cost, to attend in court or in chambers at any stage of the proceedings.

(2) Attendance may be by the person himself, or his solicitor.

(3) A person so entitled may request the court in writing to give him notice of any step in the proceedings; and, subject to his paying the costs involved and keeping the court informed as to his address, the court shall comply with the request.

(4) If the court is satisfied that the exercise by a person of his rights under this Rule has given rise to costs for the insolvent estate which would not otherwise have been incurred and ought not, in the circumstances, to fall on that estate, it may direct that the costs be paid by the person concerned, to an amount specified.

The person's rights under this Rule are in abeyance so long as those costs are not paid.

(5) The court may appoint one or more persons to represent the creditors, the members or the contributories of an insolvent company, or any class of them, to have the rights conferred by this Rule, instead of the rights being exercisable by any or all of them individually.

If two or more persons are appointed under this paragraph to represent the same interest they must (if at all) instruct the same solicitor.

Insolvency practitioner's solicitor

7.54.  Where in any proceedings the attendance of the responsible insolvency practitioner's solicitor is required, whether in court or in chambers, the insolvency practitioner himself need not attend, unless directed by the court.

Formal defects

7.55.  No insolvency proceedings shall be invalidated by any formal defect or by any irregularity, unless the court before which objection is made considers that substantial injustice has been caused by the defect or irregularity, and that the injustice cannot be remedied by any order of the court.

Restriction on concurrent proceedings and remedies

7.56.  Where in insolvency proceedings the court makes an order staying any action, execution or other legal process against the property of a company, or against the property or person of an individual debtor or bankrupt, service of the order may be effected by sending a sealed copy of the order to whatever is the address for service of the plaintiff or other party having the carriage of the proceedings to be stayed.

Affidavits

7.57.—(1) Subject as follows, the rules and practice obtaining in the High Court with regard to affidavits, their form and contents, and the procedure governing their use, are to be taken as applicable in all insolvency proceedings in any court.

(2) In applying RSC Order 41 (which relates to affidavits generally), there are to be disregarded provisions which are inconsistent with, or necessarily excluded by, the following paragraphs of this Rule.

(3) Where in insolvency proceedings an affidavit is made by the official receiver or the responsible insolvency practitioner, the deponent shall state the capacity in which he makes it, the position which he holds, and the address at which he works.

(4) Notwithstanding RSC Order 41 Rule 8 (affidavit not to be sworn before party's own solicitor), a creditor's affidavit of debt may be sworn before his own solicitor.

(5) The official receiver, any deputy official receiver, or any officer of the court duly authorised in that behalf, may take affidavits and declarations.

Security in court

7.58.—(1) Where security has to be given to the court (otherwise than in relation to costs), it may be given by guarantee, bond or the payment of money into court.

(2) A person proposing to give a bond as security shall give notice to the party in whose favour the security is required, and to the court, naming those who are to be sureties to the bond.

(3) The court shall forthwith give notice to both the parties concerned of a venue for the execution of the bond and the making of any objection to the sureties.

(4) The sureties shall make an affidavit of their sufficiency (unless dispensed with by the party in whose favour the security is required) and shall, if required by the court, attend the court to be cross-examined.

Payment into court

7.59.  The Rules of the Supreme Court and the County Court Rules relating to payment into and out of court of money lodged in court as security for costs apply, in the High Court and a county court respectively, to money lodged in court under the Rules.

Discovery

7.60.—(1) Any party to insolvency proceedings may, with the leave of the court, administer interrogatories to, or obtain discovery from, any other party to those proceedings.

(2) Application under this Rule may be made ex parte.

Office copies of documents

7.61.—(1) Any person who has under the Rules the right to inspect the court file of insolvency proceedings may require the court to provide him with an office copy of any document from the file.

(2) A person's rights under this Rule may be exercised on his behalf by his solicitor.

(3) An office copy provided by the court under this Rule shall be in such form as the registrar thinks appropriate, and shall bear the court's seal.

PART 8 PROXIES AND COMPANY REPRESENTATION

Definition of “proxy”

8.1.—(1)  [[FORMS 8.1 to 8.5]] For the purposes of the Rules, a proxy is an authority given by a person (“the principal”) to another person (“the proxy-holder”) to attend a meeting and speak and vote as his representative.

(2) Proxies are for use at creditors', company or contributories' meetings under the Act or the Rules.

(3) Only one proxy may be given by a person for any one meeting at which he desires to be represented; and it may only be given to one person, being an individual aged 18 or over. But the principal may specify one or more other such individuals to be proxy-holder in the alternative, in the order in which they are named in the proxy.

(4) Without prejudice to the generality of paragraph (3), a proxy for a particular meeting may be given to whoever is to be the chairman of the meeting; and for a meeting held as part of the proceedings in a winding up by the court, or in a bankruptcy, it may be given to the official receiver.

(5) A proxy requires the holder to give the principal's vote on matters arising for determination at the meeting, or to abstain, either as directed or in accordance with the holder's own discretion; and it may authorise or require the holder to propose, in the principal's name, a resolution to be voted on by the meeting.

Issue and use of forms

8.2.—(1) When notice is given of a meeting to be held in insolvency proceedings, and forms of proxy are sent out with the notice, no form so sent out shall have inserted in it the name or description of any person.

(2) No form of proxy shall be used at any meeting except that which is sent out with the notice summoning the meeting, or a substantially similar form.

(3) A form of proxy shall be signed by the principal, or by some person authorised by him (either generally or with reference to a particular meeting). If the form is signed by a person other than the principal, the nature of the person's authority shall be stated.

Use of proxies at meetings

8.3.—(1) A proxy given for a particular meeting may be used at any adjournment of that meeting.

(2) Where the official receiver holds proxies for use at any meeting, his deputy, or any other official receiver, may act as proxy-holder in his place.

Alternatively, the official receiver may in writing authorise another officer of the Department to act for him at the meeting and use the proxies as if that other officer were himself proxy-holder.

(3) Where the responsible insolvency practitioner holds proxies to be used by him as chairman of a meeting, and some other person acts as chairman, the other person may use the insolvency practitioner's proxies as if he were himself proxy-holder.

Retention of proxies

8.4.—(1) Subject as follows, proxies used for voting at any meeting shall be retained by the chairman of the meeting.

(2) The chairman shall deliver the proxies, forthwith after the meeting, to the responsible insolvency practitioner (where that is someone other than himself).

Right of inspection

8.5.—(1) The responsible insolvency practitioner shall, so long as proxies lodged with him are in his hands, allow them to be inspected, at all reasonable times on any business day, by—

(a) the creditors, in the case of proxies used at a meeting of creditors, and

(b) a company's members or contributories, in the case of proxies used at a meeting of the company or of its contributories.

(2) The reference in paragraph (1) to creditors is—

(a) in the case of a company in liquidation or of an individual's bankruptcy, those creditors who have proved their debts, and

(b) in any other case, persons who have submitted in writing a claim to be creditors of the company or individual concerned;

but in neither case does it include a person whose proof or claim has been wholly rejected for purposes of voting, dividend or otherwise.

(3) The right of inspection given by this Rule is also exercisable—

(a) in the case of an insolvent company, by its directors, and

(b) in the case of an insolvent individual, by him.

(4) Any person attending a meeting in insolvency proceedings is entitled, immediately before or in the course of the meeting, to inspect proxies and associated documents to be used in connection with that meeting.

Proxy-holder with financial interest

8.6.—(1) A proxy-holder shall not vote in favour of any resolution which would directly or indirectly place him, or any associate of his, in a position to receive any remuneration out of the insolvent estate, unless the proxy specifically directs him to vote in that way.

(2) This Rule applies also to any person acting as chairman of a meeting and using proxies in that capacity; and in its application to him, the proxy-holder is deemed an associate of his.

Company representation

8.7.—(1) Where a person is authorised under section 375 of the Companies Act to represent a corporation at a meeting of creditors or of the company or its contributories, he shall produce to the chairman of the meeting a copy of the resolution from which he derives his authority.

(2) The copy resolution must be under the seal of the corporation, or certified by the secretary or a director of the corporation to be a true copy.

PART 9 EXAMINATION OF PERSONS CONCERNED IN COMPANY AND INDIVIDUAL INSOLVENCY

Preliminary

9.1.—(1) The Rules in this Part relate to applications to the court for an order under—

(a) [[FORM 9.1]] section 236 (inquiry into company's dealings when it is, or is alleged to be, insolvent), or

(b) [[FORM 9.1]] section 366 (inquiry in bankruptcy, with respect to the bankrupt's dealings).

(2) The following definitions apply—

(a) the person in respect of whom an order is applied for is “the respondent”;

(b) “the applicable section” is section 236 or section 366, according to whether the affairs of a company or those of a bankrupt or (where the application under section 366 is made by virtue of section 368 a debtor are in question;

(c) the company or, as the case may be, the bankrupt or debtor concerned is “the insolvent”.

Form and contents of application

9.2.—(1) The application shall be in writing, and be accompanied by a brief statement of the grounds on which it is made.

(2) The respondent must be sufficiently identified in the application.

(3) It shall be stated whether the application is for the respondent—

(a) to be ordered to appear before the court, or

(b) to answer interrogatories (if so, particulars to be given of the matters in respect of which answers are required), or

(c) to submit affidavits (if so, particulars to be given of the matters to which he is required to swear), or

(d) to produce books, papers or other records (if so, the items in question to be specified),

or for any two or more of those purposes.

(4) The application may be made ex parte.

Order for examination, etc

9.3.—(1) The court may, whatever the purpose of the application, make any order which it has power to make under the applicable section.

(2) The court, if it orders the respondent to appear before it, shall specify a venue for his appearance, which shall be not less than 14 days from the date of the order.

(3) If he is ordered to submit affidavits, the order shall specify—

(a) the matters which are to be dealt with in his affidavits, and

(b) the time within which they are to be submitted to the court.

(4) If the order is to produce books, papers or other records, the time and manner of compliance shall be specified.

(5) The order must be served forthwith on the respondent; and it must be served personally, unless the court otherwise orders.

Procedure for examination

9.4.—(1) At any examination of the respondent, the applicant may attend in person, or be represented by a solicitor with or without counsel, and may put such questions to the respondent as the court may allow.

(2) Any other person who could have applied for an order under the applicable section in respect of the insolvent's affairs may, with the leave of the court and if the applicant does not object, attend the examination and put questions to the respondent (but only through the applicant).

(3) If the respondent is ordered to answer interrogatories, the court shall direct him as to the questions which he is required to answer, and as to whether his answers (if any) are to be made on affidavit.

(4) Where application has been made under the applicable section on information provided by a creditor of the insolvent, that creditor may, with the leave of the court and if the applicant does not object, attend the examination and put questions to the respondent (but only through the applicant).

(5) The respondent may at his own expense employ a solicitor with or without counsel, who may put to him such questions as the court may allow for the purpose of enabling him to explain or qualify any answers given by him, and may make representations on his behalf.

(6) There shall be made in writing such record of the examination as the court thinks proper. The record shall be read over either to or by the respondent and signed by him at a venue fixed by the court.

(7) The written record may, in any proceedings (whether under the Act or otherwise) be used as evidence against the respondent of any statement made by him in the course of his examination.

Record of examination

9.5.—(1) Unless the court otherwise directs, the written record of the respondent's examination, and any answer given by him to interrogatories, and any affidavits submitted by him in compliance with an order of the court under the applicable section, shall not be filed in court.

(2) The written record, answers and affidavits shall not be open to inspection, without an order of the court, by any person other than—

(a) the applicant for an order under the applicable section, or

(b) any person who could have applied for such an order in respect of the affairs of the same insolvent.

(3) Paragraph (2) applies also to so much of the court file as shows the grounds of the application for an order under the applicable section and to any copy of proposed interrogatories.

(4) The court may from time to time give directions as to the custody and inspection of any documents to which this Rule applies, and as to the furnishing of copies of, or extracts from, such documents.

Costs of proceedings under ss.236, 366

9.6.—(1) Where the court has ordered an examination of any person under the applicable section, and it appears to it that the examination was made necessary because information had been unjustifiably refused by the respondent, it may order that the costs of the examination be paid by him.

(2) Where the court makes an order against a person under—

(a) section 237(1) or 367(1) (to deliver up property in his possession which belongs to the insolvent), or

(b) section 237(2) or 367(2) (to pay any amount in discharge of a debt due to the insolvent),

the costs of the application for the order may be ordered by the court to be paid by the respondent.

(3) Subject to paragraphs (1) and (2) above, the applicant's costs shall, unless the court otherwise orders, be paid out of the insolvent estate.

(4) A person summoned to attend for examination under this Chapter shall be tendered a reasonable sum in respect of travelling expenses incurred in connection with his attendance. Other costs falling on him are at the court's discretion.

(5) Where the examination is on the application of the official receiver otherwise than in the capacity of liquidator or trustee, no order shall be made for the payment of costs by him.

PART 10 OFFICIAL RECEIVERS

Appointment of official receivers

10.1.  Judicial notice shall be taken of the appointment under sections 399 to 401 of official receivers and deputy official receivers.

Persons entitled to act on official receiver's behalf

10.2.—(1) In the absence of the official receiver authorised to act in a particular case, an officer authorised in writing for the purpose by the Secretary of State, or by the official receiver himself, may, with the leave of the court, act on the official receiver's behalf and in his place—

(a) in any examination under section 133, 236, 290 or 366, and

(b) in respect of any application to the court.

(2) In case of emergency, where there is no official receiver capable of acting, anything to be done by, to or before the official receiver may be done by, to or before the registrar of the court.

Application for directions

10.3.  The official receiver may apply to the court for directions in relation to any matter arising in insolvency proceedings.

Official receiver's expenses

10.4.—(1) Any expenses incurred by the official receiver (in whatever capacity he may be acting) in connection with proceedings taken against him in insolvency proceedings are to be treated as expenses of the insolvency proceedings.

“Expenses” includes damages.

(2) In respect of any sums due to him under paragraph (1), the official receiver has a charge on the insolvent estate.

PART 11 DECLARATION AND PAYMENT OF DIVIDEND (WINDING UP AND BANKRUPTCY)

Preliminary

11.1.—(1) The Rules in this Part relate to the declaration and payment of dividends in companies winding up and in bankruptcy.

(2) The following definitions apply—

(a) “the insolvent” means the company in liquidation or, as the case may be, the bankrupt; and

(b) “creditors” means those creditors of the insolvent of whom the responsible insolvency practitioner is aware, or who are identified in the insolvent's statement of affairs.

Notice of intended dividend

11.2.—(1) Before declaring a dividend, the responsible insolvency practitioner shall give notice of his intention to do so to all creditors who have not proved their debts.

(2) The notice shall specify a date (“the last date for proving”) up to which proofs may be lodged. The date shall be the same for all creditors, and not less than 21 days from that of the notice.

(3) The insolvency practitioner shall in the notice state his intention to declare a dividend (specified as interim or final, as the case may be) within the period of 4 months from the last date for proving.

Final admission/rejection of proofs

11.3.—(1) The responsible insolvency practitioner shall, within 7 days from the last date for proving, deal with every creditor's proof (in so far as not already dealt with) by admitting or rejecting it in whole or in part, or by making such provision as he thinks fit in respect of it.

(2) The insolvency practitioner is not obliged to deal with proofs lodged after the last date for proving; but he may do so, if he thinks fit.

Postponement or cancellation of dividend

11.4.  If in the period of 4 months referred to in Rule 11.2(3)—

(a) the responsible insolvency practitioner has rejected a proof in whole or in part and application is made to the court for his decision to be reversed or varied, or

(b) application is made to the court for the insolvency practitioner's decision on a proof to be reversed or varied, or for a proof to be expunged, or for a reduction of the amount claimed,

the insolvency practitioner may postpone or cancel the dividend.

Decision to declare dividend

11.5.—(1) If the responsible insolvency practitioner has not, in the 4-month period referred to in Rule 11.2(3), had cause to postpone or cancel the dividend, he shall within that period proceed to declare the dividend of which he gave notice under that Rule.

(2) Except with the leave of the court, the insolvency practitioner shall not declare the dividend so long as there is pending any application to the court to reverse or vary a decision of his on a proof, or to expunge a proof or to reduce the amount claimed.

If the court gives leave under this paragraph, the insolvency practitioner shall make such provision in respect of the proof in question as the court directs.

Notice of declaration

11.6.—(1) The responsible insolvency practitioner shall give notice of the dividend to all creditors who have proved their debts.

(2) The notice shall include the following particulars relating to the insolvency and the administration of the insolvent estate—

(a) amounts realised from the sale of assets, indicating (so far as practicable) amounts raised by the sale of particular assets;

(b) payments made by the insolvency practitioner in the administration of the insolvent estate;

(c) provision (if any) made for unsettled claims, and funds (if any) retained for particular purposes;

(d) the total amount to be distributed, and the rate of dividend;

(e) whether, and if so when, any further dividend is expected to be declared.

(3) The dividend may be distributed simultaneously with the notice declaring it.

(4) Payment of dividend may be made by post, or arrangements may be made with any creditor for it to be paid to him in another way, or held for his collection.

(5) Where a dividend is paid on a bill of exchange or other negotiable instrument, the amount of the dividend shall be endorsed on the instrument, or on a certified copy of it, if required to be produced by the holder for that purpose.

Notice of no, or no further, dividend

11.7.  If the responsible insolvency practitioner gives notice to creditors that he is unable to declare any dividend or (as the case may be) any further dividend, the notice shall contain a statement to the effect either—

(a) that no funds have been realised, or

(b) that the funds realised have already been distributed or used or allocated for defraying the expenses of administration.

Proof altered after payment of dividend

11.8.—(1) If after payment of dividend the amount claimed by a creditor in his proof is increased, the creditor is not entitled to disturb the distribution of the dividend; but he is entitled to be paid, out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he has failed to receive.

(2) Any dividend or dividends payable under paragraph (1) shall be paid before the money there referred to is applied to the payment of any such further dividend.

(3) If, after a creditor's proof has been admitted, the proof is withdrawn or expunged, or the amount of it is reduced, the creditor is liable to repay to the responsible insolvency practitioner, for the credit of the insolvent estate, any amount over paid by way of dividend.

Secured creditors

11.9.—(1) The following applies where a creditor re-values his security at a time when a dividend has been declared.

(2) If the revaluation results in a reduction of his unsecured claim ranking for dividend, the creditor shall forthwith repay to the responsible insolvency practitioner, for the credit of the insolvent estate, any amount received by him as dividend in excess of that to which he would be entitled having regard to the revaluation of the security.

(3) If the revaluation results in an increase of his unsecured claim, the creditor is entitled to receive from the insolvency practitioner, out of any money for the time being available for the payment of a further dividend, before any such further dividend is paid, any dividend or dividends which he has failed to receive, having regard to the revaluation of the security.

However, the creditor is not entitled to disturb any dividend declared (whether or not distributed) before the date of the revaluation.

Disqualification from dividend

11.10.  If a creditor contravenes any provision of the Act or the Rules relating to the valuation of securities, the court may, on the application of the responsible insolvency practitioner, order that the creditor be wholly or partly disqualified from participation in any dividend.

Assignment of right to dividend

11.11.—(1) If a person entitled to a dividend gives notice to the responsible insolvency practitioner that he wishes the dividend to be paid to another person, or that he has assigned his entitlement to another person, the insolvency practitioner shall pay the dividend to that other accordingly.

(2) A notice given under this Rule must specify the name and address of the person to whom payment is to be made.

Preferential creditors

11.12.—(1) Subject as follows, the Rules in this Part apply with respect to any distribution made in the insolvency to preferential creditors, with such adaptations as are appropriate considering that such creditors are of a limited class.

(2) The notice by the responsible insolvency practitioner under Rule 11.2, where a dividend is to be declared for preferential creditors, need only be given to those creditors in whose case he has reason to believe that their debts are preferential.

Debt payable at future time

11.13.—(1) Where a creditor has proved for a debt of which payment is not due at the date of the declaration of dividend, he is entitled to dividend equally with other creditors, but subject as follows.

(2) For the purpose of dividend (and for no other purpose), the amount of the creditor's admitted proof (or, if a distribution has previously been made to him, the amount remaining outstanding in respect of his admitted proof) shall be reduced by an amount calculated as follows—

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• I is 5 per cent. and M is the number of months (expressed, if need be, as, or as including, fractions of months) between the declaration of dividend and the date when payment of the creditor's debt would otherwise be due.

(3) Other creditors are not entitled to interest out of surplus funds under section 189(2) or (as the case may be) 328(4) until any creditor to whom paragraph (1) and (2) apply has been paid the full amount of his debt.

PART 12 MISCELLANEOUS AND GENERAL

Power of Secretary of State to regulate certain matters

12.1.—(1) Pursuant to paragraph 27 of Schedule 8 to the Act, and paragraph 30 of Schedule 9 to the Act, the Secretary of State may make regulations with respect to the following matters arising in companies winding up and individual bankruptcy—

(a) the preparation and keeping by liquidators, trustees, provisional liquidators, interim receivers and the official receiver, of books, accounts and other records, and their production to such persons as may be authorised or required to inspect them;

(b) the auditing of liquidators' and trustees' accounts;

(c) the manner in which liquidators and trustees are to act in relation to the insolvent company's or bankrupt's books, papers and other records, and the manner of their disposal by the responsible insolvency practitioner or others;

(d) the supply—

(i) in company insolvency, by the liquidator to creditors and members of the company, contributories in its winding up and the liquidation committee, and

(ii) in individual insolvency, by the trustee to creditors and the creditors' committee,

of copies of documents relating to the insolvency and the affairs of the insolvent company or individual (on payment, in such cases as may be specified by the regulations, of the specified fee);

(e) the manner in which insolvent estates are to be distributed by liquidators and trustees, including provision with respect to unclaimed funds and dividends;

(f) the manner in which moneys coming into the hands of a liquidator or trustee in the course of his administration are to be handled and, in the case of a liquidator, invested, and the payment of interest on sums which, in pursuance of regulations made by virtue of this sub-paragraph, have been paid into the Insolvency Service Account;

(g) the amount (or the manner of determining the amount) to be paid to the official receiver by way of remuneration when acting as provisional liquidator, liquidator, interim receiver or trustee.

(2) Any reference in paragraph (1) to a trustee includes a reference to the official receiver when acting as receiver and manager under section 287.

(3) Regulations made pursuant to paragraph (1) may—

(a) confer a discretion on the court;

(b) make non-compliance with any of the regulations a criminal offence;

(c) make different provision for different cases, including different provision for different areas.

Costs, expenses, etc

12.2.  All fees, costs, charges and other expenses incurred in the course of winding up or bankruptcy proceedings are to be regarded as expenses of the winding up or, as the case may be, of the bankruptcy.

Provable debts

12.3.—(1) Subject as follows, in both winding up and bankruptcy, all claims by creditors are provable as debts against the company or, as the case may be, the bankrupt, whether they are present or future, certain or contingent, ascertained or sounding only in damages.

(2) The following are not provable—

(a) in bankruptcy, any fine imposed for an offence, and any obligation arising under an order made in family or domestic proceedings;

(b) in winding up or bankruptcy, any obligation arising under a confiscation order made under section 1 of the Drug Trafficking Offences Act 1986

“Fine”, “domestic proceedings” and “family proceedings” have the meanings given by section 281(8) of the Act (which applies the Magistrates' Courts Act 1980 and the Matrimonial and Family Proceedings Act 1984).

(3) Nothing in this Rule prejudices any enactment or rule of law under which a particular kind of debt is not provable, whether on grounds of public policy or otherwise.

Notices

12.4.—(1) All notices required or authorised by or under the Act or the Rules to be given must be in writing, unless it is otherwise provided, or the court allows the notice to be given in some other way.

(2) Where in any proceedings a notice is required to be sent or given by the official receiver or by the responsible insolvency practitioner, the sending or giving of it may be proved by means of a certificate—

(a) in the case of the official receiver, by him or a member of his staff, and

(b) in the case of the insolvency practitioner, by him, or his solicitor, or a partner or an employee of either of them,

that the notice was duly posted.

(3) In the case of a notice to be sent or given by a person other than the official receiver or insolvency practitioner, the sending or giving of it may be proved by means of a certificate by that person that he posted the notice, or instructed another person (naming him) to do so.

(4) A certificate under this Rule may be endorsed on a copy or specimen of the notice to which it relates.

Evidence of proceedings at meetings

12.5.—(1) A minute of proceedings at a meeting (held under the Act or the Rules) of a person's creditors, or of the members of a company, or of the contributories in a company's liquidation, signed by a person describing himself as, or appearing to be, the chairman of that meeting is admissible in insolvency proceedings without further proof.

(2) The minute is prima facie evidence that—

(a) the meeting was duly convened and held,

(b) all resolutions passed at the meeting were duly passed, and

(c) all proceedings at the meeting duly took place.

Documents issuing from Secretary of State

12.6.—(1) Any document purporting to be, or to contain, any order, directions or certificate issued by the Secretary of State shall be received in evidence and deemed to be or (as the case may be) contain that order or certificate, or those directions, without further proof, unless the contrary is shown.

(2) Paragraph (1) applies whether the document is signed by the Secretary of State himself or an officer on his behalf.

(3) Without prejudice to the foregoing, a certificate signed by the Secretary of State or an officer on his behalf and confirming—

(a) the making of any order,

(b) the issuing of any document, or

(c) the exercise of any discretion, power or obligation arising or imposed under the Act or the Rules,

is conclusive evidence of the matters dealt with in the certificate.

Forms for use in insolvency proceedings

12.7.—(1) The forms contained in Schedule 4 to the Rules shall be used in and in connection with, insolvency proceedings, whether in the High Court or a county court.

(2) The forms shall be used with such variations, if any, as the circumstances may require.

(3) Where any form contained in Schedule 4 is substantially the same as one used for a corresponding purpose under the law and practice obtaining before the coming into force of the Rules, the latter may continue to be used (with the necessary modifications) until the Lord Chancellor otherwise directs.

Insolvency practitioner's security

12.8.—(1) Wherever under the Rules any person has to appoint, or certify the appointment of, an insolvency practitioner to any office, he is under a duty to satisfy himself that the person appointed or to be appointed has security for the proper performance of his functions.

(2) It is the duty—

(a) of the creditors' committee in companies administration, administrative receivership and bankruptcy,

(b) of the liquidation committee in companies winding up, and

(c) of any committee of creditors established for the purposes of a voluntary arrangement under Part I or VIII of the Act,

to review from time to time the adequacy of the responsible insolvency practitioner's security.

(3) In any insolvency proceedings the cost of the responsible insolvency practitioner's security shall be defrayed as an expense of the proceedings.

Time-limits

12.9.  The provisions of Order 3 of the Rules of the Supreme Court, except Rules 3 and 6, apply as regards computation of time in respect of anything required or authorised by the Rules to be done.

Service by post

12.10.—(1) For a document to be properly served by post, it must be contained in an envelope addressed to the person on whom service is to be effected, and pre-paid for either first or second class post.

(2) Where first class post is used, the document is treated as served on the second business day after the date of posting, unless the contrary is shown.

(3) Where second class post is used, the document is treated as served on the fourth business day after the date of posting, unless the contrary is shown.

(4) The date of posting is presumed, unless the contrary is shown, to be the date shown in the post-mark on the envelope in which the document is contained.

General provisions as to service

12.11.—(1) Subject as follows, Order 65 of the Rules of the Supreme Court applies as regards any matter relating to the service of documents and the giving of notice in insolvency proceedings.

(2) In Order 65 Rule 7, the expression “other originating process” does not include any application in insolvency proceedings.

(3) Order 65 Rule 9 does not apply.

(4) In Order 65 Rule 10, the expression “process” includes any application in insolvency proceedings.

Service outside the jurisdiction

12.12.—(1) Order 11 of the Rules of the Supreme Court, and the corresponding County Court Rules, do not apply in insolvency proceedings.

(2) A bankruptcy petition may, with the leave of the court, be served outside England and Wales in such manner as the court may direct.

(3) Where for the purposes of insolvency proceedings any process or order of the court, or other document, is required to be served on a person who is not in England and Wales, the court may order service to be effected within such time, on such person, at such place and in such manner as it thinks fit, and may also require such proof of service as it thinks fit.

(4) An application under this Rule shall be supported by an affidavit stating—

(a) the grounds on which the application is made, and

(b) in what place or country the person to be served is, or probably may be found.

Confidentiality of documents

12.13.—(1) Where in insolvency proceedings the responsible insolvency practitioner considers, in the case of a document forming part of the records of the insolvency, that—

(a) it should be treated as confidential, or

(b) it is of such a nature that its disclosure would be calculated to be injurious to the interests of the insolvent's creditors or, in the case of a company's insolvency, its members or the contributories in its winding up,

he may decline to allow it to be inspected by a person who would otherwise be entitled to inspect it.

(2) The persons to whom the insolvency practitioner may under this Rule refuse inspection include the members of a liquidation committee or a creditors' committee.

(3) Where under this Rule the insolvency practitioner determines to refuse inspection of a document, the person wishing to inspect it may apply to the court for that determination to be overruled; and the court may either overrule it altogether, or sustain it subject to such conditions (if any) as it thinks fit to impose.

Notices sent simultaneously to the same person

12.14.  Where under the Act or the Rules a document of any description is to be sent to a person (whether or not as a member of a class of persons to whom that same document is to be sent), it may be sent as an accompaniment to any other document or information which the person is to receive, with or without modification or adaptation of the form applicable to that document.

Right to copy documents

12.15.  Where the Rules confer a right for any person to inspect documents, the right includes that of taking copies of those documents, on payment—

(a) in the case of documents on the court's file of proceedings, of the fee chargeable under any order made under section 130 of the Supreme Court Act 1981 or under section 128 of the County Courts Act 1984, and

(b) otherwise, of the appropriate fee.

Non-receipt of notice of meeting

12.16.  Where in accordance with the Act or the Rules a meeting of creditors or other persons is summoned by notice, the meeting is presumed to have been duly summoned and held, notwithstanding that not all those to whom the notice is to be given have received it.

Right to have list of creditors

12.17.—(1) This Rule applies in any of the following proceedings—

(a) proceedings under Part II of the Act (company administration),

(b) a creditors' voluntary winding up, or a winding up by the court, and

(c) proceedings in bankruptcy.

(2) In any such proceedings a creditor who under the Rules has the right to inspect documents on the court file also has the right to require the responsible insolvency practitioner to furnish him with a list of the insolvent's creditors and the amounts of their respective debts.

This does not apply if a statement of the insolvent's affairs has been filed in court or, in the case of a creditors' voluntary winding up, been delivered to the registrar of companies.

(3) The insolvency practitioner, on being required by any person to furnish the list, shall send it to him, but is entitled to charge the appropriate fee for doing so.

False claim of status as creditor, etc

12.18.—(1) Where the Rules provide for creditors, members of a company or contributories in a company's winding up a right to inspect any documents, whether on the court's file or in the hands of a responsible insolvency practitioner or other person, it is an offence for a person, with the intention of obtaining a sight of documents which he has not under the Rules any right to inspect, falsely to claim a status which would entitle him to inspect them.

(2) A person guilty of an offence under this Rule is liable to imprisonment or a fine, or both.

Execution overtaken by judgment debtor's insolvency

12.19.—(1) This Rule applies where execution has been taken out against property of a judgment debtor, and notice is given to the sheriff or other officer charged with the execution—

(a) under section 184(1) (that a winding-up order has been made against the debtor, or that a provisional liquidator has been appointed, or that a resolution for voluntary winding up has been passed); or

(b) under section 184(4) (that a winding-up petition has been presented or a winding-up order made, or that a meeting has been called at which there is to be proposed a resolution for voluntary winding up, or that such a resolution has been passed); or

(c) under section 346(2) (that the judgment debtor has been adjudged bankrupt); or

(d) under section 346(3)(b) (that a bankruptcy petition has been presented in respect of him).

(2) Subject as follows, the notice shall be in writing and be delivered by hand at, or sent by recorded delivery to, the office of the under-sheriff or (as the case may be) of the officer charged with the execution.

(3) Where the execution is in a county court, and the officer in charge of it is the registrar of that court, then if—

(a) there is filed in that court in respect of the judgment debtor a winding-up or bankruptcy petition, or

(b) there is made by that court in respect of him a winding-up order or an order appointing a provisional liquidator, or a bankruptcy order or an order appointing an interim receiver,

section 184 or (as the case may be) 346 is deemed satisfied as regards the requirement of a notice to be served on, or given to, the officer in charge of the execution.

The Gazette

12.20.—(1) A copy of the Gazette containing any notice required by the Act or the Rules to be gazetted is evidence of any facts stated in the notice.

(2) In the case of an order of the court notice of which is required by the Act or the Rules to be gazetted, a copy of the Gazette containing the notice may in any proceedings be produced as conclusive evidence that the order was made on the date specified in the notice.

(3) Where an order of the court which is gazetted has been varied, and where any matter has been erroneously or inaccurately gazetted, the person whose responsibility it was to procure the requisite entry in the Gazette shall forthwith cause the variation of the order to be gazetted or, as the case may be, a further entry to be made in the Gazette for the purpose of correcting the error or inaccuracy.

Punishment of offences

12.21.—(1) Schedule 5 to the Rules has effect with respect to the way in which contraventions of the Rules are punishable on conviction.

(2) In relation to an offence under a provision of the Rules specified in the first column of the Schedule (the general nature of the offence being described in the second column), the third column shows whether the offence is punishable on conviction on indictment, or on summary conviction, or either in the one way or the other.

(3) The fourth column shows, in relation to an offence, the maximum punishment by way of fine or imprisonment which may be imposed on a person convicted of the offence in the way specified in relation to it in the third column (that is to say, on indictment or summarily), a reference to a period of years or months being to a term of imprisonment of that duration.

(4) The fifth column shows (in relation to an offence for which there is an entry in that column) that a person convicted of the offence after continued contravention is liable to a daily default fine; that is to say, he is liable on a second or subsequent conviction of the offence to the fine specified in that column for each day on which the contravention is continued (instead of the penalty specified for the offence in the fourth column of the Schedule).

(5) Section 431 (summary proceedings), as it applies to England and Wales, has effect in relation to offences under the Rules as to offences under the Act.

PART 13 INTERPRETATION AND APPLICATION

Introductory

13.1.  This Part of the Rules has effect for their interpretation and application; and any definition given in this Part applies except, and in so far as, the context otherwise requires.

“The court”; “the registrar”

13.2.—(1) Anything to be done under or by virtue of the Act or the Rules by, to or before the court may be done by, to or before a judge or the registrar.

(2) The registrar may authorise any act of a formal or administrative character which is not by statute his responsibility to be carried out by the chief clerk or any other officer of the court acting on his behalf, in accordance with directions given by the Lord Chancellor.

(3) In individual insolvency proceedings, “the registrar” means a Registrar in Bankruptcy of the High Court, or the registrar or deputy registrar of a county court.

(4) In company insolvency proceedings in the High Court, “the registrar” means—

(a) subject to the following paragraph, a Registrar in Bankruptcy of the High Court;

(b) where the proceedings are in the District Registry of Birmingham, Bristol, Cardiff, Leeds, Liverpool, Manchester, Newcastle-upon-Tyne or Preston, the District Registrar.

(5) In company insolvency proceedings in a county court, “the registrar” means the officer of the court whose duty it is to exercise the functions which in the High Court are exercised by a registrar.

“Give notice”, etc

13.3.—(1) A reference in the Rules to giving notice, or to delivering, sending or serving any document, means that the notice or document may be sent by post, unless under a particular Rule personal service is expressly required.

(2) Any form of post may be used, unless under a particular Rule a specified form is expressly required.

(3) Personal service of a document is permissible in all cases.

(4) Notice of the venue fixed for an application may be given by service of the sealed copy of the application under Rule 7.4(3).

Notice, etc. to solicitors

13.4.  Where under the Act or the Rules a notice or other document is required or authorised to be given to a person, it may, if he has indicated that his solicitor is authorised to accept service on his behalf, be given instead to the solicitor.

Notice to joint liquidators, joint trustees, etc

13.5.  Where two or more persons are acting jointly as the responsible insolvency practitioner in any proceedings, delivery of a document to one of them is to be treated as delivery to them all.

“Venue”

13.6.  References to the “venue” for any proceeding or attendance before the court, or for a meeting, are to the time, date and place for the proceeding, attendance or meeting.

“Insolvency proceedings”

13.7.  “ Insolvency proceedings” means any proceedings under the Act or the Rules.

“Insolvent estate”

13.8.  References to “ the insolvent estate” are—

 (a) in relation to a company insolvency, the company's assets, and

13.8.

 (b) in relation to an individual insolvency, the bankrupt's estate or (as the case may be) the debtor's property.

“Responsible insolvency practitioner”, etc

13.9.—(1) In relation to any insolvency proceedings, “ the responsible insolvency practitioner” means —

(a) the person acting in a company insolvency, as supervisor of a voluntary arrangement under Part I of the Act, or as administrator, administrative receiver, liquidator or provisional liquidator;

(b) the person acting in an individual insolvency, as the supervisor of a voluntary arrangement under Part VIII of the Act, or as trustee or interim receiver;

(c) the official receiver acting as receiver and manager of a bankrupt's estate.

(2) Any reference to the liquidator, provisional liquidator, trustee or interim receiver includes the official receiver when acting in the relevant capacity.

“Petitioner”

13.10.  In winding up and bankruptcy, references to “ the petitioner” or “the petitioning creditor” include any person who has been substituted as such, or been given carriage of the petition.

“The appropriate fee”

13.11.  “ The appropriate fee” means—

 (a) in Rule 6.192(2) (payor under income payments order entitled to clerical etc. costs), 50 pence; and

13.11.

 (b) in other cases, 15 pence per A4 or A5 page, and 30 pence per A3 page.

“Debt”, “liability” (winding up)

13.12.—(1) “ Debt”, in relation to the winding up of a company, means (subject to the next paragraph) any of the following—

(a) any debt or liability to which the company is subject at the date on which it goes into liquidation;

(b) any debt or liability to which the company may become subject after that date by reason of any obligation incurred before that date; and

(c) any interest provable as mentioned in Rule 4.93(1).

(2) In determining for the purposes of any provision of the Act or the Rules about winding up, whether any liability in tort is a debt provable in the winding up, the company is deemed to become subject to that liability by reason of an obligation incurred at the time when the cause of action accrued.

(3) For the purposes of references in any provision of the Act or the Rules about winding up to a debt or liability, it is immaterial whether the debt or liability is present or future, whether it is certain or contingent, or whether its amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion; and references in any such provision to owing a debt are to be read accordingly.

(4) In any provision of the Act or the Rules about winding up, except in so far as the context otherwise requires, “liability” means (subject to paragraph (3) above) a liability to pay money or money's worth, including any liability under an enactment, any liability for breach of trust, any liability in contract, tort or bailment, and any liability arising out of an obligation to make restitution.

Expressions used generally

13.13.—(1) “ Business day” —

(a) in relation to the High Court has the same meaning as in Order 65, Rule 5(4), and

(b) in relation to a county court means any day on which the court office is open in accordance with Order 2, Rule 2 of the County Court Rules.

(2) “The Department” means the Department of Trade and Industry.

(3) “File in court” means deliver to the court for filing.

(4) “The Gazette” means the London Gazette.

(5) “General regulations” means regulations made by the Secretary of State under Rule 12.1.

(6) “Prescribed order of priority” means the order of priority of payments laid down by Chapter 20 of Part 4 of the Rules, or Chapter 23 of Part 6.

Application

13.14.—(1) Subject to paragraph (2) of this Rule, and save where otherwise expressly provided, the Rules apply—

(a) to administrative receivers appointed on or after the day on which the Rules come into force,

(b) to bankruptcy proceedings where the bankruptcy petition is presented on or after the day on which the Rules come into force, and

(c) to all other insolvency proceedings commenced on or after that day.

(2) The Rules also apply to winding-up and bankruptcy proceedings commenced before that day to which provisions of the Act are applied by Schedule 11 to the Act, to the extent necessary to give effect to those provisions.