The Insolvency Rules (Northern Ireland) 1991

PARTS 7 TO 12

PART 7 COURT PROCEDURE AND PRACTICE

CHAPTER 1 GENERAL PROCEDURE

Heading and title of proceedings

7.01.—(1) Every proceeding under Parts II to VII of the Order shall be headed and, with any necessary additions, be intituled—

“IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND CHANCERY DIVISION (COMPANY INSOLVENCY)

or in respect of proceedings in the winding up of companies

(COMPANIES WINDING UP)

IN THE MATTER OF (name of company to which the proceedings relate)

AND IN THE MATTER OF THE INSOLVENCY (NORTHERN IRELAND) ORDER 1989”.

(2) Every proceeding under Parts VIII to X of the Order shall be headed and, with any necessary additions, intituled—

“IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND CHANCERY DIVISION (BANKRUPTCY)

Re (name and short description, including any current trading name, of debtor or bankrupt to which the proceedings relate)”.

[E.R.7.26]

Court and chambers

7.02.—(1) The following matters and applications shall be heard in open court—

(a) matters and applications heard by the Judge, except those referred by the Master to be heard by the Judge in chambers or directed by the Judge to be so heard;

(b) petitions to wind up companies;

(c) applications by bankrupts for leave to be a director of or directly or indirectly to take part or be concerned in the promotion, formation or management of a company;

(d) public examinations of bankrupts or officers of a company; and

(e) opposed applications for discharge of bankrupts or for the suspension or the lifting of the suspension of discharge.

(2) Every other matter or application before the Master shall be heard in chambers.

[E.R.7.6]

Judge and Master

7.03.—(1) The following applications shall be made direct to the Judge—

(a) applications for the commital of any person to prison for contempt;

(b) applications for injunctions or for the modification or discharge of injunctions;

(c) applications for interlocutory relief or directions after a matter has been referred to the Judge;

(d) appeals from an order or decision of the Master;

(e) applications pursuant to Article 107 (sanctioning dispositions made after commencement of winding up of company);

(f) petitions for administration orders;

(g) applications after an administration order has been made, pursuant to Article 27(3) (for directions) or Article 30(3) (to discharge or vary the order, etc.); and

(h) applications pursuant to Article 18(3) (to stay a winding up or discharge an administration order or for directions where a company voluntary arrangement has been approved).

(2) Subject to paragraph (1), unless the Judge has given a general or special direction to the contrary, the jurisdiction of the court to hear and determine an application may be exercised by the Master, and the application shall be made to the Master in the first instance.

(3) Where the application is made to the Master he may, after giving any necessary directions, 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 Master 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.

(5) Subject to this Rule, anything to be done under or by virtue of the Order or the Rules by, to or before the court may be done by, to or before the Judge or the Master.

(6) Order 32, rules 11 and 12 of the Supreme Court Rules do not apply in insolvency proceedings.

Transfer of certain proceedings

7.04.—(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 court, or

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

(2) The Judge may, of his own motion, order the transfer to the Chancery Division of any such proceedings as are mentioned in paragraph (3) and are pending against the company or individual concerned (“the insolvent”) in another Division of 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 Master 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.

[E.R.7.15]

CHAPTER 2 APPLICATIONS

Preliminary

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

(a) an administration order under Part III,

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

(c) a bankruptcy order under Part IX

of the Order.

[E.R.7.1]

Interpretation

7.06.—(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[FORM 7.01]

“ordinary application” means any other application to the court.[FORM 7.02]

(2) Every application shall be in the form appropriate to the application concerned.

[E.R.7.2]

Form and contents of application

7.07.—(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 Order or the 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.

[E.R.7.3]

Filing and service of application

7.08.—(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 to paragraph (6) and Rule 7.09, 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), 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 Order or the 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 Order or the Rules under which the application is made provides otherwise, and subject to paragraph (6), the application must be served at least 14 days before the hearing date.

(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.

[E.R.7.4]

Other hearings ex parte

7.09.—(1) Where the relevant provisions of the Order or the 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 7.08(2).

(3) Alternatively, the court may fix a venue for the application to be heard, in which case Rule 7.08 applies (so far as relevant).

[E.R.7.5]

Use of affidavit evidence

7.10.—(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.

[E.R.7.7]

Filing and service of affidavits

7.11.  Unless the provision of the Order or the 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 hearing date, 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 hearing date.

[E.R.7.8]

Use of reports

7.12.—(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

(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 nominee or a supervisor of a voluntary arrangement under Part II or VIII of the Order,

(iv) a special manager, or

(v) an insolvency practitioner appointed under Article 247(2).

(2) In any case where a report is filed instead of an affidavit, the report shall be treated for the purposes of Rule 7.11 and any hearing before the court as if it were an affidavit.

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

[E.R.7.9]

Adjournment of hearing; directions

7.13.—(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 the Master 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 7.12(1)(b);

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

[E.R.7.10]

CHAPTER 3 SHORTHAND WRITERS

Nomination and appointment of shorthand writers

7.14.—(1) The Judge may in writing nominate one or more persons to be official shorthand writers to the court. [FORM 7.03]

(2) 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 Article 113, 200,2 63 or 337.[FORM 7.04] [FORM 7.05]

(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.

[E.R.7.16]

Cost of shorthand note

7.15.  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.

[E.R.7.18]

Remuneration

7.16.  The remuneration of the shorthand writer 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, at the rates payable for taking a note of evidence and making a transcript for use in the Court of Appeal.

[E.R.7.17]

Mechanical recording

7.17.—(1) The court may, instead of appointing a shorthand writer to take down evidence, direct that the whole or part of such evidence be recorded by mechanical means.

(2) Where evidence is recorded by mechanical means the person who operated the recording machine shall file in court the mechanical record so made, accompanied by a certificate attached to each recording that it is a complete recording or a continuous part of a complete recording taken at the proceedings to which it relates.

(3) Where the court directs that a transcript be made of evidence recorded by mechanical means the transcript shall be certified by the person responsible for transcribing the record as a correct and complete transcript of the mechanical record referred to in the certificate.

(4) The costs of a mechanical recording of an examination of a person made at the instance of the official receiver shall be deemed an expense of the official receiver in the proceedings.

(5) The costs of the mechanical recording shall be paid by the party at whose instance it was made, or out of the insolvent estate, or otherwise as the court may direct.

CHAPTER 4 ENFORCEMENT PROCEDURES

Meaning of “property”

7.18.  In this Chapter references to property include books, papers and records.

[E.R.7.21(3)]

Enforcement of court orders

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

[E.R.7.19(1)]

Orders enforcing compliance with the Order

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) Article 34, 57 or 111 (duty to submit statement of affairs in administration, administrative receivership or winding up),

(b) Article 121(2) (liquidator to furnish information, books, papers, etc.), or

(c) Article 199 (duty of various persons to co-operate with office-holder).

(2) The competent person for this purpose is—

(a) under Article 34, the administrator,

(b) under Article 57, the administrative receiver,

(c) under Article 111 or 121(2), the official receiver, and

(d) under Article 199, 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.

[E.R.7.20]

Warrants under Article 114 or 335

7.21.  When a person is arrested under a warrant issued by the court under Article 114 (officer of company failing to attend for public examination), or Article 335 (arrest of debtor or bankrupt)— [FORM 7.06] [FORM 7.07]]

(a) the constable 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[FORM 7.09]

(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 constable 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.

[E.R.7.22]

Warrants under Article 200 or 337

7.22.—(1) When a person is arrested under a warrant issued under Article 200 (inquiry into insolvent company's dealings) or 337 (the equivalent in bankruptcy), the constable arresting him shall forthwith bring him before the court in order that he may be examined. [FORM 7.08]

(2) If he cannot immediately be brought up for examination, the constable 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.[FORM 7.09]

(3) After arresting the person named in the warrant, the constable 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) direct the governor of the prison to produce the person for examination at the time and place appointed, and[FORM 7.09]

(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 constable seizing it pending the receipt of written orders from the court as to its disposal,

as may be directed by the court.

[E.R.7.23]

Warrants under Article 336

7.23.—(1) A warrant issued under Article 336(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) Any property seized under a warrant issued under Article 336(2) or (3) shall be—[FORM 7.10] [FORM 7.11]

(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 person seizing it pending the receipt of written orders from the court as to its disposal,

as may be directed by the warrant.

[E.R.7.25]

CHAPTER 5 COURT RECORDS AND RETURNS

Court records

7.24.  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.

[E.R.7.27]

Inspection of records

7.25.—(1) Subject to paragraph (2), 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 Master 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.

[E.R.7.28]

File of court proceedings

7.26.—(1) In respect of all insolvency proceedings, the court shall open and maintain a file for each case; and (subject to directions of the Master) 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 Supreme Court.

[E.R.7.30]

Right to inspect the file

7.27.—(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 II to VII of the Order, 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 Order, 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, with a statutory demand.

(3) The right of inspection conferred by paragraph (1) or (2) 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.

(6) An application for a direction of the court under paragraph (5) 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.

(7) If, for the purpose of powers conferred by the Order or the Rules, 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).

(8) Paragraphs (2) and (3) of Rule 7.25 apply in respect of the court's file of any proceedings as they apply in respect of court records.

[E.R.7.31]

Filing of Gazette notices and advertisements

7.28.—(1) A copy of every issue of the Gazette shall be preserved in the court for a period of not less than 2 years.

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

(4) 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.

[E.R.7.32]

CHAPTER 6 COSTS AND TAXATION

Application of Supreme Court Rules

7.29.  Subject to provision to inconsistent effect made in this Chapter, Order 62 of the Supreme Court Rules applies to insolvency proceedings in the High Court with any necessary modifications.

[E.R.7.33]

Requirement to tax costs

7.30.—(1) Subject to paragraphs (2) and (4), where the costs of any person are payable out of the insolvent estate, those costs shall be taxed unless agreed between the responsible insolvency practitioner and the person entitled to payment, and in the absence of such agreement the responsible insolvency practitioner may require taxation by notice in writing requiring that person to deliver his bill of costs to the Taxing Master for taxation.

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

(3) Where the costs of any person employed by a responsible insolvency practitioner in insolvency proceedings are required to be taxed or fixed by order of the court, this does not preclude the responsible 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 or when fixed by the court, prove to have been overpaid, with interest at the rate applicable to a money judgment of the High Court 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 specified in Order 62, rule 12 of the Supreme Court Rules.

(6) This Rule applies additionally (with any necessary modifications) to winding-up and bankruptcy proceedings commenced before the coming into operation of the Rules and in its application to such proceedings “the responsible insolvency practitioner” includes the Official Assignee for bankruptcy for Northern Ireland and the Official Assignee for company liquidations for Northern Ireland.

(7) In this Rule “costs” does not include the remuneration of the responsible insolvency practitioner.

[E.R.7.34]

Measurement of remuneration by Taxing Master

7.31.—(1) Where under the Rules the court is required to fix or is authorised to allow the remuneration of a responsible insolvency practitioner or of any person employed by him in insolvency proceedings, it may direct that such remuneration be measured by the Taxing Master.

(2) Paragraphs (3) to (9) apply where a direction is given under paragraph (1).

(3) The person whose remuneration is to be measured shall lodge in the Taxing Master's Office a bill containing particulars of his charges and disbursements and a copy of the court's direction.

(4) Upon lodgment of the bill the Taxing Master shall appoint a time and place at which he will proceed to measure the remuneration and shall give notice thereof to the person lodging the bill and to such other persons, if any, to whom he considers notice ought to be given.

(5) Upon receiving such notice the person lodging the bill shall attend on the Taxing Master in accordance therewith and shall produce such information as the Taxing Master may require.

(6) Order 62, rule 22 of the Supreme Court Rules applies in respect of the certification of such measurement as it applies in respect of the issue of a certificate of taxation, with the necessary modifications.

(7) Any party who is dissatisfied with any decision of the Taxing Master on the measurement of the bill as provided by paragraph (4) may apply to the Taxing Master to review his decision.

(8) Part VI of Order 62 of the Supreme Court Rules applies in respect of the review of such measurement as it applies in respect of the review of taxation, with the necessary modifications.

(9) Paragraphs (3) to (8) apply additionally (with any necessary modifications) to the measurement by the Taxing Master of the remuneration of a liquidator or accountant in winding-up proceedings commenced before the coming into operation of the Rules under the Companies (Winding-up) Rules (Northern Ireland) 1984 (1) and of the remuneration of an accountant in bankruptcy proceedings commenced before that date under the Bankruptcy Rules (Northern Ireland) 1983(2).

Procedure where taxation required

7.32.—(1) Before taxing the costs of any person employed in insolvency proceedings by a responsible insolvency practitioner, the Taxing Master shall require a certificate of employment, which shall be endorsed on the bill and signed by the responsible 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 responsible insolvency practitioner, deliver his bill of costs to the Taxing Master 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 responsible 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 a responsible insolvency practitioner in his personal capacity, that claim is also forfeited.

[E.R.7.35]

Petitions presented by insolvents

7.33.—(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 to be incurred in respect of the filing and prosecution of the petition; and the deposit shall be noted by the Taxing Master on the certificate of taxation.

(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.

[E.R.7.37]

Costs paid otherwise than out of the insolvent estate

7.34.  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 Master shall note on the certificate of taxation by whom, or the manner in which, the costs are to be paid.

[E.R.7.38]

Award of costs against official receiver or responsible insolvency practitioner

7.35.  Without prejudice to any provision of the Order or the Rules by virtue of which the official receiver is not in any event to be liable for costs, 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.

[E.R.7.39]

Applications for costs

7.36.—(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 responsible 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.

[E.R.7.40]

Costs and expenses of witnesses

7.37.—(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 Master may allow his expenses of travelling and subsistence.

[E.R.7.41]

CHAPTER 7 PERSONS INCAPABLE OF MANAGING THEIR AFFAIRS

Introductory

7.38.—(1) This Chapter applies 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 (Northern Ireland) Order 1986(3), or

(b) due to physical affliction or disability.

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

[E.R.7.43]

Appointment of another person to act

7.39.—(1) The court may appoint such person as it thinks fit to appear for, represent or act for the incapacitated person. [FORM 7.16]

(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.

[E.R.7.44]

Affidavit in support of application

7.40.—(1) Except where made by the official receiver, an application under Rule 7.39(3) shall, subject to paragraph (3), 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, the application shall, subject to paragraph (3), be supported by a report by the official receiver referring to a report from a registered medical practitioner as to the mental or physical condition of the incapacitated person.

(3) The affidavit of, or report by, a registered medical practitioner shall not be required where the incapacitated person is a patient within the meaning of the Mental Health (Northern Ireland) Order 1986.

[E.R.7.45]

Service of notices following appointment

7.41.  Any notice served on, or sent to, a person appointed under Rule 7.39 has the same effect as if it had been served on, or given to, the incapacitated person.

[E.R.7.46]

CHAPTER 8 APPEALS IN INSOLVENCY PROCEEDINGS

Appeals from Master

7.42.—(1) Without prejudice to the power of the Master to review an order made by him under Article 371, an order or decision of the Master in insolvency proceedings may be reviewed by an appeal to the Judge.

(2) Order 58, rule 1(2) to (4) of the Supreme Court Rules applies to such an appeal, with the substitution in paragraph (3) of the words “28 days” for the words “5 days” and the words “7 days” for the words “2 clear days”.

[E.R.7.47]

Appeals in bankruptcy

7.43.  In bankruptcy proceedings, an appeal lies at the instance of the Department 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.

[E.R.7.48]

Appeal against decision of Department or official receiver

7.44.  An appeal under the Order or the Rules against a decision of the Department or the official receiver shall be brought within 28 days of the notification of the decision.

[E.R.7.50]

CHAPTER 9 GENERAL

Principal court rules and practice to apply

7.45.  Except so far as inconsistent with the Rules, the Supreme Court Rules and the practice of the High Court apply to insolvency proceedings with any necessary modifications.

[E.R.7.51]

Right of audience

7.46.  Official receivers have right of audience in insolvency proceedings.

[E.R.7.52]

Right of attendance (company insolvency)

7.47.—(1) Subject to paragraphs (2) to (6), 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.

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

(6) 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.

(7) If two or more persons are appointed under paragraph (6) or represent the same interest, they must (if at all) instruct the same solicitor.

[E.R.7.53]

Responsible insolvency practitioner's solicitor

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

[E.R.7.54]

Drawing up and filing of orders

7.49.—(1) Subject to paragraph (2), every order of the court shall be drawn up, sealed and filed.

(2) The Judge may direct that specified categories of orders need not be drawn up unless the Judge or the Master making the order otherwise directs.

(3) Where no order is drawn up, a note or memorandum of the order, signed or initialled by the Judge or the Master making the order and filed, shall be sufficient evidence of the order having been made.

(4) Where an order has not been drawn up, a party to the proceedings in which the order is made may, and if he wishes to appeal against the order shall, within 7 days after the order is made, apply to the Master to have the order drawn up, and on such application the order shall be drawn up, sealed and filed.

Formal defects

7.50.  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.

[E.R.7.55]

Restriction on concurrent proceedings and remedies

7.51.  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.

[E.R.7.56]

Affidavits

7.52.—(1) Subject to paragraphs (2) to (5), 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.

(2) In applying Order 41 of the Supreme Court Rules (which relates to affidavits generally), there are to be disregarded provisions which are inconsistent with, or necessarily excluded by, paragraphs (3) to (5).

(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 Order 41, rule 8 of the Supreme Court Rules (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 or any officer of the court duly authorised in that behalf, may take affidavits and declarations.

[E.R.7.57]

Security in court

7.53.—(1) Subject to paragraph (3), where security has to be given to the court (otherwise than in relation to costs) it shall be given by bond.

(2) The bond shall be taken in a penal sum which, except with the consent of the opposite party, shall be not less than the sum for which security is to be given and probable costs.

(3) A person required to give security may, in lieu thereof, lodge in court a sum equal to the sum for which security is to be given and probable costs, together with a memorandum approved by the Master and signed by such person or his solicitor stating the conditions on which the money is deposited.

(4) Upon the lodgment the Master shall forthwith notify the persons for whose protection the security is given that the money has been lodged in court.

[E.R.7.58]

Discovery

7.54.—(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.

[E.R.7.60]

Office copies of documents

7.55.—(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 Master thinks appropriate, and shall bear the court's seal.

[E.R.7.61]

PART 8 PROXIES AND COMPANY REPRESENTATION

Definition of “proxy”

8.1.—(1) 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.[FORMS 8.1 to 8.5]

(2) Proxies are for use at creditors', company or contributories' meetings summoned or called under the Order 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 person given a proxy under paragraph (4) cannot decline to be the proxy-holder in relation to that proxy.

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

[E.R.8.1]

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.

[E.R.8.2]

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 or, 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 responsible insolvency practitioner's proxies as if he were himself proxy-holder.

(4) Where a proxy directs a proxy-holder to vote for or against a resolution for the nomination or appointment of a person as the responsible insolvency practitioner, the proxy-holder may, unless the proxy states otherwise, vote for or against (as he thinks fit) any resolution for the nomination or appointment of that person jointly with another or others.

(5) A proxy-holder may propose any resolution which, if proposed by another, would be a resolution in favour of which by virtue of the proxy he would be entitled to vote.

(6) Where a proxy gives specific directions as to voting, this does not, unless the proxy states otherwise, preclude the proxy-holder from voting at his discretion on resolutions put to the meeting which are not dealt with in the proxy.

[E.R.8.3]

Retention of proxies

8.4.—(1) Subject to paragraph (2), 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).

[E.R.8.4]

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 (including proofs) sent or given, in accordance with directions contained in any notice convening the meeting, to the chairman of that meeting or to any other person by a creditor, member or contributory for the purpose of that meeting.

[E.R.8.5]

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) Where a proxy-holder has signed the proxy as being authorised to do so by his principal and the proxy specifically directs him to vote in the way mentioned in paragraph (1), he shall nevertheless not vote in that way unless he produces to the chairman of the meeting written authorisation from his principal sufficient to show that the proxy-holder was entitled so to sign the proxy.

(3) This Rule applies also to any person acting as chairman of a meeting and using proxies in that capacity under Rule 8.3; and in its application to him, the proxy-holder is deemed an associate of his.

[E.R.8.6]

Company representation

8.7.—(1) Where a person is authorised under Article 383 of the Companies Order 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.

(3) Nothing in this Rule requires the authority of a person to sign a proxy on behalf of a principal which is a corporation to be in the form of a resolution of that corporation.

[E.R.8.7]

PART 9 EXAMINATION OF PERSONS CONCERNED IN COMPANY AND INDIVIDUAL INSOLVENCY

Preliminary

9.1.—(1) This Part relates to applications to the court for an order under—

(a) Article 200 (inquiry into company's dealings when it is, or is alleged to be, insolvent), or[FORM 9.1]

(b) Article 337 (inquiry in bankruptcy, with respect to the bankrupt's dealings).[FORM 9.1]

(2) The following definitions apply—

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

(b) “the applicable Article” is Article 200 or Article 337, according to whether the affairs of a company or those of a bankrupt or (where the application under Article 337 is made by virtue of Article 339) a debtor are in question;

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

[E.R.9.1]

Form and contents of application

9.2.—(1) The application shall 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 2 or more of those purposes.

(4) The application may be made ex parte.

[E.R.9.2]

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 Article.

(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.

[E.R.9.3]

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 Article 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 Article 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 Order or otherwise) be used as evidence against the respondent of any statement made by him in the course of his examination.

[E.R.9.4]

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 Article, 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 Article, 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 Article 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.

[E.R.9.5]

Costs of proceedings under Articles 200 and 337

9.6.—(1) Where the court has ordered an examination of any person under the applicable Article, 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) Article 201(1) or 338(1) (to deliver up property in his possession which belongs to the insolvent), or

(b) Article 201(2) or 338(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), 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.

[E.R.9.6]

PART 10 OFFICIAL RECEIVERS

Appointment of official receivers

10.1.  Judicial notice shall be taken of the appointment under Articles 355 to 357 of official receivers and deputy official receivers.

[E.R.10.1]

Persons entitled to act on official receiver's behalf

10.2.—(1) In the absence of the official receiver an officer authorised in writing for the purpose by the Department, 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 Article 113,200,263 or 337, 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 Master.

[E.R.10.2]

Application for directions

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

[E.R.10.3]

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.

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

(3) In this Rule, “expenses” includes damages.

[E.R.10.4]

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

Preliminary

11.01.—(1) This Part relates 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.

[E.R.11.1]

Notice of intended dividend

11.02.—(1) Before declaring a dividend, the responsible insolvency practitioner shall give notice of his intention to do so to all creditors whose addresses are known to him and who have not proved their debts.

(2) Before declaring a first dividend, the responsible insolvency practitioner shall, unless he has previously by public advertisement invited creditors to prove their debts, give notice of the intended dividend by public advertisement.

(3) Any notice under paragraph (1) and any notice of a first dividend under paragraph (2) 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.

(4) The responsible 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.

[E.R.11.2]

Final admission/rejection of proofs

11.03.—(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 responsible 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.

[E.R.11.3]

Postponement or cancellation of dividend

11.04.  If in the period of 4 months referred to in Rule 11.02(4)—

(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 responsible 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 responsible insolvency practitioner may postpone or cancel the dividend.

[E.R.11.4]

Decision to declare dividend

11.05.—(1) If the responsible insolvency practitioner has not, in the 4 month period referred to in Rule 11.02(4), 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.

(3) If the court gives leave under paragraph (2), the responsible insolvency practitioner shall make such provision in respect of the proof in question as the court directs.

[E.R.11.5]

Notice of declaration

11.06.—(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 responsible 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.

[E.R.11.6]

Notice of no, or no further, dividend

11.07.  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.

[E.R.11.7]

Proof altered after payment of dividend

11.08.—(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 overpaid by way of dividend.

[E.R.11.8]

Secured creditors

11.09.—(1) Paragraphs (2) and (3) apply 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 responsible 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 but he is not entitled to disturb any dividend declared (whether or not distributed) before the date of the revaluation.

[E.R.11.9]

Disqualification from dividend

11.10.  If a creditor contravenes any provision of the Order 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.

[E.R.11.10]

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 responsible 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.

[E.R.11.11]

Preferential creditors

11.12.—(1) Subject to paragraph (2), this Part applies 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 11.02, 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, and public advertisement of the intended dividend need only be given if the responsible insolvency practitioner thinks fit.

[E.R.11.12]

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 to paragraphs (2) and (3).

(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 a percentage calculated as follows—

where 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 Article 160(2) or (as the case may be) 300(4) until any creditor to whom paragraphs (1) and (2) apply has been paid the full amount of his debt.

[E.R.11.13]

PART 12 MISCELLANEOUS AND GENERAL

Power of Department to regulate certain matters

12.01.—(1) Pursuant to paragraph 27 of Schedule 5 to the Order, and paragraph 28 of Schedule 6 to the Order, the Department may, subject to the Order and the Rules, make regulations with respect to any matter provided for in the Rules as relates to deeds of arrangement, the Insolvency Account or the carrying out of the functions of a liquidator, provisional liquidator, administrator or administrative receiver of a company, an interim receiver appointed under Article 259, of the official receiver while acting as receiver or manager under Article 260 or of a trustee of a bankrupt's estate, including, without prejudice to the generality of the foregoing, provision with respect to the matters arising in companies winding up and individual bankruptcy set out in paragraph (2) and the matters arising in deeds of arrangement set out in paragraph (3).

(2) The matters arising in companies winding up and individual insolvency referred to in paragraph (1) are—

(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 commitee, 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 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.

(3) The matters arising in deeds of arrangement referred to in paragraph (1) are—

(a) the endorsement, execution and certification of the deed;

(b) the assent of creditors required by Article 215;

(c) the preparation and keeping of financial records by trustees and the production and inspection of such records by the Department;

(d) the statement to be sent to creditors pursuant to Article 222(1)(a);

(e) the dispensing by a majority of creditors with the giving of security by the trustee;

(f) the auditing of trustees' accounts.

(4) Any reference in paragraphs (1) and (2) to a trustee includes a reference to the official receiver when acting as receiver and manager under Article 260.

(5) 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; and

(d) contain such incidental, supplemental and transitional provisions as may appear to the Department necessary or expedient.

[E.R.12.1]

Costs

12.02.  All costs 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.

[E.R.12.2]

Provable debts

12.03.—(1) Subject to paragraphs (2) to (5), 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 Article 4 or 5 of the Criminal Justice (Confiscation) (Northern Ireland) Order 1990 (4).

(3) In paragraph (2), “fine”, “domestic proceedings” and “family proceedings” have the meanings given by Article 255(8).

(4) The following are not provable except at a time when all other claims of creditors in the insolvency proceedings (other than any of a kind mentioned in this paragraph) have been paid in full with interest under Article 160(2) or, as the case may be, Article 300(4)—

(a) in a winding up or a bankruptcy, any claim arising by virtue of—

(i) section 6(3)(a) of the Financial Services Act 1986 (5), not being a claim also arising by virtue of section 6(3)(b) of that Act, or

(ii) section 61(3)(a) of that Act, not being a claim also arising by virtue of section 61(3)(b) of that Act;

(b) in a winding up or a bankruptcy, any claim arising by virtue of section 49 of the Banking Act 1987 (6);

(c) in a winding up, any claim which by virtue of the Order or any other enactment is a claim the payment of which in a bankruptcy or a winding up is to be postponed.

(5) 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.

[E.R.12.3]

Notices

12.04.—(1) All notices required or authorised by or under the Order 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 responsible 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 responsible 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.

[E.R.12.4]

Quorum at meeting of creditors or contributories

12.05.—(1) Any meeting of creditors or contributories in insolvency proceedings is competent to act if a quorum is present.

(2) Subject to paragraph (3), a quorum is—

(a) in the case of a creditors' meeting, at least one creditor entitled to vote;

(b) in the case of a meeting of contributories, at least two contributories so entitled, or all the contributories, if their number does not exceed two.

(3) For the purposes of this Rule, the reference to the creditor or contributories necessary to constitute a quorum is to those persons present or represented by proxy by any person (including the chairman) and in the case of any proceedings under Parts II-VII of the Order includes persons duly represented under Article 383 of the Companies Order.

(4) Where at any meeting of creditors or contributories—

(a) the provisions of this Rule as to a quorum being present are satisfied by the attendance of—

(i) the chairman alone, or

(ii) one other person in addition to the chairman, and

(b) the chairman is aware, by virtue of proofs and proxies received or otherwise, that one or more additional persons would, if attending, be entitled to vote,

the meeting shall not commence until at least the expiry of 15 minutes after the time appointed for its commencement.

[E.R.12.4A]

Evidence of proceedings at meetings

12.06.—(1) A minute of proceedings at a meeting (held under the Order 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.

[E.R.12.5]

Documents issuing from Department

12.07.—(1) Any document purporting to be, or to contain, any order, directions or certificate issued by the Department 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 in shown.

(2) Without prejudice to the foregoing, a certificate by the Department 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 Order or the Rules,

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

[E.R.12.6]

Forms for use in insolvency proceedings

12.08.  The forms contained in Schedule 2 shall be used in, and in connection with, insolvency proceedings.

[E.R.12.7(1)]

Insolvency practitioner's security

12.09.—(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 II or VIII of the Order,

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.

[E.R.12.8]

Time

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

[E.R.12.9]

Service by post

12.11.—(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) A document to be served by post may be sent to the last known address of the person to be served.

(3) 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.

(4) 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.

(5) 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.

[E.R.12.10]

General provisions as to service

12.12.—(1) Subject to Rule 12.11 and paragraphs (2) and (3), Order 65 of the Supreme Court Rules 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.

[E.R.12.11]

Service outside the jurisdiction

12.13.—(1) Order 11 of the Supreme Court Rules, does not apply in insolvency proceedings.

(2) A bankruptcy petition may, with the leave of the court, be served outside Northern Ireland 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 Northern Ireland, 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.

[E.R.12.12]

Confidentiality of documents

12.14.—(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 responsible 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 responsible 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.

(4) Nothing in this Rule entitles the responsible insolvency practitioner to decline to allow the inspection of any proof or proxy.

[E.R.12.13]

Notices sent simultaneously to the same person

12.15.  Where under the Order 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.

[E.R.12.14]

Right to copy documents

12.16.  Where the Order or 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 116 of the Judicature (Northern Ireland) Act 1978(7), and

(b) otherwise, of the appropriate fee.

[E.R.12.15]

Charge for copy documents

12.17.  Where the responsible insolvency practitioner or the official receiver is requested by a creditor, member, contributory or member of a liquidation or creditors' committee to supply copies of any documents he is entitled to require the payment of the appropriate fee in respect of the supply of the documents.

[E.R.12.15A]

Non-receipt of notice of meeting

12.18.  Where in accordance with the Order 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.

[E.R.12.16]

Right to have list of creditors

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

(a) proceedings under Part III of the Order (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, subject to paragraph (3), to require the responsible insolvency practitioner to furnish him with a list of the insolvent's creditors and the amounts of their respective debts.

(3) Paragraph (2) 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.

(4) The responsible 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.

[E.R.12.17]

False claim of status as creditor, etc.

12.20.—(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.

[E.R.12.18]

The Gazette

12.21.—(1) A copy of the Gazette containing any notice required by the Order 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 Order 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.

[E.R.12.20]

Punishment of offences

12.22.—(1) Schedule 3 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) Article 374 (summary proceedings) has effect in relation to offences under the Rules as to offences under the Order.

[E.R.12.21]

(1)

S.R. 1984 No. 163

(2)

S.R. 1983 No. 310

(3)

S.I. 1986/595 (N.I. 4)

(4)

S. l. 1990/2588 (N.I. 17)

(5)

1986 c.60

(6)

1987 c.22

(7)

1978 c.23