The Insolvency (2005 Order) (Transitional Provisions and Savings) Order (Northern Ireland) 2006

Explanatory Note

(This note is not part of the Order)

The Insolvency (2005 Order) (Commencement No. 1) Order (Northern Ireland) 2006 (S.R. 2006 No. 21(C. 1)) brings the Insolvency (Northern Ireland) Order 2005 (“the 2005 Order”) into operation on 27 March 2006. This Order makes transitional provisions and savings in connection with the coming into operation of the 2005 Order.

Article 2 of this Order contains transitional provisions in relation to cases where petitions for administration orders were presented prior to the commencement date. The old law will continue to apply to those cases. It also saves the operation of the old law for the purposes of giving effect to the Insolvent Partnerships Order (Northern Ireland) 1995, Regulation 5 of the Limited Liability Partnerships Regulations (Northern Ireland) 2004 and the Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) (Northern Ireland) Order 2005.

Article 3 contains transitional provisions in relation to the abolition of preferential status for Crown debts. Broadly speaking preferential status will continue to apply in those cases which started before the commencement date. The provisions of Article 3 (and Articles 4 and 5) apply in cases where the provisions of the Insolvency (Northern Ireland) Order 1989 (“the 1989 Order”) are applied to other situations, for example in relation to insolvent partnerships (see Article 1(3)).

Articles 4 and 5 make transitional provisions in relation to certain types of proceedings taken by liquidators and trustees in bankruptcy. Article 8 of the 2005 Order amends Schedule 2 to the 1989 Order so that proceedings under Articles 177, 178, 202, 203 or 367 can only be brought with sanction (usually from the creditors' committee). Similarly Article 19 of the 2005 Order amends Schedule 3 to the 1989 Order to provide that a trustee in bankruptcy can only bring proceedings under Articles 312, 313 or 367 with sanction (usually from the creditors' committee). Articles 4 and 5 provide that these amendments to the 1989 Order are not to affect any proceedings that are already on foot under the provisions of the 1989 Order mentioned above.

Article 6 provides that where the High Court is considering whether to make a bankruptcy restrictions order it cannot take into account any conduct of the bankrupt which occurred prior to the commencement date.

Article 7 contains transitional provisions in relation to existing bankruptcies in Northern Ireland where a certificate of summary administration was in force.