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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Revenue And Customs v Direct Affinity Events Ltd & Ors [2019] EWHC 3063 (Ch) (10 December 2019) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2019/3063.html Cite as: [2019] EWHC 3063 (Ch) |
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BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
IN THE MATTERS OF
DIRECT AFFINITY EVENTS LIMITED
BRIAN MEE ASSOCIATES LIMITED
LESGO EXPRESS IMPORT AND EXPORT LIMITED
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
B e f o r e :
____________________
HM Revenue and Customs |
Petitioners |
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- and – |
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(1) Direct Affinity Events Limited (2) Brian Mee Associates Limited (3) Lesgo Express Import and Export Limited (4) The Official Receiver |
Respondents |
____________________
MS ISABEL PETRIE (instructed by the Government Legal Department) appeared on behalf of the Fourth Respondent
The First, Second and Third Respondents did not appear and were not represented
____________________
Crown Copyright ©
Deputy ICC Judge Frith:
The Facts
The 2016 Order
"414.— Fees orders (company insolvency proceedings).
(1) There shall be paid in respect of—
(a) proceedings under any of Parts I to VII of this Act, and(b) the performance by the official receiver or the Secretary of State of functions under those Parts,
such fees as the competent authority may with the sanction of the Treasury by order direct.
(2) That authority is—
(a) in relation to England and Wales, the Lord Chancellor, and(b) in relation to Scotland, the Secretary of State.
(3) The Treasury may by order direct by whom and in what manner the fees are to be collected and accounted for.
(4) The Lord Chancellor may, with the sanction of the Treasury, by order provide for sums to be deposited, by such persons, in such manner and in such circumstances as may be specified in the order, by way of security for fees payable by virtue of this section."
In regulation 2, certain definitions are provided. They include:
"deposit" means—
(a) on the making of a bankruptcy application, the sum of £550,
(b) on the presentation of a bankruptcy petition, the sum of £990,
(c) on the presentation of a winding up petition, other than a petition presented under section 124A(c) of the Act, the sum of £1,600,"
"chargeable receipts" means the sums which are paid into the Insolvency Services Account after deducting any amounts which are paid out to secured creditors or paid out in carrying on the business of the bankrupt or the company;"
"official receiver's administration fee" means the fee payable to the official receiver on the making of a bankruptcy or winding up order out of the chargeable receipts of the estate of the bankrupt or, as the case may be, the assets of the insolvent company for the performance of the official receiver's functions under the Act"
Regulation 3 is the operative provision introducing the fees listed in Schedule 1 which includes the OR's administration fee and the general fee that lie at the heart of this dispute.
Regulation 4 deals with the provisions relating to the deposit defined in regulation 2. They include:
"(2) On the presentation of a bankruptcy petition or a winding-up petition, the petitioner will pay a deposit to the court as security for the payment of the official receiver's administration fee.
(3) Where a deposit is paid to the court, the court will transmit the deposit paid to the official receiver attached to the court.
(4) The deposit will be used to discharge the official receiver's administration fee to the extent that the assets comprised in the estate of the bankrupt or, as the case may be, the assets of the company are insufficient to discharge the official receiver's administration fee.
(5) Where a bankruptcy order or a winding up order is made (including any case where a bankruptcy order or a winding up is subsequently annulled, rescinded or recalled), the deposit will be returned to the person who paid it save to the extent that the assets comprised in the estate of the bankrupt or, as the case may be, the assets of the company are insufficient to discharge the official receiver's administration fee.
(9) Where—
(a) a deposit was paid by the petitioner to the court, and
(b) the petition is withdrawn or dismissed by the court
that deposit, less an administration fee of £50, will be repaid to the petitioner."
Description of fee and circumstances in which it is charged Amount of fee or applicable % Winding up by the court other than a winding up on a petition presented under section 124A – official receiver's administration fee
On the making of a winding-up order, other than on a petition presented under section 124A, for the performance of the official receiver's duties as official receiver, including the duty to investigate and report on the affairs of bodies in
liquidation, the fee of—£5,000 Official receiver's general fee
On the making of a bankruptcy order or the making of a winding up order by the court for the costs not recovered out
of the official receiver's administration fee of administering—
(a) bankruptcy orders,
(b) winding up orders made by the court
the fee of—£6,000
The relevant authorities
The submissions
"[54] Finally, in considering the interaction between the powers to rescind and to annul a bankruptcy, it is also appropriate to understand why the difference might matter to the bankrupt. In essence, rescission terminates the bankruptcy whereas annulment treats the BO as having never been made."
"…a person who is affected by an order which can properly be described as a nullity is entitled ex debito justitiae to have it set aside… Apart from proper ex parte proceedings, the idea that an order can validly be made against a man who has no notification of any intention to apply for it has never been adopted in this country. It cannot be maintained that an order which has been made in those circumstances is to be treated as a mere irregularity and not something which is affected by a fundamental vice."
"Is the registrar under a duty to retain in his records a copy of the winding up order which the court has rescinded on the grounds that the company was never served and the entire proceedings were a mistake? In Craig v Kansen, Lord Greene MR described an order made in such circumstances as a nullity. As I said in Re Intermain Properties Ltd, the word "nullity" can be rather slippery and Lord Greene's reference to the order being "set aside" makes it difficult to know whether he regarded the order as incapable of having any legal consequences whatever. But I do not need to explore the meaning of nullity at this level of generality: the relevant question here is whether the order is a nullity for the purposes of sec. 130(1) of the Insolvency Act. In my judgment it is. The present question could not have arisen before the Insolvency Rules 1986 because the order could not have been rescinded after it had been drawn up and registered. But now it can be, I think that justice requires sec. 130(1) to be construed to give effect to the principle stated by Lord Greene."
- 0% on the first £2,500;
- 100% of the next £1,700;
- 75% of the next £1,500;
- 15% of the next £396,000; and
- 1% of the remainder subject to a maximum of £80,000.
Discussion
The expression "Chargeable Receipts" is also defined in regulation 2, as meaning:
"the sums which are paid into the Insolvency Services Account after deducting any amounts which are paid out to Secured Creditors or paid out in carrying on the business of the Bankrupt or the Company."
"On the making of a bankruptcy order or the making of a winding up order by the court for the costs not recovered out of the official receiver's administration fee of administering—
(a) bankruptcy orders,
(b) winding up orders made by the court"
"Where a bankruptcy order or a winding up order is made (including any case where a bankruptcy order or a winding up is subsequently annulled, rescinded or recalled) the deposit will be returned to the person who paid it save to the extent that the assets comprised in the estate of the bankrupt or, as the case may be, the assets of the company are insufficient to discharge the official receiver's administration fee." [my emphasis]
Conclusion