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The Insolvency Rules (Northern Ireland) 1991

Type Ni-Statutory-Rule

Publication 1991-08-05

State In force

Jurisdiction Northern Ireland

Department Government Printer for Northern Ireland

Source legislation.gov.uk

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(1) This Rule applies where application is made to the court for the removal of the liquidator, or for an order directing the liquidator to summon a creditors' meeting for the purpose of removing him.

(2) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(3) If the application is not dismissed under paragraph (2), the court shall fix a venue for it to be heard.

(4) The court may require the applicant to make a deposit or give security for the costs to be incurred by the liquidator on the application.

(5) The applicant shall, at least 14 days before the hearing date, send to the liquidator a notice stating the venue and accompanied by a copy of the application, and of any evidence which he intends to adduce in support of it.

(6) Subject to any contrary order of the court, the costs of the application are not payable out of the assets.

(7) Where the court removes the liquidator—

(a) it shall send 2 copies of the order of removal to him, one to be sent by him forthwith to the registrar, with notice of his ceasing to act;

(b) the order may include such provision as the court thinks fit with respect to matters arising in connection with the removal; and

Release of resigning or removed liquidator

4.128

(NO CVL APPLICATION)

(1) Where the liquidator's resignation is accepted by a meeting of creditors which has not resolved against his release, he has his release from when his resignation is effective under Rule 4.116.

(2) Where the liquidator is removed by a meeting of creditors which has not resolved against his release, that fact shall be stated in the certificate of removal.

(3) Where—

(a) the liquidator resigns, and the creditors' meeting called to receive his resignation has resolved against his release, or

(b) he is removed by a creditors' meeting which has so resolved, or is removed by the court,

he must apply to the Department for his release.

(4) When the Department gives the release, it shall so certify and send the certificate to the official receiver, to be filed in court.

(5) A copy of the certificate shall be sent by the Department to the former liquidator, whose release is effective from the date of the certificate.

Release of resigning or removed liquidator

4.129-CVL

(1) Where the liquidator's resignation is accepted by a meeting of creditors which has not resolved against his release, he has his release from when he gives notice of his resignation to the registrar.

(2) Where the liquidator is removed by a creditors' meeting which has not resolved against his release, that fact shall be stated in the certificate of removal.

(3) Where—

(a) the liquidator resigns, and the creditors' meeting called to receive his resignation has resolved against his release, or

(b) he is removed by a creditors' meeting which has so resolved, or is removed by the court,

he must apply to the Department for his release.

(4) When the Department gives the release, it shall so certify and send the certificate to the registrar.

(5) A copy of the certificate shall be sent by the Department to the former liquidator, whose release is effective from the date of the certificate.

Removal of liquidator by Department

4.130

(NO CVL APPLICATION)

(1) If the Department decides to remove the liquidator, it shall before doing so notify the liquidator and the official receiver of its decision and the grounds of it, and specify a period within which the liquidator may make representations against implementation of the decision.

(2) If the Department directs the removal of the liquidator, it shall forthwith—

(a) file notice of its decision in court, and

(b) send notice to the liquidator and the official receiver.

(3) If the liquidator is removed by direction of the Department—

(a) Rule 4.128 applies as regards the liquidator obtaining his release, as if he had been removed by the court, and

(b) the court may make any such order in his case as it would have power to make if he had been so removed.

SECTION C: RELEASE ON COMPLETION OF ADMINISTRATION

Release of official receiver

4.131

(NO CVL APPLICATION)

(1) The official receiver shall, before giving notice to the Department under Article 148(3) (that the winding up is for practical purposes complete), send out notice of his intention to do so to all creditors who have proved their debts.

(2) The notice shall in each case be accompanied by a summary of the official receiver's receipts and payments as liquidator.

(3) The Department, when it has determined the date from which the official receiver is to have his release, shall give notice to the court that it has done so. The notice shall be accompanied by the summary referred to in paragraph (2).

Final meeting

4.132

(NO CVL APPLICATION)

(1) Where the liquidator is other than the official receiver, he shall give at least 28 days' notice of the final meeting of creditors to be held under Article 124. The notice shall be sent to all creditors who have proved their debts; and the liquidator shall cause it to be gazetted at least one month before the meeting is to be held.

(2) The liquidator's report laid before the meeting under that Article shall contain an account of the liquidator's administration of the winding up, including—

(a) a summary of his receipts and payments, and

(b) a statement by him that he has reconciled his account with that which is held by the Department in respect of the winding up.

(3) At the final meeting, the creditors may question the liquidator with respect to any matter contained in his report, and may resolve against him having his release.

(4) The liquidator shall give notice to the court that the final meeting has been held; and the notice shall state whether or not the creditors have resolved against his release, and be accompanied by a copy of the report laid before the final meeting. A copy of the notice shall be sent by the liquidator to the official receiver.

(5) If there is no quorum present at the final meeting, the liquidator shall report to the court that a final meeting was summoned in accordance with the Rules, but there was no quorum present; and the final meeting is then deemed to have been held, and the creditors not to have resolved against the liquidator having his release.

(6) If the creditors at the final meeting have not so resolved, the liquidator is released when the notice under paragraph (4) is filed in court. If they have so resolved, the liquidator must obtain his release from the Department and Rule 4.128 applies accordingly.

Final meeting

4.133-CVL

(1) The liquidator shall give at least 28 days' notice of the final meeting of creditors to be held under Article 92. The notice shall be sent to all creditors who have proved their debts.

(2) At the final meeting, the creditors may question the liquidator with respect to any matter contained in the account required under the Article, and may resolve against the liquidator having his release.

(3) Where the creditors have so resolved, he must obtain his release from the Department; and Rule 4.129-CVL applies accordingly.

SECTION D: REMUNERATION

Fixing of remuneration

4.134

(1) The liquidator is entitled to receive remuneration for his services as such.

(2) The remuneration shall be fixed either—

(a) as a percentage of the value of the assets which are realised or distributed, or of the one value and the other in combination, or

(b) by reference to the time properly given by the responsible insolvency practitioner (as liquidator) and his staff in attending to matters arising in the winding up.

(3) Where the liquidator is other than the official receiver, it is for the liquidation committee (if there is one) to determine whether the remuneration is to be fixed under paragraph (2)(a) or (b) and, if under paragraph (2)(a), to determine any percentage to be applied as there mentioned.

(4) In arriving at that determination, the committee shall have regard to the following matters—

(a) the complexity (or otherwise) of the case,

(b) any respects in which, in connection with the winding up, there falls on the responsible insolvency practitioner (as liquidator) any responsibility of an exceptional kind or degree,

(c) the effectiveness with which the responsible insolvency practitioner appears to be carrying out, or to have carried out, his duties as liquidator, and

(d) the value and nature of the assets with which the liquidator has to deal.

(5) If there is no liquidation committee, or the committee does not make the requisite determination, the liquidator's remuneration may be fixed (in accordance with paragraph (2)) by a resolution of a meeting of creditors; and paragraph (4) applies to them as it does to the liquidation committee.

(6) If not fixed under paragraphs (2) to (5), the liquidator's remuneration shall be in accordance with the scale laid down for the official receiver by general regulations.

Other matters affecting remuneration

4.135

(1) Where the liquidator sells assets on behalf of a secured creditor, he is entitled to take for himself, out of the proceeds of sale, a sum by way of remuneration equivalent to that which is chargeable in corresponding circumstances by the official receiver under general regulations.

(2) Where there are joint liquidators, it is for them to agree between themselves as to how the remuneration payable should be apportioned. Any dispute arising between them may be referred—

(a) to the court, for settlement by order, or

(b) to the liquidation committee or a meeting of creditors, for settlement by resolution.

(3) If the liquidator is a solicitor and employs his own firm, or any partner in it, to act on behalf of the company, profit costs shall not be paid unless this is authorised by the liquidation committee, the creditors or the court.

Recourse of liquidator to meeting of creditors

4.136

If the liquidator's remuneration has been fixed by the liquidation committee, and he considers the rate or amount to be insufficient, he may request that it be increased by resolution of the creditors.

Recourse to the court

4.137

(1) If the liquidator considers that the remuneration fixed for him by the liquidation committee, or by resolution of the creditors, or as under Rule 4.134(6), is insufficient, he may apply to the court for an order increasing its amount or rate.

(2) The liquidator shall give at least 14 days' notice of his application to the members of the liquidation committee; and the committee may nominate one or more members to appear or be represented, and to be heard, on the application.

(3) If there is no liquidation committee, the liquidator's notice of his application shall be sent to such one or more of the company's creditors as the court may direct, which creditors may nominate one or more of their number to appear or be represented.

(4) The court may, if it appears to be a proper case, order the costs of the liquidator's application, including the costs of any member of the liquidation committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid out of the assets.

Creditors' claim that remuneration is excessive

4.138

(1) Any creditor of the company may, with the concurrence of at least 25 per cent. in value of the creditors (including himself), apply to the court for an order that the liquidator's remuneration be reduced, on the grounds that it is, in all the circumstances, excessive.

(2) The court may, if it thinks that no sufficient cause is shown for a reduction, dismiss the application; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(3) If the application is not dismissed under paragraph (2), the court shall fix a venue for it to be heard, and give notice to the applicant accordingly.

(4) The applicant shall, at least 14 days before the hearing date, send to the liquidator a notice stating the venue and accompanied by a copy of the application, and of any evidence which the applicant intends to adduce in support of it.

(5) If the court considers the application to be well-founded, it shall make an order fixing the remuneration at a reduced amount or rate.

(6) Unless the court orders otherwise, the costs of the application shall be paid by the applicant, and are not payable out of the assets.

SECTION E: SUPPLEMENTARY PROVISIONS

Liquidator deceased

4.139

(NO CVL APPLICATION)

(1) Subject to paragraph (2), where the liquidator (other than the official receiver) has died, it is the duty of his personal representatives to give notice of the fact to the official receiver, specifying the date of the death.

(2) Paragraph (1) does not apply if notice has been given under paragraphs (3), (4) or (5).

(3) If the deceased liquidator was a partner in a firm, notice may be given to the official receiver by a partner in the firm who is qualified to act as an insolvency practitioner, or is a member of any body recognised by the Department for the authorisation of insolvency practitioners.

(4) Notice of the death may be given by any person producing to the official receiver the relevant death certificate or a copy of it.

(5) The official receiver shall give notice to the court, for the purpose of fixing the date of the deceased liquidator's release, and to the registrar.

Liquidator deceased

4.140-CVL

(1) Subject to paragraph (2), where the liquidator has died, it is the duty of his personal representatives to give notice of the fact, and of the date of death, to the registrar and to the liquidation committee (if any) or a member of that committee.

(2) In the alternative, notice of the death may be given—

(a) if the deceased liquidator was a partner in a firm, by a partner qualified to act as an insolvency practitioner or who is a member of any body approved by the Department for the authorisation of insolvency practitioners, or

(b) by any person, if he delivers with the notice a copy of the relevant death certificate.

Loss of qualification as insolvency practitioner

4.141

(NO CVL APPLICATION)

(1) This Rule applies where the liquidator vacates office on ceasing to be qualified to act as an insolvency practitioner in relation to the company.

(2) He shall forthwith give notice of his doing so to the official receiver, who shall give notice to the Department and the registrar.

(3) The official receiver shall file in court a copy of his notice under paragraph (2).

(4) Rule 4.128 applies as regards the liquidator obtaining his release, as if he had been removed by the court.

Loss of qualification as insolvency practitioner

4.142-CVL

(1) This Rule applies where the liquidator vacates office on ceasing to be qualified to act as an insolvency practitioner in relation to the company.

(2) He shall forthwith give notice of his doing so to the registrar and the Department.

(3) Rule 4.129-CVL applies as regards the liquidator obtaining his release, as if he had been removed by the court.

Vacation of office on making of winding-up order

4.143-CVL

Where the liquidator vacates office in consequence of the court making a winding-up order against the company, Rule 4.129-CVL applies as regards his obtaining his release, as if he had been removed by the court.

Notice to official receiver of intention to vacate office

4.144

(NO CVL APPLICATION)

(1) Where the liquidator intends to vacate office, whether by resignation or otherwise, he shall give notice of his intention to the official receiver together with notice of any creditors' meeting to be held in respect of his vacation of office, including any meeting to receive his resignation.

(2) The notice to the official receiver must be given at least 21 days before any such creditors' meeting.

(3) Where there remains any property of the company which has not been realised, applied, distributed or otherwise fully dealt with in the winding up, the liquidator shall include in his notice to the official receiver details of the nature of that property, its value (or the fact that it has no value), its location, any action taken by the liquidator to deal with that property or any reason for his not dealing with it, and the current position in relation to it.

Liquidator's duties on vacating office

4.145

(1) Where the liquidator ceases to be in office as such, in consequence of removal, resignation or cesser of qualification as an insolvency practitioner, he is under obligation forthwith to deliver up to the person succeeding him as liquidator the assets (after deduction of any expenses properly incurred, and distributions made, by him) and further to deliver up to that person—

(a) the records of the liquidation, including correspondence, proofs and other related papers appertaining to the administration while it was within his responsibility, and

(b) the company's books, papers and other records.

(2) When the winding up is for practical purposes complete, the liquidator shall forthwith file in court all proofs remaining with him in the proceedings. (NO CVL APPLICATION)

(3) Where the liquidator vacates office under Article 146(7) (final meeting of creditors), he shall deliver up to the official receiver the company's books, papers and other records which have not already been disposed of in accordance with general regulations in the course of the liquidation. (NO CVL APPLICATION)

SECTION F: THE LIQUIDATOR IN A MEMBERS' VOLUNTARY WINDING UP

Appointment by the company

4.146

(1) This Rule applies where the liquidator is appointed by a meeting of the company.

(2) The chairman of the meeting shall certify the appointment, but not unless and until the person appointed has provided him with a written statement to the effect that he is an insolvency practitioner, duly qualified under the Order to be the liquidator, and that he consents so to act.

(3) The chairman shall send the certificate forthwith to the liquidator, who shall keep it as part of the records of the liquidation.

(4) Not later than 28 days from his appointment, the liquidator shall give notice of it to all creditors of the company of whom he is aware in that period.

Appointment by the court

4.147

(1) This Rule applies where the liquidator is appointed by the court under Article 94.

(2) The court's order shall not issue unless and until the person appointed has filed in court a statement to the effect that he is an insolvency practitioner, duly qualified under the Order to be the liquidator, and that he consents so to act.

(3) Thereafter, the court shall send a sealed copy of the order to the liquidator, whose appointment takes effect from the date of the order.

(4) Not later than 28 days from his appointment, the liquidator shall give notice of it to all creditors of the company of whom he is aware in that period.

Authentication of liquidator's appointment

4.148

A copy of the certificate of the liquidator's appointment or (as the case may be) a sealed copy of the court's order appointing him may in any proceedings be adduced as proof that the person appointed is duly authorised to exercise the powers and perform the duties of liquidator in the company's winding up.

Company meeting to receive liquidator's resignation

4.149

(1) Before resigning his office, the liquidator must call a meeting of the company for the purpose of receiving his resignation. The notice summoning the meeting shall indicate that this is the purpose, or one of the purposes, of it.

(2) The notice under paragraph (1) must be accompanied by an account of the liquidator's administration of the winding up, including a summary of his receipts and payments.

(3) Subject to paragraph (4), the liquidator may only proceed under this Rule on grounds of ill health or because—

(a) he intends ceasing to be in practice as an insolvency practitioner, or

(b) there is some conflict of interest or change of personal circumstances which precludes or makes impracticable the further discharge by him of the duties of liquidator.

(4) Where two or more persons are acting as liquidator jointly, any one of them may proceed under this Rule (without prejudice to the continuation in office of the other or others) on the ground that, in his opinion or that of the other or others, it is no longer expedient that there should continue to be the present number of joint liquidators.

(5) If there is no quorum present at the meeting summoned to receive the liquidator's resignation, the meeting is deemed to have been held.

(6) The notice of the liquidator's resignation required by Article 145(5) shall be given by him forthwith after the meeting.

(7) Where a new liquidator is appointed in place of one who has resigned, the former shall, in giving notice of his appointment, state that his predecessor has resigned.

Removal of liquidator by the court

4.150

(1) This Rule applies where application is made to the court for the removal of the liquidator, or for an order directing the liquidator to summon a company meeting for the purpose of removing him.

(2) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

(3) If the application is not dismissed under paragraph (2), the court shall fix a venue for it to be heard.

(4) The court may require the applicant to make a deposit or give security for the costs to be incurred by the liquidator on the application.

(5) The applicant shall, at least 14 days before the hearing date, send to the liquidator a notice stating the venue and accompanied by a copy of the application, and of any evidence which he intends to adduce in support of it.

(6) Subject to any contrary order of the court, the costs of the application are not payable out of the assets.

(7) Where the court removes the liquidator—

(a) it shall send 2 copies of the order of removal to him, one to be sent by him forthwith to the registrar, with notice of his ceasing to act;

(b) the order may include such provision as the court thinks fit with respect to matters arising in connection with the removal; and

Release of resigning or removed liquidator

4.151

(1) Where the liquidator resigns, he has his release from the date on which he gives notice of his resignation to the registrar.

(2) Where the liquidator is removed by a meeting of the company, he shall forthwith give notice to the registrar of his ceasing to act.

(3) Where the liquidator is removed by the court, he must apply to the Department for his release.

(4) When the Department gives the release, it shall so certify and send the certificate to the registrar.

(5) A copy of the certificate shall be sent by the Department to the former liquidator, whose release is effective from the date of the certificate.

Liquidator deceased

4.152

(1) Subject to paragraph (2), where the liquidator has died, it is the duty of his personal representatives to give notice of the fact, and of the date of death, to the company's directors, or any one of them, and to the registrar.

(2) In the alternative, notice of the death may be given—

(a) if the deceased liquidator was a partner in a firm, by a partner qualified to act as an insolvency practitioner or who is a member of any body approved by the Department for the authorisation of insolvency practitioners, or

(b) by any person, if he delivers with the notice a copy of the relevant death certificate.

Loss of qualification as insolvency practitioner

4.153

(1) This Rule applies where the liquidator vacates office on ceasing to be qualified as an insolvency practitioner in relation to the company.

(2) He shall forthwith give notice of his doing so to the registrar and the Department.

(3) Rule 4.151 applies as regards the liquidator obtaining his release, as if he had been removed by the court.

Vacation of office on making of winding-up order

4.154

Where the liquidator vacates office in consequence of the court making a winding-up order against the company, Rule 4.151 applies as regards his obtaining his release, as if he had been removed by the court.

Liquidator's duties on vacating office

4.155

Where the liquidator ceases to be in office as such, in consequence of removal, resignation or cesser of qualification as an insolvency practitioner, he is under obligation forthwith to deliver up to the person succeeding him as liquidator the assets (after deduction of any expenses properly incurred, and distributions made, by him) and further to deliver up to that person—

(a) the records of the liquidation, including correspondence, proofs and other related papers appertaining to the administration while it was within his responsibility, and

(b) the company's books, papers and other records.

Remuneration of liquidator in members' voluntary winding up

4.156

(1) The liquidator is entitled to receive remuneration for his services as such.

(2) The remuneration shall be fixed either—

(a) as a percentage of the value of the assets which are realised or distributed, or of the one value and the other in combination, or

(b) by reference to the time properly given by the responsible insolvency practitioner (as liquidator) and his staff in attending to matters arising in the winding up;

and the company in general meeting shall determine whether the remuneration is to be fixed under sub-paragraph (a) or (b) and, if under sub-paragraph (a), the percentage to be applied as there mentioned.

(3) In arriving at that determination the company in general meeting shall have regard to the matters set out in paragraph (4) of Rule 4.134.

(4) If not fixed under paragraphs (2) and (3), the liquidator's remuneration shall be in accordance with the scale laid down for the official receiver by general regulations.

(5) Rule 4.135 shall apply in relation to the remuneration of the liquidator in respect of the matters there mentioned and for this purpose references in that Rule to “the liquidation committee” and “a meeting of creditors” shall be read as references to the company in general meeting.

(6) If the liquidator considers that the remuneration fixed for him by the company in general meeting, or as under paragraph (4), is insufficient, he may apply to the court for an order increasing its amount or rate.

(7) The liquidator shall give at least 14 days' notice of an application under paragraph (6) to the company's contributories, or such one or more of them as the court may direct, and the contributories may nominate any one or more of their number to appear or be represented.

(8) The court may, if it appears to be a proper case, order the costs of the liquidator's application, including the costs of any contributory appearing or being represented on it, to be paid out of the assets.

SECTION G: RULES APPLYING IN EVERY WINDING UP, WHETHER VOLUNTARY OR BY THE COURT

Power of court to set aside certain transactions

4.157

(1) If in the administration of the estate the liquidator enters into any transaction with a person who is an associate of his, the court may, on the application of any person interested, set the transaction aside and order the liquidator to compensate the company for any loss suffered in consequence of it.

(2) This does not apply if either—

(a) the transaction was entered into with the prior consent of the court, or

(b) it is shown to the court's satisfaction that the transaction was for value, and that it was entered into by the liquidator without knowing, or having any reason to suppose, that the person concerned was an associate.

(3) Nothing in this Rule is to be taken as prejudicing the operation of any rule of law or equity with respect to a liquidator's dealings with trust property, or the fiduciary obligations of any person.

Rule against solicitation

4.158

(1) Where the court is satisfied that any improper solicitation has been used by or on behalf of the liquidator in obtaining proxies or procuring his appointment, it may order that no remuneration out of the assets be allowed to any person by whom, or on whose behalf, the solicitation was exercised.

(2) An order of the court under this Rule overrides any resolution of the liquidation committee or the creditors, or any other provision of the Rules relating to the liquidator's remuneration.

CHAPTER 12 — THE LIQUIDATION COMMITTEE

Preliminary

4.159

(NO CVL APPLICATION)

Membership of committee

4.160

(1) Subject to Rule 4.162, the liquidation committee shall consist as follows—

(a) in any case of at least three, and not more than five, creditors of the company, elected by the meeting of creditors held under Article 120, and

(b) also, in the case of a solvent winding up, where the contributories' meeting held under that Article so decides, of up to three contributories, elected by that meeting.

(NO CVL APPLICATION)

(2-CVL) The committee must have at least three members before it can be established.

(3) Any creditor of the company (other than one whose debt is fully secured) is eligible to be a member of the committee, so long as—

(a) he has lodged a proof of his debt, and

(b) his proof has neither been wholly disallowed for voting purposes, nor wholly rejected for purposes of distribution or dividend.

(4) No person can be a member as both a creditor and a contributory.

(5) A body corporate may be a member of the committee, but it cannot act as such otherwise than by a representative appointed under Rule 4.167.

(6) Members of the committee elected or appointed to represent the creditors are called “creditor members”; and those elected or appointed to represent the contributories are called “contributory members”.

(7) Where a representative of the Deposit Protection Board exercises the right (under section 58 of the Banking Act 1987[^f00013]) to be a member of the committee, he is to be regarded as an additional creditor member.

Formalities of establishment

4.161

(1) The liquidation committee does not come into being, and accordingly cannot act, until the liquidator has issued a certificate of its due constitution.

(2) If the chairman of the meeting which resolves to establish the committee is not the liquidator, he shall forthwith give notice of the resolution to the liquidator (or, as the case may be, the person appointed as liquidator by that same meeting), and inform him of the names and addresses of the persons elected to be members of the committee.

(3) No person may act as a member of the committee unless and until he has agreed to do so and, unless the relevant proxy or authorisation contains a statement to the contrary, such agreement may be given by his proxy-holder or representative under Article 383 of the Companies Order present at the meeting establishing the committee.

(4) The liquidator's certificate of the committee's due constitution shall not issue before the minimum number of persons (in accordance with Rule 4.160) who are to be members of the committee have agreed to act.

(5) As and when the others (if any) agree to act, the liquidator shall issue an amended certificate.

(6) The liquidator shall file the certificate, and any amended certificate, in court and shall send a copy to the registrar. (NO CVL APPLICATION)

(7-CVL) The certificate, and any amended certificate, shall be sent by the liquidator to the registrar.

(8) If after the first establishment of the committee there is any change in its membership, the liquidator shall report the change to the court and to the registrar. (NO CVL APPLICATION)

(9-CVL) If after the first establishment of the committee there is any change in its membership, the liquidator shall report the change to the registrar.

Committee established by contributories

4.162

(NO CVL APPLICATION)

(1) Paragraphs (2) to (4) apply where the creditors' meeting under Article 120 does not decide that a liquidation committee should be established, or decides that a committee should not be established.

(2) The meeting of contributories under that Article may appoint one of their number to make application to the court for an order to the liquidator that a further creditors' meeting be summoned for the purpose of establishing a liquidation committee; and—

(a) the court may, if it thinks that there are special circumstances to justify it, make that order, and

(b) the creditors' meeting summoned by the liquidator in compliance with the order is deemed to have been summoned under Article 120.

(3) If the creditors' meeting so summoned does not establish a liquidation committee, a meeting of contributories may do so.

(4) The committee shall then consist of at least three, and not more than five, contributories elected by that meeting; and Rule 4.161 applies, substituting for the reference in paragraph (4) of that Rule to Rule 4.160 a reference to this paragraph.

Obligations of liquidator to committee

4.163

(1) Subject to paragraphs (2) and (4), it is the duty of the liquidator to report to the members of the liquidation committee all such matters as appear to him to be, or as they have indicated to him as being, of concern to them with respect to the winding up.

(2) In the case of matters so indicated to him by the committee, the liquidator need not comply with any request for information where it appears to him that—

(a) the request is frivolous or unreasonable, or

(b) the cost of complying would be excessive, having regard to the relative importance of the information, or

(3) Where the committee has come into being more than 28 days after the appointment of the liquidator, he shall report to them, in summary form, what actions he has taken since his appointment, and shall answer all such questions as they may put to him regarding his conduct of the winding up hitherto.

(4) A person who becomes a member of the committee at any time after its first establishment is not entitled to require a report to him by the liquidator, otherwise than in summary form, of any matters previously arising.

(5) Nothing in this Rule disentitles the committee, or any member of it, from having access to the liquidator's records of the liquidation, or from seeking an explanation of any matter within the committee's responsibility.

Meetings of the committee

4.164

(1) Subject to paragraph (2), meetings of the liquidation committee shall be held when and where determined by the liquidator.

(2) The liquidator shall call a first meeting of the committee to take place within 3 months of his appointment or of the committee's establishment (whichever is the later); and thereafter he shall call a meeting—

(a) if so requested by a creditor member of the committee or his representative (the meeting then to be held within 21 days of the request being received by the liquidator), and

(b) for a specified date, if the committee has previously resolved that a meeting be held on that date.

(3) The liquidator shall give 7 days' written notice of the venue of a meeting to every member of the committee (or his representative, if designated for that purpose), unless in any case the requirement of the notice has been waived by or on behalf of any member.

(4) For the purpose of paragraph (3), waiver may be signified either at or before the meeting.

The chairman at meetings

4.165

(1) The chairman at any meeting of the liquidation committee shall be the liquidator, or a person nominated by him to act.

(2) A person so nominated must be either—

(a) one who is qualified to act as an insolvency practitioner in relation to the company, or

(b) an employee of the liquidator or his firm who is experienced in insolvency matters.

Quorum

4.166

(1) A meeting of the committee is duly constituted if due notice of it has been given to all the members, and at least two creditor members are present or represented. (NO CVL APPLICATION)

(2-CVL) A meeting of the committee is duly constituted if due notice of it has been given to all the members, and at least two members are present or represented.

Committee-members' representatives

4.167

(1) A member of the liquidation committee may, in relation to the business of the committee, be represented by another person duly authorised by him for that purpose.

(2) A person acting as a committee-member's representative must hold a letter of authority entitling him so to act (either generally or specially) and signed by or on behalf of the committee-member, and for this purpose any proxy or any authorisation under Article 383 of the Companies Order in relation to any meeting of creditors (or, as the case may be, members or contributories) of the company shall, unless it contains a statement to the contrary, be treated as such a letter of authority to act generally signed by or on behalf of the committee-member.

(3) The chairman at any meeting of the committee may call on a person claiming to act as a committee-member's representative to produce his letter of authority, and may exclude him if it appears that his authority is deficient.

(4) No member may be represented by a body corporate, or by a person who is an undischarged bankrupt or is subject to a composition or arrangement with his creditors.

(5) No person shall—

(a) on the same committee, act at one and the same time as representative of more than one committee-member, or

(b) act both as a member of the committee and as representative of another member.

(6) Where a member's representative signs any document on the member's behalf, the fact that he so signs must be stated below his signature.

Resignation

4.168

A member of the liquidation committee may resign by notice in writing delivered to the liquidator.

Termination of membership

4.169

(1) A person's membership of the liquidation committee is automatically terminated if—

(a) he becomes bankrupt or compounds or arranges with his creditors, or

(b) at 3 consecutive meetings of the committee he is neither present nor represented (unless at the third of those meetings it is resolved that this Rule is not to apply in this case).

(2) However, if the cause of termination is the member's bankruptcy, his trustee in bankruptcy replaces him as a member of the committee.

(3) The membership of a creditor member is also automatically terminated if he ceases to be, or is found never to have been, a creditor.

Removal

4.170

(1) A creditor member of the committee may be removed by resolution at a meeting of creditors; and a contributory member may be removed by a resolution of a meeting of contributories.

(2) In either case, 14 days' notice must be given of the intention to move the resolution.

Vacancy (creditor members)

4.171

(1) Paragraphs (2) to (5) apply if there is a vacancy among the creditor members of the committee.

(2) The vacancy need not be filled if the liquidator and a majority of the remaining creditor members so agree and if the total number of members does not fall below the minimum required by Rule 4.160.

(3) The liquidator may appoint any creditor (being qualified under the Rules to be a member of the committee) to fill the vacancy, if a majority of the other creditor members agree to the appointment, and the creditor concerned consents to act.

(4) Alternatively, a meeting of creditors may resolve that a creditor be appointed (with his consent) to fill the vacancy. In this case, at least 14 days' notice must have been given of the resolution to make such an appointment (whether or not of a person named in the notice).

(5) Where the vacancy is filled by an appointment made by a creditors' meeting at which the liquidator is not present, the chairman of the meeting shall report to the liquidator the appointment which has been made.

Vacancy (contributory members)

4.172

(1) Paragraphs (2) to (6) apply if there is a vacancy among the contributory members of the committee.

(2) The vacancy need not be filled if the liquidator and a majority of the remaining contributory members so agree and if, in the case of a committee of contributory members only, the total number of members does not fall below the minimum required by Rule 4.162(4) or, as the case may be, 4.179(5).

(3) The liquidator may appoint any contributory member (being qualified under the Rules to be a member of the committee) to fill the vacancy, if a majority of the other contributory members agree to the appointment, and the contributory concerned consents to act.

(4) Alternatively, a meeting of contributories may resolve that a contributory be appointed (with his consent) to fill the vacancy. In this case, at least 14 days' notice must have been given of the resolution to make such an appointment (whether or not of a person named in the notice).

(5-CVL) Where the contributories make an appointment under paragraph (4), the creditor members of the committee may, if they think fit, resolve that the person appointed ought not to be a member of the committee; and—

(a) that person is not then, unless the court otherwise directs, qualified to act as a member of the committee, and

(b) on any application to the court for a direction under this paragraph the court may, if it thinks fit, appoint another person (being a contributory) to fill the vacancy on the committee.

(6) Where the vacancy is filled by an appointment made by a contributories' meeting at which the liquidator is not present, the chairman of the meeting shall report to the liquidator the appointment which has been made.

Voting rights and resolutions

4.173

(NO CVL APPLICATION)

(1) At any meeting of the committee, each member of it (whether present himself, or by his representative) has one vote; and a resolution is passed when a majority of the creditor members present or represented have voted in favour of it.

(2) Subject to paragraph (3), the votes of contributory members do not count towards the number required for passing a resolution, but the way in which they vote on any resolution shall be recorded.

(3) Paragraph (2) does not apply where, by virtue of Rule 4.162 or 4.179, the only members of the committee are contributories. In that case the committee is to be treated for voting purposes as if all its members were creditors.

(4) Every resolution passed shall be recorded in writing, either separately or as part of the minutes of the meeting. The record shall be signed by the chairman and kept with the records of the liquidation.

Voting rights and resolutions

4.174-CVL

(1) At any meeting of the committee, each member of it (whether present himself, or by his representative) has one vote; and a resolution is passed when a majority of the members present or represented have voted in favour of it.

(2) Every resolution passed shall be recorded in writing, either separately or as part of the minutes of the meeting. The record shall be signed by the chairman and kept with the records of the liquidation.

Resolutions by post

4.175

(1) In accordance with this Rule, the liquidator may seek to obtain the agreement of members of the liquidation committee to a resolution by sending to every member (or his representative designated for the purpose) a copy of the proposed resolution.

(2) Where the liquidator makes use of the procedure allowed by this Rule, he shall send out to members of the committee or their representatives (as the case may be) a copy of any proposed resolution on which a decision is sought, which shall be set out in such a way that agreement with or dissent from each separate resolution may be indicated by the recipient on the copy so sent.

(3) Any creditor member of the committee may, within 7 business days from the date of the liquidator sending out a resolution, require him to summon a meeting of the committee to consider the matters raised by the resolution. (NO CVL APPLICATION)

(4-CVL) Any member of the committee may, within 7 business days from the date of the liquidator sending out a resolution, require him to summon a meeting of the committee to consider the matters raised by the resolution.

(5) In the absence of such a request, the resolution is deemed to have been passed by the committee if and when the liquidator is notified in writing by a majority of the creditor members that they concur with it. (NO CVL APPLICATION)

(6-CVL) In the absence of such a request, the resolution is deemed to have been passed by the committee if and when the liquidator is notified in writing by a majority of the members that they concur with it.

(7) A copy of every resolution passed under this Rule, and a note that the committee's concurrence was obtained, shall be kept with the records of the liquidation.

Liquidator's reports

4.176

(1) The liquidator shall, as and when directed by the liquidation committee (but not more often than once in any period of 2 months), send a written report to every member of the committee setting out the position generally as regards the progress of the winding up and matters arising in connection with it, to which he (the liquidator) considers the committee's attention should be drawn.

(2) In the absence of such directions by the committee, the liquidator shall send such a report not less often than once in every period of 6 months.

(3) The obligations of the liquidator under this Rule are without prejudice to those imposed by Rule 4.163.

Expenses of members, etc.

4.177

The liquidator shall defray out of the assets, in the prescribed order of priority, any reasonable travelling expenses directly incurred by members of the liquidation committee or their representatives in respect of their attendance at the committee's meetings, or otherwise on the committee's business.

Dealings by committee-members and others

4.178

(1) This Rule applies to—

(a) any member of the liquidation committee,

(b) any committee-member's representative,

(c) any person who is an associate, or who has been an associate at any time in the last 12 months, of a member of the committee or of a committee-member's representative, and

(d) any person who has been a member of the committee or a committee-member's representative at any time in the last 12 months or who is, or has been at any time in the last 12 months, an associate of such a person.

(2) Subject to paragraph (3), a person to whom this Rule applies shall not enter into any transaction whereby he—

(a) receives out of the company's assets any payment for services given or goods supplied in connection with the administration, or

(b) obtains any profit from the administration, or

(3) Such a transaction may be entered into by a person to whom this Rule applies—

(a) with the prior leave of the court, or

(b) if he does so as a matter of urgency, or by way of performance of a contract in force before the date on which the company went into liquidation, and obtains the court's leave for the transaction, having applied for it without undue delay, or

(c) with the prior sanction of the liquidation committee, where it is satisfied (after full disclosure of the circumstances) that the person will be giving full value in the transaction.

(4) Where in the committee a resolution is proposed that sanction be accorded for a transaction to be entered into which, without that sanction or the leave of the court, would be in contravention of this Rule, no member of the committee, and no representative of a member, shall vote if he is to participate directly or indirectly in the transaction.

(5) The court may, on the application of any person interested—

(a) set aside a transaction on the ground that it has been entered into in contravention of this Rule, and

(b) make with respect to it such other order as it thinks fit, including (subject to paragraph (6)) an order requiring a person to whom this Rule applies to account for any profit obtained from the transaction and compensate the estate for any resultant loss.

(6) In the case of a person to whom this Rule applies as an associate of a member of the committee or of a committee-member's representative, the court shall not make any order under paragraph (5), if satisfied that he entered into the relevant transaction without having any reason to suppose that in doing so he would contravene this Rule.

(7) The costs of an application to the court for leave under this Rule are not payable out of the assets, unless the court so orders.

Composition of committee when creditors paid in full

4.179

(1) This Rule applies if the liquidator issues a certificate that the creditors have been paid in full, with interest in accordance with Article 160.

(2) The liquidator shall forthwith file the certificate in court and send a copy to the registrar. (NO CVL APPLICATION)

(3-CVL) The liquidator shall forthwith send a copy of the certificate to the registrar.

(4) The creditor members of the liquidation committee cease to be members of the committee.

(5) The committee continues in being unless and until abolished by decision of a meeting of contributories, and (subject to paragraph (6)) so long as it consists of at least three contributory members.

(6) The committee does not cease to exist on account of the number of contributory members falling below three, unless and until 28 days have elapsed since the issue of the liquidator's certificate under paragraph (1).

(7) At any time when the committee consists of less than three contributory members, it is suspended and cannot act.

(8) Contributories may be co-opted by the liquidator, or appointed by a contributories' meeting, to be members of the committee; but the maximum number of members is five.

(9) Rules 4.159 to 4.178 continue to apply to the liquidation committee (with any necessary modifications) as if all the members of the committee were creditor members.

Committee's functions vested in Department

4.180

(NO CVL APPLICATION)

(1) At any time when the functions of the liquidation committee are vested in the Department under Article 120(4) or (5), requirements of the Order or the Rules about notices to be given, or reports to be made, to the committee by the liquidator do not apply, otherwise than as enabling the committee to require a report as to any matter.

(2) Where the committee's functions are so vested under Article 120(5), they may be exercised by the official receiver.

Formal defects

4.181

The acts of the liquidation committee established for any winding up are valid notwithstanding any defect in the appointment, election or qualifications of any member of the committee or any committee-member's representative or in the formalities of its establishment.

CHAPTER 13 — THE LIQUIDATION COMMITTEE WHERE WINDING UP FOLLOWS IMMEDIATELY ON ADMINISTRATION

Preliminary

4.182

(1) This Chapter applies where—

(a) the winding-up order has been made immediately upon the discharge of an administration order under Part III of the Order, and

(b) the court makes an order under Article 119(1) appointing as liquidator the person who was previously the administrator.

(2) In this Chapter, “insolvent winding up”, “solvent winding up”, “creditor member” and “contributory member” mean the same as in Chapter 12.

Continuation of creditors' committee

4.183

(1) If under Article 38 a creditors' committee has been established for the purposes of the administration, then (subject to paragraph (2) and Rules 4.184 to 4.187) that committee continues in being as the liquidation committee for the purposes of the winding up, and—

(a) it is deemed to be a committee established as such under Article 120, and

(b) no action shall be taken under paragraphs (1) to (3) of that Article to establish any other.

(2) This Rule does not apply if, at the time when the court's order under Article 119(1) is made, the committee under Article 38 consists of less than three members; and a creditor who was, immediately before that date, a member of it, ceases to be a member on the making of the order if his debt is fully secured.

Membership of committee

4.184

(1) Subject to paragraph (2), the liquidation committee shall consist of at least three, and not more than five, creditors of the company, elected by the creditors' meeting held under Article 38 or (in order to make up numbers or fill vacancies) by a creditors' meeting summoned by the liquidator after the company goes into liquidation.

(2) In the case of a solvent winding up, the liquidator shall, on not less than 21 days' notice, summon a meeting of contributories, in order to elect (if it so wishes) contributory members of the liquidation committee, up to three in number.

Liquidator's certificate

4.185

(1) The liquidator shall issue a certificate of the liquidation committee's continuance, specifying the persons who are, or are to be, members of it.

(2) It shall be stated in the certificate whether or not the liquidator has summoned a meeting of contributories under Rule 4.184(2), and whether (if so) the meeting has elected contributories to be members of the committee.

(3) Pending the issue of the liquidator's certificate, the committee is suspended and cannot act.

(4) No person may act, or continue to act, as a member of the committee unless and until he has agreed to do so; and the liquidator's certificate shall not issue until at least the minimum number of persons required under Rule 4.184 to form a committee have signified their agreement.

(5) As and when the others signify their agreement, the liquidator shall issue an amended certificate.

(6) The liquidator's certificate (or, as the case may be, the amended certificate) shall be filed by him in court.

(7) If subsequently there is any change in the committee's membership, the liquidator shall report the change to the court.

Obligations of liquidator to committee

4.186

(1) As soon as may be after the issue of the liquidator's certificate under Rule 4.185, the liquidator shall report to the liquidation committee what actions he has taken since the date on which the company went into liquidation.

(2) A person who becomes a member of the committee after that date is not entitled to require a report to him by the liquidator, otherwise than in a summary form, of any matters previously arising.

(3) Nothing in this Rule disentitles the committee, or any member of it, from having access to the records of the liquidation (whether relating to the period when he was administrator, or to any subsequent period), or from seeking an explanation of any matter within the committee's responsibility.

Application of Chapter 12

4.187

Except as provided in this Chapter, Rules 4.163 to 4.181 apply to the liquidation committee following the issue of the liquidator's certificate under Rule 4.185, as if it had been established under Article 120.

CHAPTER 14 — COLLECTION AND DISTRIBUTION OF COMPANY'S ASSETS BY LIQUIDATOR

General duties of liquidator

4.188

(NO CVL APPLICATION)

(1) The duties imposed on the court by the Order with regard to the collection of the company's assets and their application in discharge of its liabilities are discharged by the liquidator as an officer of the court subject to its control.

(2) In the discharge of his duties the liquidator, for the purposes of acquiring and retaining possession of the company's property, has the same powers as a receiver appointed by the court, and the court may on his application enforce such acquisition or retention accordingly.

Manner of distributing assets

4.189

(1) Whenever the liquidator has sufficient funds in hand for the purpose he shall, subject to the retention of such sums as may be necessary for the expenses of the winding up, declare and distribute dividends among the creditors in respect of the debts which they have respectively proved.

(2) The liquidator shall give notice of his intention to declare and distribute a dividend.

(3) Where the liquidator has declared a dividend, he shall give notice of it to the creditors, stating how the dividend is proposed to be distributed. The notice shall contain such particulars with respect to the company, and to its assets and affairs, as will enable the creditors to comprehend the calculation of the amount of the dividend and the manner of its distribution.

Debts of insolvent company to rank equally

4.190

(NO CVL APPLICATION)

(1) Debts other than preferential debts rank equally between themselves in the winding up and, after the preferential debts, shall be paid in full unless the assets are insufficient for meeting them, in which case they abate in equal proportions between themselves.

(2) Paragraph (1) applies whether or not the company is unable to pay its debts.

Supplementary provisions as to dividend

4.191

(1) In the calculation and distribution of a dividend the liquidator shall make provision—

(a) for any debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs,

(b) for any debts which are the subject of claims which have not yet been determined, and

(2) A creditor who has not proved his debt before the declaration of any dividend is not entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but—

(a) when he has proved that debt 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, and

(b) any dividend or dividends payable under sub-paragraph (a) shall be paid before that money is applied to the payment of any such further dividend.

(3) No action lies against the liquidator for a dividend; but if he refuses to pay a dividend the court may, if it thinks fit, order him to pay it and also to pay, out of his own money—

(a) interest on the dividend, at the rate applicable to a money judgment of the High Court, from the time when it was withheld, and

(b) the costs of the proceedings in which the order to pay is made.

Distribution in members' voluntary winding up

4.192

(NO CVL APPLICATION)

(1) In a members' voluntary winding up the liquidator may give notice in such newspaper as he considers most appropriate for the purpose of drawing the matter to the attention of the company's creditors that he intends to make a distribution to creditors.

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

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

(4) A creditor who has not proved his debt before the last date for proving or after that date increases the claim in his proof is not entitled to disturb, by reason that he has not participated in it, either at all or, as the case may be, to the extent that his increased claim would allow, that distribution or any other distribution made before his debt was proved or his claim increased; but when he has proved his debt or, as the case may be, increased his claim, he is entitled to be paid, out of any money for the time being available for the payment of any further distribution, any distribution or distributions which he has failed to receive.

(5) Where the distribution proposed to be made is to be the only or the final distribution in that winding up, the liquidator may, subject to paragraph (6), make that distribution without regard to the claim of any person in respect of a debt not already proved.

(6) Where the distribution proposed to be made is one specified in paragraph (5), the notice given under paragraph (1) shall state the effect of paragraph (5).

Division of unsold assets

4.193

Without prejudice to provisions of the Order about disclaimer, the liquidator may, with the permission of the liquidation committee, divide in its existing form amongst the company's creditors, according to its estimated value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.

General powers of liquidator

4.194

(1) Any permission given by the liquidation committee or the court under Article 142(1)(a), or under the Rules, shall not be a general permission but shall relate to a particular proposed exercise of the liquidator's power in question; and a person dealing with the liquidator in good faith and for value is not concerned to enquire whether any such permission has been given.

(2) Where the liquidator has done anything without that permission, the court or the liquidation committee may, for the purpose of enabling him to meet his expenses out of the assets, ratify what he has done; but neither shall do so unless it is satisfied that the liquidator has acted in a case of urgency and has sought ratification without undue delay.

Enforced delivery up of company's property

4.195

(NO CVL APPLICATION)

(1) The powers conferred on the court by Article 198 (enforced delivery of company property) are exercisable by the liquidator or, where a provisional liquidator has been appointed, by him.

(2) Any person on whom a requirement under Article 198(2) is imposed by the liquidator or provisional liquidator shall, without avoidable delay, comply with it.

Final distribution

4.196

(1) When the liquidator has realised all the company's assets or so much of them as can, in his opinion, be realised without needlessly protracting the liquidation, he shall give notice, under Part 11, either—

(a) of his intention to declare a final dividend, or

(b) that no dividend, or further dividend, will be declared.

(2) The notice shall contain all such particulars as are required by Part 11 and shall require claims against the assets to be established by a date specified in the notice.

(3) After that date, the liquidator shall—

(a) defray any outstanding expenses of the winding up out of the assets, and

(b) if he intends to declare a final dividend, declare and distribute that dividend without regard to the claim of any person in respect of a debt not already proved.

(4) The court may, on the application of any person, postpone the date specified in the notice.

CHAPTER 15 — DISCLAIMER

Liquidator's notice of disclaimer

4.197

(1) Where the liquidator disclaims property under Article 152, the notice of disclaimer shall contain such particulars of the property disclaimed as enable it to be easily identified.

(2) The notice shall be signed by the liquidator and filed in court, with a copy. The court shall secure that both the notice and the copy are sealed and endorsed with the date of filing.

(3) The copy notice, so sealed and endorsed, shall be returned by the court to the liquidator as follows—

(a) if the notice has been delivered at the office of the court by the liquidator in person, it shall be handed to him,

(b) if it has been delivered by some person acting on the liquidator's behalf, it shall be handed to that person, for immediate transmission to the liquidator, and

(4) The court shall cause to be endorsed on the original notice, or otherwise recorded on the file, the manner in which the copy notice was returned to the liquidator.

(5) For the purposes of Article 152, the date of the prescribed notice is that which is endorsed on it, and on the copy, in accordance with this Rule.

Communication of disclaimer to persons interested

4.198

(1) Within 7 days after the day on which the copy of the notice of disclaimer is returned to him under Rule 4.197, the liquidator shall send or give copies of the notice (showing the date endorsed as required by that Rule) to the persons mentioned in paragraphs (2) to (6).

(2) Where the property disclaimed is of a leasehold nature, he shall send or give a copy to every person who (to his knowledge) claims under the company as underlessee or mortgagee.

(3) He shall in any case send or give a copy of the notice to every person who (to his knowledge)—

(a) claims an interest in the disclaimed property, or

(b) is under any liability in respect of the property, not being a liability discharged by the disclaimer.

(4) If the disclaimer is of an unprofitable contract, he shall send or give copies of the notice to all such persons as, to his knowledge, are parties to the contract or have interests under it.

(5) Subject to paragraph (6), if subsequently it comes to the liquidator's knowledge, in the case of any person, that he has such an interest in the disclaimed property as would have entitled him to receive a copy of the notice of disclaimer in pursuance of paragraphs (2) to (4), the liquidator shall then forthwith send or give to that person a copy of the notice.

(6) Paragraph (5) does not apply if—

(a) the liquidator is satisfied that the person has already been made aware of the disclaimer and its date, or

(b) the court, on the liquidator's application, orders that compliance is not required in that particular case.

Additional notices

4.199

The liquidator disclaiming property may, without prejudice to his obligations under Articles 152 to 154 and Rules 4.197 and 4.198, at any time give notice of the disclaimer to any persons who in his opinion ought, in the public interest or otherwise, to be informed of it.

Duty to keep court informed

4.200

The liquidator shall notify the court from time to time as to the persons to whom he has sent or given copies of the notice of disclaimer under Rules 4.198 and 4.199, giving their names and addresses, and the nature of their respective interests.

Application by interested party under Article 152(4)

4.201

Where, in the case of any property, application is made to the liquidator by an interested party under Article 152(4) (request for decision whether the property is to be disclaimed or not), the application—

(a) shall be delivered to the liquidator personally or by registered post, and

(b) shall be made in the form known as “notice to elect”, or a substantially similar form.

Interest in property to be declared on request

4.202

(1) If, in the case of property which the liquidator has the right to disclaim, it appears to him that there is some person who claims, or may claim, to have an interest in the property, he may give notice to that person calling on him to declare within 14 days whether he claims any such interest and, if so, the nature and extent of it.

(2) Failing compliance with the notice, the liquidator is entitled to assume that the person concerned has no such interest in the property as will prevent or impede its disclaimer.

Disclaimer presumed valid and effective

4.203

Any disclaimer of property by the liquidator is presumed valid and effective, unless it is proved that he has been in breach of his duty with respect to the giving of notice of disclaimer, or otherwise under Articles 152 to 154, or under this Chapter.

Application for exercise of court's powers under Article 155

4.204

(1) This Rule applies with respect to an application by any person under Article 155 for an order of the court to vest or deliver disclaimed property.

(2) The application must be made within 3 months of the applicant becoming aware of the disclaimer, or of his receiving a copy of the liquidator's notice of disclaimer sent under Rule 4.198, whichever is the earlier.

(3) The applicant shall with his application file in court an affidavit—

(a) stating whether he applies under sub-paragraph (a) of Article 155(1) (claim of interest in the property) or under sub-paragraph (b) (liability not discharged);

(b) specifying the date on which he received a copy of the liquidator's notice of disclaimer, or otherwise became aware of the disclaimer; and

(4) The court shall fix a venue for the hearing of the application; and the applicant shall, not later than 7 days before the date fixed, give to the liquidator notice of the venue, accompanied by copies of the application and the affidavit under paragraph (3).

(5) On the hearing of the application, the court may give directions as to other persons (if any) who should be sent or given notice of the application and the grounds on which it is made.

(6) Sealed copies of any order made on the application shall be sent by the court to the applicant and the liquidator.

(7) Subject to paragraph (8), in a case where the property disclaimed is of a leasehold nature, and Article 153 applies to suspend the effect of the disclaimer, there shall be included in the court's order a direction giving effect to the disclaimer.

(8) Paragraph (7) does not apply if, at the time when the order is issued, other applications under Article 155 are pending in respect of the same property.

CHAPTER 16 — SETTLEMENT OF LIST OF CONTRIBUTORIES

Preliminary

4.205

The duties of the court with regard to the settling of the list of contributories are, by virtue of the Rules, delegated to the liquidator.

Duty of liquidator to settle list

4.206

(1) Subject to paragraph (2), the liquidator shall, as soon as may be after his appointment, exercise the court's power to settle a list of the company's contributories for the purposes of Article 126 and, with the court's approval, rectify the register of members.

(2) The liquidator's duties under this Rule are performed by him as an officer of the court subject to the court's control.

Form of list

4.207

(1) The list shall identify—

(a) the several classes of the company's shares (if more than one), and

(b) the several classes of contributories, distinguishing between those who are contributories in their own right and those who are so as representatives of, or liable for the debts of, others.

(2) In the case of each contributory there shall in the list be stated—

(a) his address,

(b) the number and class of shares, or the extent of any other interest to be attributed to him, and

(c) if the shares are not fully paid up, the amounts which have been called up and paid in respect of them (and the equivalent, if any, where his interest is other than shares).

Procedure for settling list

4.208

(1) Having settled the list, the liquidator shall forthwith give notice, to every person included in the list, that he has done so.

(2) The notice given to each person shall state—

(a) in what character, and for what number of shares or what interest, he is included in the list,

(b) what amounts have been called up and paid up in respect of the shares or interest, and

(c) that in relation to any shares or interest not fully paid up, his inclusion in the list may result in the unpaid capital being called.

(3) The notice shall inform any person to whom it is given that, if he objects to any entry in, or omission from, the list, he should so inform the liquidator in writing within 21 days from the date of the notice.

(4) On receipt of any such objection, the liquidator shall within 14 days give notice to the objector either—

(a) that he has amended the list (specifying the amendment), or

(b) that he considers the objection to be not well-founded and declines to amend the list.

(5) The notice under paragraph 4(a) or (b) shall inform the objector of the effect of Rule 4.209.

Application to court for variation of the list

4.209

(1) If a person objects to any entry in, or exclusion from, the list of contributories as settled by the liquidator and, notwithstanding notice by the liquidator declining to amend the list, maintains his objection, he may apply to the court for an order removing the entry to which he objects or (as the case may be) otherwise amending the list.

(2) The application must be made within 21 days of the service on the applicant of the liquidator's notice under Rule 4.208(4).

Variation of, or addition to, the list

4.210

The liquidator may from time to time vary or add to the list of contributories as previously settled by him, but subject in all respects to Rules 4.205 to 4.209.

Costs not to fall on official receiver

4.211

The official receiver is not personally liable for any costs incurred by a person in respect of an application to set aside or vary his act or decision in settling the list of contributories, or varying or adding to the list; and the liquidator (if other than the official receiver) is not so liable unless the court makes an order to that effect.

CHAPTER 17 — CALLS

Calls by liquidator

4.212

Subject to Rule 4.213, the powers conferred by the Order with respect to the making of calls on contributories are exercisable by the liquidator as an officer of the court subject to the court's control.

Control by liquidation committee

4.213

(1) Where the liquidator proposes to make a call, and there is a liquidation committee, he may summon a meeting of the committee for the purpose of obtaining its sanction.

(2) At least 7 days' notice of the meeting shall be given by the liquidator to each member of the committee.

(3) The notice shall contain a statement of the proposed amount of the call, and the purpose for which it is intended to be made.

Application to court for leave to make a call

4.214

(1) For the purpose of obtaining the leave of the court for the making of a call on any contributories of the company, the liquidator shall apply ex parte, supporting his application by affidavit.

(2) There shall in the application be stated the amount of the proposed call, and the contributories on whom it is to be made.

(3) The court may direct that notice of the order be given to the contributories concerned, or to other contributories, or may direct that the notice be publicly advertised.

Making and enforcement of the call

4.215

(1) Notice of the call shall be given to each of the contributories concerned, and shall specify—

(a) the amount or balance due from him in respect of it, and

(b) whether the call is made with the sanction of the court or the liquidation committee.

(2) Payment of the amount due from any contributory may be enforced by order of the court.

CHAPTER 18 — SPECIAL MANAGER

Appointment and remuneration

4.216

(1) An application made by the liquidator under Article 151 for the appointment of a person to be special manager shall be supported by a report setting out the reasons for the application.

(2) The report under paragraph (1) shall include the applicant's estimate of the value of the assets in respect of which the special manager is to be appointed.

(3) This Chapter applies also with respect to an application by the provisional liquidator, where one has been appointed, and references to the liquidator are to be read accordingly as including the provisional liquidator. (NO CVL APPLICATION)

(4) The court's order appointing the special manager shall specify the duration of his appointment, which may be for a period of time, or until the occurrence of a specified event. Alternatively, the order may specify that the duration of the appointment is to be subject to a further order of the court.

(5) The appointment of a special manager may be renewed by order of the court.

(6) The special manager's remuneration shall be fixed from time to time by the court.

(7) The acts of the special manager are valid notwithstanding any defect in his appointment or qualifications.

Security

4.217

(1) The appointment of the special manager does not take effect until the person appointed has given (or, being allowed by the court to do so, undertaken to give) security to the person who applies for him to be appointed.

(2) It is not necessary that security shall be given for each separate company liquidation; but it may be given either specially for a particular liquidation, or generally for any liquidation in relation to which the special manager may be employed as such.

(3) The amount of the security shall be not less than the value of the assets in respect of which he is appointed, as estimated by the applicant in his report under Rule 4.216.

(4) When the special manager has given security to the person applying for his appointment, that person shall file in court a certificate as to the adequacy of the security.

(5) The cost of providing the security shall be paid in the first instance by the special manager; but—

(a) where a winding-up order is not made, he is entitled to be reimbursed out of the property of the company, and the court may make an order on the company accordingly, and

(b) where a winding-up order is made, he is entitled to be reimbursed out of the assets in the prescribed order of priority.

(NO CVL APPLICATION)

(6-CVL) The cost of providing the security shall be paid in the first instance by the special manager; but he is entitled to be reimbursed out of the assets, in the prescribed order of priority.

Failure to give or keep up security

4.218

(1) If the special manager fails to give the required security within the time stated for that purpose by the order appointing him, or any extension of that time that may be allowed, the liquidator shall report the failure to the court, which may thereupon discharge the order appointing the special manager.

(2) If the special manager fails to keep up his security, the liquidator shall report his failure to the court, which may thereupon remove the special manager, and make such order as it thinks fit as to costs.

(3) If an order is made under this Rule removing the special manager, or discharging the order appointing him, the court shall give directions as to whether any, and if so what, steps should be taken for the appointment of another special manager in his place.

Accounting

4.219

(1) The special manager shall produce accounts, containing details of his receipts and payments, for the approval of the liquidator.

(2) The accounts shall be in respect of 3-month periods for the duration of the special manager's appointment (or for a lesser period, if his appointment terminates less than 3 months from its date, or from the date to which the last accounts were made up).

(3) When the accounts have been approved, the special manager's receipts and payments shall be added to those of the liquidator.

Termination of appointment

4.220

(1) The special manager's appointment terminates if the winding-up petition is dismissed or if, a provisional liquidator having been appointed, the latter is discharged without a winding-up order having been made. (NO CVL APPLICATION)

(2) If the liquidator is of opinion that the employment of the special manager is no longer necessary or profitable for the company, he shall apply to the court for directions, and the court may order the special manager's appointment to be terminated.

(3) The liquidator shall make the same application if a resolution of the creditors is passed, requesting that the appointment be terminated.

CHAPTER 19 — PUBLIC EXAMINATION OF COMPANY OFFICERS AND OTHERS

Order for public examination

4.221

(1) If the official receiver applies to the court under Article 113 for the public examination of any person, a copy of the court's order shall, forthwith after its making, be served on that person.

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