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The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021

Type Statutory-Instrument

Publication 2021-10-21

Last updated 2022-08-10

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(1) If a secured creditor realises their security, the creditor may prove for the balance of their debt, after deducting the amount realised.

(2) If a secured creditor voluntarily surrenders their security for the general benefit of creditors, they may prove for their whole debt, as if it were unsecured.

Discounts

131

All trade and other discounts, except any discount for immediate, early or cash settlement, which would have been available to the institution but for it going into special administration, must in every case be deducted from the claim.

Mutual credit and set-off

132

(1) This rule applies where the administrator has, under rule 142, given notice of a proposal to make a distribution.

(2) In this rule, “mutual dealings” means mutual credits, mutual debts or other mutual dealings between the institution and a creditor of the institution proving or claiming to prove for a debt in the special administration, but does not include any of the following—

(a) any debt arising out of an obligation incurred after the institution entered special administration,

(b) any debt arising out of an obligation incurred at a time when the creditor had notice that an application for a special administration order was pending, or

(c) any debt which has been acquired by a creditor by assignment or otherwise, pursuant to an agreement between the creditor and any other party where that agreement was entered into—

(i) after the institution entered special administration, or

(ii) at a time when the creditor had notice that an application for a special administration order was pending.

(3) An account must be taken as at the date of the notice referred to in paragraph (1) of what is due from each party to the other in respect of the mutual dealings and the sums due from one party must be set off against the sums due from the other.

(4) A sum must be regarded as being due to or from the institution for the purposes of paragraph (3) whether—

(a) it is payable at present or in the future,

(b) the obligation by virtue of which it is payable is certain or contingent, or

(5) Rule 128 shall apply for the purposes of this rule to any obligation to or from the institution which, by reason of its being subject to any contingency or for any other reason, does not bear a certain value.

(6) Rules 133 to 135 shall apply for the purposes of this rule in relation to any sums due to the institution which—

(a) are payable in a currency other than sterling,

(b) are of a periodical nature, or

(7) Rule 153 shall apply for the purposes of this rule to any sum due to or from the institution which is payable in the future.

(8) Only the balance (if any) of the account owed to the creditor is provable in the special administration. Alternatively the balance (if any) owed to the institution must be paid to the administrator as part of the assets except where all or part of the balance results from a contingent or prospective debt owed by the creditor and in such a case the balance (or that part of it which results from the contingent or prospective debt) must be paid if and when that debt becomes due and payable.

(9) In this rule, “obligation” means an obligation however arising, whether by virtue of an agreement, rule of law or otherwise.

Debt in a foreign currency

133

(1) A proof for a debt incurred or payable in a foreign currency must state the amount of the debt in that currency.

(2) The administrator must convert all such debts into sterling at a single rate for each currency determined by the administrator by reference to the exchange rates prevailing on the date the institution entered special administration.

(3) On the next occasion when the administrator communicates with the creditors the administrator must advise them of any rate so determined.

(4) A creditor who considers that the rate determined by the administrator is unreasonable may apply to the court.

(5) If on hearing the application the court finds that the rate is unreasonable it may itself determine the rate.

Payments of a periodical nature

134

(1) In the case of rent and other payments of a periodical nature, the creditor may prove for any amounts due and unpaid up to the date when the institution entered special administration.

(2) Where at that date any payment was accruing due, the creditor may prove for so much as would have fallen due at that date, if accruing from day to day.

Interest

135

(1) In this rule, “the relevant date” means the date on which the institution entered special administration.

(2) Where a debt proved in the special administration bears interest, that interest is provable as part of the debt except in so far as it is payable in respect of any period after the relevant date.

(3) In the following circumstances the creditor’s claim may include interest on the debt for periods before the relevant date, although not previously reserved or agreed.

(4) If the debt is due by virtue of a written instrument and payable at a certain time, interest may be claimed for the period from that time to the relevant date.

(5) If the debt is due otherwise, interest may only be claimed if, before the relevant date, a demand for payment of the debt was made in writing by or on behalf of the creditor, and notice given that interest would be payable from the date of the demand to the date of payment.

(6) Interest under paragraph (5) may only be claimed for the period from the date of the demand to the relevant date and for all the purposes of the Regulations and these Rules must be chargeable at a rate not exceeding that mentioned in paragraph (7).

(7) The rate of interest to be claimed under paragraphs (4) and (5) is the rate specified in section 17 of the Judgments Act 1838 on the relevant date.

(8) Any surplus remaining after payment of the debts proved must, before being applied for any purpose, be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the relevant date.

(9) All interest payable under paragraph (8) ranks equally whether or not the debts on which it is payable rank equally.

(10) The rate of interest payable under paragraph (8) is whichever is the greater of the rate specified under paragraph (7) and the rate applicable to the debt apart from the special administration.

Debt payable at a future time

136

Subject to rule 153, a creditor may prove for a debt of which payment was not yet due on the date when the institution entered special administration.

Value of security

137

(1) Subject to paragraph (2), a secured creditor may, with the agreement of the administrator or the permission of the court, at any time alter the value which that creditor has, in their proof of debt, put upon their security.

(2) A secured creditor may re-value their security only with the permission of the court if that secured creditor—

(a) being the applicant for a special administration order, has in the application put a value on their security, or

(b) has voted in respect of the unsecured balance of their debt.

Surrender for non-disclosure

138

(1) If a secured creditor omits to disclose their security in their proof of debt, the creditor must surrender their security for the general benefit of creditors, unless the court, on application by that creditor, relieves them from the effect of this rule on the ground that the omission was inadvertent or the result of honest mistake.

(2) If the court grants that relief, it may require or allow the creditor’s proof of debt to be amended, on such terms as it thinks just.

Redemption by administrator

139

(1) The administrator may at any time give notice to a creditor whose debt is secured that it is proposed, at the expiration of twenty-eight days from the date of the notice, to redeem the security at the value put upon it in the creditor’s proof.

(2) The creditor then has twenty-one days (or such longer period as the administrator may allow) in which, if the creditor so wishes, to exercise their right to revalue their security (with the permission of the court, where rule 137 applies). If the creditor re-values their security, the administrator may only redeem at the new value.

(3) If the administrator redeems the security, the cost of transferring it is payable out of the assets of the institution.

(4) A secured creditor may at any time, by a notice in writing, call on the administrator to elect whether the administrator will or will not exercise their power to redeem the security at the value then placed on it, and the administrator then has three months in which to exercise the power or determine not to exercise it.

Test of security’s value

140

(1) Subject to paragraphs (2) and (3), the administrator may require any property comprised in the security to be offered for sale, if dissatisfied with the value which a secured creditor puts on their security (whether in their proof or by way of re-valuation under rule 137).

(2) The terms of sale must be such as may be agreed, or as the court may direct, and if the sale is by auction, the administrator on behalf of the institution, and the creditor on their own behalf, may appear and bid.

(3) This rule does not apply if the security has been revalued and the revaluation has been approved by the court.

Realisation of security by creditor

141

If a creditor who has valued their security subsequently realises it (whether or not at the instance of the administrator)—

(a) the net amount realised must be substituted for the value previously put by the creditor on the security, and

(b) that amount must be treated in all respects as an amended valuation made by the creditor.

Notice of proposed distribution

142

(1) Where an administrator is proposing to make a distribution to creditors, the administrator must give notice of that fact.

(2) The notice in paragraph (1) must—

(a) state whether the distribution is to preferential creditors or to preferential creditors and unsecured creditors, and

(b) where the administrator proposes to make a distribution to unsecured creditors, state the value of the prescribed part, except where the court has made an order under section 176A(5) of the IA 1986.

(3) The notice in paragraph (1) must be given to—

(a) all creditors whose addresses are known to the administrator, and

(b) the FCA.

(4) Subject to paragraph (5)(b), before declaring a dividend the administrator must by notice invite the creditors to prove their debts. Such notice—

(a) must be gazetted, and

(b) may be advertised in such other manner as the administrator thinks fit.

(5) A notice under paragraph (1) must, in addition to the standard contents—

(a) state that it is the intention of the administrator to make a distribution to creditors within the period of two months from the last date for proving,

(b) specify whether the proposed dividend is interim or final, and

(i) is the same date for all creditors, and

(ii) is not less than twenty-one days from that of the notice.

(6) Where a dividend is to be declared for preferential creditors—

(a) the notice under paragraph (1) need only to be given to those creditors in whose case the administrator has reason to believe that their debts are preferential, and

(b) the notice under paragraph (3) need only be given if the administrator thinks fit.

Admission or rejection of proofs

143

(1) Unless the administrator has already dealt with them, within fourteen days of the last date for proving, the administrator must—

(a) admit or reject (in whole or in part) proofs that have been submitted, or

(b) make such provision in respect of them as the administrator thinks fit.

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

(3) In the declaration of a dividend no payment must be made more than once by virtue of the same debt.

Postponement or cancellation of dividend

144

(1) The administrator may postpone or cancel the dividend if in the period of two months referred to in rule 142(5)—

(a) the administrator has rejected a proof in whole or in part and application is made to the court for that decision to be reversed or varied, or

(b) an application is made to the court for the administrator’s decision on a proof to be reversed or varied, or for a proof to be excluded, or for a reduction of the amount claimed.

(2) Where in that same period the administrator considers that, due to the nature of the business of the institution, there is significant complexity in admitting or rejecting proofs of claims submitted, or that the quantum of claims may be affected by any shortfall claims, the administrator may postpone the dividend.

Declaration of a dividend

145

(1) Where rule 144(2) does not apply and subject to paragraph (2), within the two month period referred to in rule 142(5)(a) the administrator must proceed to declare the dividend to one or more classes of creditor who have been given notice under that rule.

(2) Except with the permission of the court, the administrator must not declare a dividend so long as there is pending any application to the court to reverse or vary the administrator’s decision on a proof, or to exclude a proof or to reduce the amount claimed.

(3) If the court gives permission under paragraph (2), the administrator must make such provision in respect of the proof in question as the court directs.

Notice of declaration of a dividend

146

(1) Where the administrator declares a dividend, the administrator must give notice of such declaration to—

(a) all creditors who have proved their debts, and

(b) the FCA.

(2) A notice under paragraph (1) must include the following particulars—

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

(b) payments made by the administrator when acting as such,

(c) where the administrator proposed to make a distribution to unsecured creditors, the value of the prescribed part, except where the court has made an order under section 176A(5) of the IA 1986,

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

(e) the total amount of dividend and the rate of dividend, and

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

147

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

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

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

Notice of no dividend or no further dividend

148

(1) If the administrator gives notice to creditors that no dividend (or as the case may be, no further dividend) can be declared, the notice must 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 paying the expenses of the special administration.

(2) The notice to creditors in paragraph (1) must also be given to the FCA.

Proof altered after payment of dividend

149

(1) If after payment of dividend the amount claimed by a creditor in their proof is increased, the creditor is not entitled to disturb the distribution of the dividend, but 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 that creditor has failed to receive.

(2) Any dividend or dividends payable under paragraph (1) must 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 excluded, or the amount is reduced, the creditor is liable to repay to the administrator any amount overpaid by way of dividend.

Secured creditors

150

(1) This rule applies where a creditor re-values their security at a time when a dividend has been declared.

(2) If the revaluation results in a reduction of the creditor’s unsecured claim ranking for dividend, the creditor must, as soon as is reasonably practicable, repay to the administrator, for the credit of the special administration, any amount received by the creditor as dividend in excess of that to which that creditor would be entitled having regard to the revaluation of the security.

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

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

Disqualification from dividend

151

(1) If a creditor contravenes any provision of the Regulations or these Rules relating to the valuation of securities, the court may, on the application of the administrator, order that the creditor be wholly or partly disqualified from participation in any dividend.

(2) Notice of an application under paragraph (1) must be given by the administrator to the FCA and the FCA has the right to appear and be heard at the hearing of the application.

Assignment of right to dividend

152

(1) If a person who is entitled to a dividend gives notice to the administrator that they wish the dividend to be paid to another person, or that they have assigned that entitlement to another person, the administrator shall pay the dividend to that other person accordingly.

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

Debt payable at a future time

153

(1) Subject to paragraph (2), where a creditor has proved for a debt of which payment is not due at the date of the declaration of dividend, that creditor is entitled to dividend equally with other creditors.

(2) For the purpose of dividend (and no other purpose) the amount of the creditor’s admitted proof (or, if a distribution has previously been made to that creditor, the amount remaining outstanding in respect of their admitted proof) must be reduced by applying the following formula—

$$x 1.05 n$ where— “X” is the value of the admitted proof, and “n” is the period beginning with the relevant date and ending with the date on which the payment of the creditor’s debt would otherwise be due expressed in years and months in a decimalised form.$

(3) In paragraph (2) “relevant date” means the date that the institution entered special administration.

PART 8 — The Administrator

CHAPTER 1 — Powers of the administrator

General powers

154

(1) Any permission given by the creditors’ committee (or if there is no such committee, a meeting of the institution’s creditors and customers or the court under these Rules), must not be a general permission but must relate to a particular proposed exercise of one or more of the administrator’s powers in Schedule 1 to the IA 1986.

(2) A person dealing with the administrator in good faith and for value is not concerned to enquire whether any such permission has been given.

(3) Where the administrator has done anything without that permission, the court or the creditors’ committee may, for the purpose of enabling the administrator to meet the administrator’s expenses, ratify what the administrator has done, but neither shall do so unless it is satisfied that the administrator has acted in a case of urgency and has sought ratification without undue delay.

Powers of disclaimer

155

(1) Where the administrator disclaims property under section 178 of the IA 1986[^f00016], the notice of disclaimer must contain such particulars of the property disclaimed as enable it to be easily identified.

(2) The notice of disclaimer must be authenticated and dated by the administrator.

(3) As soon as is reasonably practicable after authenticating the notice of disclaimer, the administrator must—

(a) send a copy of the notice to the registrar of companies, and

(b) in any case where the disclaimer is of registered land as defined in section 132(1) of the Land Registration Act 2002[^f00017], send a copy of the notice to the Chief Land Registrar.

(4) For the purposes of section 178 of the IA 1986, the date of the prescribed notice is that on which the administrator authenticated it.

Communication of disclaimer to persons interested

156

(1) Within seven business days after the date of the notice of disclaimer, the administrator must send or give copies of the notice to every person who, to the administrator’s knowledge—

(a) claims under the institution as underlessee or mortgagee, where the property disclaimed is of a leasehold nature,

(b) claims an interest in the disclaimed property,

(d) who is party to the contract or has an interest under it where the disclaimer is of an unprofitable contract.

(2) If subsequently it comes to the administrator’s knowledge, in the case of any person ‘P’, that P has such an interest in the disclaimed property as would have entitled P to receive a copy of the notice of disclaimer under paragraph (1), the administrator must then, as soon as is reasonably practicable, send or give to P a copy of the notice.

(3) Compliance with paragraph (2) is not required if—

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

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

Additional notices

157

(1) The administrator disclaiming property may at any time send or give copies of the notice of the disclaimer to any persons who in the administrator’s opinion ought, in the public interest or otherwise, to be informed of the disclaimer.

(2) Paragraph (1) is without prejudice to the administrator’s obligations under sections 178, 179 and 180 of the IA 1986[^f00018] and rules 155 and 156.

Records

158

The administrator must include in the administrator’s records of the special administration a record of—

(a) the persons to whom that administrator has sent or given copies of the notice of disclaimer under rules 156 and 157, showing their names and addresses, and the nature of their respective interests,

(b) the dates on which the copies of the notice of disclaimer were sent or given to those persons,

(c) the date on which, as required by rule 155, a copy of the notice of disclaimer was sent to the registrar of companies, and

(d) (where applicable) the date on which, as required by rule 155, a copy of the notice was sent to the Chief Land Registrar.

Application by interested party

159

(1) The following applies where, in the case of any property, application is made to the administrator by an interested party under section 178(5) of the IA 1986.

(2) The application must be delivered to the administrator—

(a) personally,

(b) by electronic means in accordance with Part 12, or

(c) by any other means of delivery which enables proof of receipt of the application by the administrator to be provided, if requested.

Interest in property to be declared on request

160

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

(2) If P fails to comply with the notice, the administrator is entitled to assume that P has no such interest in the property as will prevent or impede its disclaimer.

Disclaimer presumed valid and effective

161

Any disclaimer of property by the administrator is presumed valid and effective, unless it is proved that the administrator has been in breach of their duty with respect to the giving of notice of disclaimer, or otherwise, under sections 178 to 180 of the IA 1986 or under this Chapter of these Rules.

Application for the exercise of court’s powers under section 181

162

(1) This rule applies with respect to an application by any person under section 181 of the IA 1986 for an order of the court to vest or deliver disclaimed property.

(2) The application must be made within three months of the applicant becoming aware of the disclaimer, or of the applicant receiving a copy of the administrator’s notice of disclaimer sent under rule 156, whichever is the earlier.

(3) The applicant must with the application file a witness statement—

(a) stating whether the application is made under—

(i) paragraph (a) of section 181(2), or

(ii) paragraph (b) of section 181(2),

(b) specifying the date on which the applicant received a copy of the administrator’s notice of disclaimer, or otherwise became aware of the disclaimer, and

(c) specifying the grounds of the application and the order which the applicant desires the court to make under section 181.

(4) The court must fix a venue for the hearing of the application, and the applicant must, not later than five business days before the date fixed, give to the administrator notice of the venue, accompanied by copies of the application and the witness statement required by 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 must be sent by the court to the applicant and the administrator.

(7) In a case where the property disclaimed is of a leasehold nature, and section 179 of the IA 1986 applies to suspend the effect of the disclaimer, there must 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 section 181 are pending in respect of the same property.

CHAPTER 2 — Fixing of remuneration

Fixing of remuneration

163

(1) The administrator is entitled to receive remuneration—

(a) to be paid out of the estate of the institution for services given—

(i) in respect of the pursuit of Objectives 2 and 3, and

(ii) as a consequence of a failure by the institution to safeguard relevant funds, and

(b) to be paid out of relevant funds for services given in respect of the pursuit of Objective 1.

(2) The basis of remuneration in both cases in paragraph (1) must be fixed—

(a) as a percentage of the value of the property with which the administrator has to deal,

(b) by reference to the time properly given by the insolvency practitioner (as administrator) and their staff in attending to matters arising in the special administration, or

(3) The basis of remuneration may be fixed as any one or more of the bases set out in paragraph (2), and different bases may be fixed in respect of different things done by the administrator.

(4) Where the basis of remuneration is fixed as set out in paragraph (2)(a), different percentages may be fixed in respect of different things done by the administrator.

(5) It is for the creditors’ committee (if there is one) to determine for each case—

(a) which of the bases set out in paragraph (2) are to be fixed and (where appropriate) in what combination under paragraph (3), and

(b) the percentage or percentages (if any) to be fixed under paragraphs (2)(a) and (4) and the amount (if any) to be set under paragraph (2)(c).

(6) In making the determinations, the creditors’ committee must have regard to the following matters—

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

(b) any respects in which, in connection with the pursuit of either Objective 1, 2 or 3, there falls on the administrator any responsibility of an exceptional kind or degree,

(c) the effectiveness with which the administrator appears to be carrying out, or to have carried out, their duties as such, and

(d) the value and nature in each case of the property with which the administrator has to deal.

(7) If there is no creditors’ committee, or the committee does not make the requisite determinations, the basis of the administrator’s remuneration in each case may be fixed (in accordance with paragraphs (2) to (5)) by resolutions of a meeting of creditors and customers, or in respect of the administrator’s remuneration for the purpose outlined in rule 163(1)(b), a meeting of customers and paragraph (6) applies to them as it does to the creditors’ committee.

(8) If not fixed in accordance with paragraphs (5) or (7), the basis of the administrator’s remuneration must, on the administrator’s application, be fixed by the court and the provisions above apply as they do to the fixing of the basis of remuneration by the creditors’ committee.

(9) An application under paragraph (8) may not be made by the administrator unless the administrator has first sought to fix the basis in accordance with paragraph (5) or (7), and in any event may not be made more than eighteen months after the date of the administrator’s appointment.

(10) Where there are joint administrators, 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 creditors’ committee or a meeting of creditors and customers, for settlement by resolution.

(11) If the administrator is a solicitor and employs their own firm, or any partner in it, to act on behalf of the institution, profit costs must not be paid unless this is authorised by the creditors’ committee, the meeting of the creditors and customers, or the court.

Recourse to meeting of creditors and customers

164

If the basis of the administrator’s remuneration for either case in rule 163(1) has been fixed by the creditors’ committee, and the administrator considers, in either or in both cases, the rate or amount to be insufficient, or the basis to be inappropriate, the administrator may request that the rate or amount be increased or the basis changed by resolution of the creditors and the customers.

Recourse to the court

165

(1) If the administrator considers that the basis of remuneration for either case in rule 163(1) fixed for the administrator by—

(a) the creditors’ committee, or

(b) by resolution of the creditors and customers, or as the case may be, a meeting of customers,

is insufficient or inappropriate, the administrator may apply to the court for an order changing it or increasing its amount or rate.

(2) The administrator must give at least fourteen days’ notice of the application under paragraph (1) to the members of the creditors’ committee, and the creditors’ committee may nominate one or more members to appear, or be represented, and to be heard on the application.

(3) If there is no creditors’ committee, the notice of the application must be sent to such one or more of the institution’s creditors or customers as the court may direct and those creditors or customers must nominate one or more of their number to appear or be represented and be heard on the application.

(4) Notice of the application must also be given to the FCA and the FCA may nominate a person to appear and be heard on the application.

(5) The court may, if it appears to be a proper case, order the costs of the administrator’s application, including the costs of any member of the creditors’ committee appearing or being represented on it, or any creditor or customer so appearing or being represented, to be paid as an expense of the special administration.

Creditors’ and customers’ request for further information

166

(1) If—

(a) within twenty-one days of receipt of a progress report under rule 87—

(i) a secured creditor,

(ii) an unsecured creditor with the concurrence of at least five per cent in value of the unsecured creditors (including the creditor in question), or

(iii) a customer with the concurrence of customers whose relevant funds claims represent at least five per cent of all relevant funds claims (including the customer in question), or

(b) with the permission of the court upon an application made within that period of twenty-one days, any unsecured creditor or any customer,

makes a request in writing to the administrator for further information about remuneration or expenses (other than pre-administration costs) set out in a statement required by rule 87(1)(h) or (i), the administrator must, within fourteen days of receipt of the request, comply with paragraph (2).

(2) The administrator complies with this paragraph by either—

(a) providing all of the information asked for, or

(b) so far as the administrator considers that—

(i) the time or cost of preparation of the information would be excessive,

(ii) disclosure of the information would be prejudicial to the conduct of the special administration or might reasonably be expected to lead to violence against any person, or

(iii) the administrator is subject to an obligation of confidentiality in respect of the information,

giving reasons for not providing all of the information.

(3) Any creditor or customer, who need not be the same as the person who requested further information under paragraph (1), may apply to the court within twenty-one days of—

(a) the giving by the administrator of reasons for not providing all of the information asked for, or

(b) the expiry of the fourteen days provided for in paragraph (1),

and the court may make such order as it thinks just.

(4) Without prejudice to the generality of paragraph (3), the order of the court under that paragraph may extend the period of eight weeks provided for in rule 167(4) by such further period as the court thinks just.

Claim that remuneration is excessive

167

(1) The following persons may apply to the court for one or more of the orders in paragraph (7) in respect of the administrator’s remuneration for services set out in rule 163(1)(a)—

(a) a secured creditor,

(b) an unsecured creditor with either the concurrence of at least ten per cent in value of the unsecured creditors (including that creditor) or the permission of the court,

(c) a customer with the concurrence of customers whose relevant funds claims represent at least ten per cent of all relevant funds claims or with the permission of the court, or

(d) the FCA.

(2) A customer, with the concurrence of customers whose relevant funds claims represent at least ten per cent of the total relevant funds claims, or with the permission of the court, may apply to the court for one or more of the orders in paragraph (7) in respect of the administrator’s remuneration for services set out in rule 163(1)(b).

(3) An application under paragraphs (1) and (2) may be made on the grounds that—

(a) the remuneration charged by the administrator is, or the expenses incurred by the administrator are, in all the circumstances, excessive, or

(b) the basis fixed for the administrator’s remuneration is in all the circumstances excessive or inappropriate.

(4) The application must, subject to any order of the court under rule 166(4), be made no later than eight weeks after receipt by the applicant of the progress report which first reports the charging of the remuneration or the incurring of the expenses in question (“the relevant report”).

(5) The court may, if it thinks that no sufficient cause is shown for a reduction, dismiss the application without a hearing but it must not do so without giving the applicant at least five business days’ notice.

(6) Upon receipt of notice under paragraph (5), the applicant may require the court to list the application for a without notice hearing.

(7) If the application is not dismissed, the court must fix a venue for it to be heard, and give notice to the applicant accordingly.

(8) The applicant must, at least fourteen days before the hearing, send to the administrator a notice stating the venue and accompanied by a copy of the application, and of any evidence which the applicant intends to provide in support of the application.

(9) If the court considers the application to be well-founded, it may make one or more of the following orders—

(a) an order reducing the amount of remuneration which the administrator was entitled to charge,

(b) an order fixing the basis of remuneration at a reduced rate or amount,

(d) an order that some or all of the remuneration or expenses in question be treated as not being expenses of the special administration, or

(e) an order that the administrator or the administrator’s personal representative pay to the institution the amount of the excess of remuneration or expenses or such part of the excess as the court may specify,

and may make any other order that it thinks just, but an order under sub-paragraph (b) or (c) may be made only in respect of periods after the period covered by the relevant report.

(10) Unless the court orders otherwise, the costs of the application must be paid by the applicant, and are not payable as an expense of the special administration.

Review of remuneration

168

(1) Where, after the basis of the administrator’s remuneration has been fixed, there is a material and substantial change in the circumstances which were taken into account in fixing it, the administrator may request that it be changed.

(2) The request must be made—

(a) where the creditors’ committee fixed the basis, to the committee;

(b) where the creditors and customers fixed the basis, to the creditors and customers;

and this Chapter applies as appropriate.

(3) Any change in the basis for remuneration applies from the date of the request under paragraph (1) and not for any earlier period.

Remuneration of new administrator

169

If a new administrator is appointed in place of another, any determination, resolution or court order in effect under the preceding provisions of this Chapter immediately before the former administrator ceased to hold office continues to apply in respect of the remuneration of the new administrator until a further determination, resolution or court order is made in accordance with those provisions.

Apportionment of set fee remuneration

170

(1) In a case in which the basis of the administrator’s remuneration is a set amount under rule 163(2)(c)and the administrator (“the former administrator”) ceases (for whatever reason) to hold office before the time has elapsed or the work has been completed in respect of which the amount was set, application may be made for determination of what portion of the amount should be paid to the former administrator or the former administrator’s personal representative in respect of the time which has actually elapsed or the work which has actually been done.

(2) An application under paragraph (1) may be made—

(a) by the former administrator or the former administrator’s personal representative within the period of twenty-eight days beginning with the date upon which the former administrator ceased to hold office, or

(b) by the administrator for the time being in office if the former administrator or the former administrator’s personal representative has not applied by the end of that period.

(3) Application must be made—

(a) where the creditors’ committee fixed the basis, to that committee for a resolution determining the portion;

(b) where the creditors and customers fixed the basis, to the creditors and customers for a resolution determining the portion;

(4) The applicant must give a copy of the application to the administrator for the time being in office or to the former administrator or the former administrator’s personal representative, as the case may be (“the recipient”).

(5) The recipient may within twenty-one days of receipt of the copy of the application give notice of intent to make representations to the creditors’ committee or to the creditors and customers, or to appear or be represented before the court, as the case may be.

(6) No determination may be made upon the application until expiry of the twenty-one days referred to in paragraph (5) or, if the recipient does give notice of intent in accordance with that paragraph, until the recipient has been afforded the opportunity to make representations or to appear or be represented on the application, as the case may be.

(7) If the former administrator or the former administrator’s personal representative (whether or not the original applicant) considers that the portion determined upon application to the creditors’ committee or the creditors and customers is insufficient, that person may apply—

(a) in the case of a determination by the creditors’ committee, to the creditors and customers for a resolution increasing the portion;

(b) in the case of a resolution of the creditors and customers (whether under paragraph (1) or under sub-paragraph (a)), to the court for an order increasing the portion;

and paragraphs (4) to (6) apply as appropriate.

CHAPTER 3 — Replacing the administrator

Grounds for resignation

171

(1) The administrator may resign in the following circumstances—

(a) on grounds of ill health,

(b) that the administrator intends ceasing to be in practice as an insolvency practitioner, or

(c) that there is some conflict of interest, or change of personal circumstances, which precludes or makes impracticable the further discharge by that person of the duties of administrator.

(2) The administrator may, with the permission of the court, resign on grounds other than those specified in paragraph (1).

Notice of intention to resign

172

(1) The administrator must in all cases give at least five business days’ notice of their intention to resign, or their intention to apply for the court’s permission to do so, to the following persons—

(a) if there is a continuing administrator of the institution, to that person, and

(b) if there is a creditors’ committee, to it.

(2) If there is no continuing administrator and no creditors’ committee, the administrator must give at least five business days’ notice of their intention to resign, or their intention to apply for the court’s permission to do so, to the institution and its creditors and customers of whose claim the administrator is aware and whom the administrator has a means of contacting.

(3) Where the administrator was appointed on the application of the FCA or the Secretary of State, notice under paragraph (1) or paragraph (2) must also be given to the applicant.

(4) Notice under paragraph (1) or paragraph (2) must set out—

(a) a statement that the proceedings are being held in the court and the court reference number;

(b) the full name, registered address, registered number of the institution;

(d) either—

(i) the date on which the administrator’s resignation shall take effect, or

(ii) the date upon which the administrator intends to apply to the court for leave to resign.

Notice of resignation

173

(1) The notice of resignation must set out—

(a) a statement that the proceedings are being held in the court and the court reference number,

(b) the full name, registered address and registered number of the institution,

(d) whether or not the person resigning is the sole administrator of the institution, and

(e) a statement that either—

(i) the administrator resigns from office with effect from a specified date, or

(ii) the court gave the administrator leave to resign (and the statement must include the date of the court’s permission) and that the administrator therefore resigns with effect from a specified date.

(2) The notice must be filed with the court and a copy of the notice of resignation must be sent not more than five business days after it has been filed with the court to all those to whom the notice of intention to resign was sent.

(3) The administrator must notify the registrar of companies of their resignation.

Application to court to remove administrator from office

174

(1) Any application under paragraph 88 must state the grounds on which it is requested that the administrator should be removed from office.

(2) Notice of the application must be served on—

(a) the administrator,

(b) the person who made the application for the special administration order,

(d) the joint administrator (if any),

(e) where there is neither a creditors’ committee nor a joint administrator, the institution and all the creditors and customers of whose claim the administrator is aware and of whom they have a means of contacting, and

(f) the FCA.

(3) Where a court makes an order removing the administrator it must give a copy of the order to the applicant, who as soon as is reasonably practicable must send a copy to the administrator.

(4) The applicant must also within five business days of the order being made send a copy of the order to all those to whom notice of the application was sent.

(5) The applicant must send notice of the order to the registrar of companies within five business days of the order being made.

Notice of vacation of office when administrator ceases to be qualified

175

Where the administrator who has ceased to be qualified to act as an insolvency practitioner in relation to the institution gives notice in accordance with paragraph 89, notice must also be given to—

(a) the registrar of companies, and

(b) where the administrator was appointed on the application of the FCA or the Secretary of State, to the applicant.

Administrator deceased

176

(1) Subject to paragraphs (2) to (4), where the administrator has died, it is the duty of the administrator’s personal representatives to give notice of the fact to the court, specifying the date of the death. This does not apply if notice has been given under either paragraph (3) or (4) of this rule.

(2) Notice of the death must also be sent to the registrar of companies.

(3) If the deceased administrator was a partner in or an employee of a firm, notice to the court may be given 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 Secretary of State or the Department for the Economy for Northern Ireland for the authorisation of insolvency practitioners.

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

Application to replace

177

(1) Where an application is made to court under paragraph 91(1) to appoint a replacement administrator, the application must be accompanied by a written statement by the person proposed to be the replacement administrator.

(2) The written statement must be in accordance with rule 7.

(3) A copy of the application must be served on—

(a) the person who made the application for a special administration order,

(b) the institution (if neither the institution nor its directors are the applicant),

(d) the FCA (if not the applicant).

(4) Rule 10 shall apply to the service of an application under paragraph 91(1) as it applies to service of the application for a special administration order.

(5) Rules 11 and 13 apply to an application under this rule and rule 16(1) and (2) shall apply to the notice of appointment under paragraph 91(1) as it applies to notice of a special administration order.

Notification and advertisement of appointment of replacement administrator

178

(1) Subject to rule 180, where a replacement administrator is appointed, the same provisions apply in respect of giving notice of, and advertising, the replacement appointment as in the case of the initial appointment.

(2) All statements, consents and notices as are required for the initial appointment are also required in the case of the appointment of a replacement administrator.

(3) All notices must clearly identify that the appointment is of a replacement administrator.

Notification and advertisement of appointment of joint administrator

179

Subject to rule 180, where, after an initial appointment has been made, an additional person or persons are to be appointed as joint administrator, the same rules apply in respect of giving notice of and advertising the appointment as applied in relation to the initial appointment.

Notification of new administrator

180

(1) The replacement or additional administrator must send notice of the appointment to the registrar of companies.

(2) The notice in paragraph (1) must contain—

(a) the name and business address of the administrator appointed,

(b) the name, registered address and registered number of the institution in respect of which the appointment is made,

(c) whether the administrator is appointed to replace an existing administrator or in addition to a previously appointed administrator, and

(d) the date from which the administrator’s appointment will take effect.

Administrator’s duties on vacating office

181

(1) Where the administrator (‘A’) ceases to be in office in consequence of this Chapter, A is under obligation as soon as is reasonably practicable to deliver up to the person succeeding A as administrator (‘B’)—

(a) the assets (after deduction of any expenses properly incurred and distributions made by A),

(b) the records of the special administration, including correspondence, proofs and other related papers appertaining to the special administration while it was within A’s responsibility, and

(2) If A makes default in complying with this rule, A is liable to a fine and, for continued contravention, to a daily default fine in each case as set out in the Schedule to these Rules.

PART 9 — End of special administration

Final progress reports

182

(1) In this Part, reference to a progress report is to a report in the form specified in rule 87.

(2) The final progress report means a progress report which includes a summary of—

(a) the administrator’s proposals (including whether the FCA has given a direction under regulation 38 and whether that direction has been withdrawn),

(b) any major amendments to, or deviations from, those proposals,

(d) the outcome.

Application to court by administrator

183

(1) An application to court under paragraph 79 for an order ending a special administration must have attached to it—

(a) a progress report for the period since the last progress report (if any) or the date the institution entered special administration, and

(b) a statement indicating what the administrator thinks should be the next steps for the institution (if applicable).

(2) Before making the application under paragraph (1), the administrator must—

(a) give notice in writing to—

(i) the applicant for the special administration order under which the administrator was appointed,

(ii) the creditors and customers, and

(iii) the FCA, and

(b) attach to the application a statement that the creditors and customers have been notified of the application and copies of any response to that notification.

(3) Notice under paragraph (2)(a) must be given at least five business days before the date that the administrator intends to make the application.

(4) The administrator—

(a) must send a copy of the application under paragraph (1) to the FCA,

(b) must, within five business days of filing the application, gazette a notice undertaking to provide a copy of the application to any person who so requests it (and an address to which they can write), and

Application to court by creditor

184

(1) Where a creditor applies to the court to end the special administration a copy of the application must be served on—

(a) the administrator,

(b) the person who made the application for the special administration order, and

(2) Service must be effected not less than five business days before the date fixed for the hearing.

(3) The persons in paragraph (1) may appear at the hearing of the application.

(4) Where the court makes an order to end the special administration, the court must send a copy of the order to the administrator.

Notification by administrator of court order

185

Where the court makes an order to end the special administration, the administrator must send—

(a) a copy of the court order to the registrar of companies within the period of fourteen days beginning with the date of the order,

(b) a copy of the final progress report to the registrar of companies as soon as is reasonably practicable, and

(c) a copy of the court order and a copy of the final progress report to all other persons to whom notice of the administrator’s appointment was delivered as soon as is reasonably practicable.

Moving from special administration to dissolution

186

(1) Where, for the purposes of paragraph 84(1), the administrator sends a notice of moving from special administration to dissolution to the registrar of companies, the administrator must attach to that notice a copy of the final progress report.

(2) As soon as is reasonably practicable, a copy of the notice and the attached document must be sent to all other persons who received notice of the administrator’s appointment.

(3) Where a court makes an order under paragraph 84(7) it must, where the applicant is not the administrator, give a copy of the order to the administrator.

PART 10 — Court procedure and practice

CHAPTER 1 — Application of the CPR

Principal court rules and practice to apply

187

(1) The provisions of the CPR in the first column of the table in this rule (including any related practice direction) apply to special administration by virtue of the provisions of these Rules set out in the second column with any necessary modifications, except so far as inconsistent with these Rules.

Provision of CPR	Provisions of these Rules
CPR Part 6 (service of documents)	Chapter 4 of Part 10
CPR Part 18 (further information)	Rules 192 and 213(c)(ii)
CPR Part 31 (disclosure and inspection of documents)	Rules 192 and 213
CPR Part 37[^f00019] (miscellaneous provisions about payments into court)	Rule 191
CPR Parts 44 (general rules about costs) and 47 (procedure for assessment of costs and default provisions)	Chapter 10 of Part 10
CPR Part 52[^f00020] (appeals)	Chapter 12 of Part 10

(2) Subject to paragraph (3), the provisions of the CPR (including any related practice direction) not referred to in the table apply to proceedings under the Regulations and these Rules with any necessary modifications, except so far as inconsistent with these Rules.

(3) Proceedings in a special administration must be allocated to the multi-track for which CPR Part 29 makes provision, and accordingly those provisions of the CPR which provide for allocation questionnaires and track allocation do not apply.

(4) CPR Part 32 applies to a false statement in a document verified by a statement of truth made under these Rules as it applies to a false statement in a document verified by a statement of truth made under CPR Part 22.

CHAPTER 2 — The Court

Shorthand writers — nomination, appointment, remuneration and costs

188

(1) The judge or registrar may in writing nominate one or more persons to be official shorthand writers to the court.

(2) The court may, at any time in the course of the special administration appoint a shorthand writer to take down evidence of a person examined under section 236 of the IA 1986[^f00021].

(3) The remuneration of a shorthand writer appointed under this rule must 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.

(4) Any question arising as to the rates of remuneration payable under this rule must be determined by the court.

Court file

189

(1) The court must open and maintain a file in any case where documents are filed with it under the Regulations or these Rules.

(2) Any documents which are filed with the court under the Regulations or these Rules must be placed on the file opened in accordance with paragraph (1).

(3) The following persons may inspect or obtain from the court a copy of, or a copy of any document or documents contained in, the file opened in accordance with paragraph (1)—

(a) the administrator,

(b) the Secretary of State,

(d) any person who is a creditor of the institution if that person provides the court with a statement in writing confirming that that person is a creditor, and

(e) any person who is a customer of the institution if that person provides the court with a statement in writing confirming that that person is a customer.

(4) The same right to inspect or obtain a copy of, or a copy of any document or documents contained in, the file opened in accordance with paragraph (1) is exercisable by—

(a) an officer or former officer of the institution in special administration, or

(b) a member of the institution or a contributory in the special administration.

(5) A person’s right to inspect or obtain a copy of, or a copy of any document or documents contained in, the file opened in accordance with paragraph (1) may be exercised on that person’s behalf by someone authorised to do so by that person.

(6) Any person who is not otherwise entitled to inspect or obtain a copy of, or a copy of any document or documents contained in, the file opened in accordance with paragraph (1) may do so if that person has the permission of the court.

(7) The court may direct that the file, a document (or part of it) or a copy of a document (or part of it) must not be made available under paragraph (3), (4) or (5) without the permission of the court.

(8) An application for a direction under paragraph (7) may be made by—

(a) the administrator,

(b) the FCA, or

(9) Where any person wishes to exercise the right to inspect the file under paragraph (3), (4), (5) or (6), that person—

(a) if the permission of the court is required, must file with the court an application notice in accordance with these Rules, or

(b) if the permission of the court is not required, may inspect the file at any reasonable time.

(10) Where any person wishes to exercise the right to obtain a copy of, or a copy of any document or documents contained in, the file under paragraph (3), (4), (5) or (6), that person must pay any prescribed fee and—

(a) if the permission of the court is required, file with the court an application notice in accordance with these Rules, or

(b) if the permission of the court is not required, file with the court a written request for the document.

(11) An application for—

(a) permission to inspect the file or obtain a copy of a document under paragraph (6), or

(b) a direction under paragraph (7),

may be made without notice to any other party, but the court may direct that notice must be given to any person who would be affected by its decision.

(12) If for the purposes of powers conferred by the Regulations or these Rules, the Secretary of State makes a request to inspect or requests the transmission of the file of any insolvency proceedings, the court must comply with the request (unless the file is for the time being in use for the court’s own purposes).

Office copies of documents

190

(1) The court must provide an office copy of any document from the court file of the special administration to any person who under these Rules has the right to inspect the court file where that person has requested such a copy.

(2) A person’s rights under this rule may be exercised on that person’s behalf by that person’s solicitor.

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

Payments into court

191

CPR Part 37 (miscellaneous provisions about payments into court) applies to money lodged in court under these Rules.

CHAPTER 3 — Obtaining information and evidence

Further information and disclosure

192

(1) Any party to the special administration may apply to the court for an order—

(a) that any other party—

(i) clarify any matter that is in dispute in the proceedings, or

(ii) give additional information in relation to any such matter, in accordance with CPR Part 18 (further information), or

(b) to obtain disclosure from any other party in accordance with CPR Part 31 (disclosure and inspection of documents).

(2) An application under this rule may be made without notice being served on any other party.

Witness statements — general

193

(1) Where evidence is required by the Regulations or these Rules as to any matter, such evidence may be provided in the form of a witness statement unless—

(a) in any specific case a rule (including rule 195) or the Regulations makes different provision, or

(b) the court otherwise directs.

(2) The court may, on the application of any party to the matter in question order the attendance for cross-examination of the person making the witness statement.

(3) Where, after such an order has been made, the person in question does not attend, that person’s witness statement must not be used in evidence without the leave of the court.

Filing and service of witness statements

194

Unless the provision of the Regulations or Rules under which the application is made provides otherwise, or the court otherwise allows—

(a) if the applicant intends to rely at the first hearing on evidence in a witness statement, the applicant must file that witness statement with the court and serve a copy of it on the respondent not less than fourteen days before the date fixed for the hearing, and

(b) where the respondent to an application intends to oppose it and rely for that purpose on evidence contained in a witness statement, the respondent must file the witness statement with the court and serve a copy on the applicant not less than five business days before the date fixed for the hearing.

Evidence provided by the administrator

195

(1) Where in the special administration a witness statement is made by the administrator, the witness statement must state—

(a) the capacity in which that person makes the statement, and

(b) the person’s business address.

(2) The administrator may file a report with the court instead of a witness statement unless the application involves other parties or the court otherwise orders.

(3) In any case where a report is filed instead of a witness statement, the report must be treated for the purpose of rule 194 and any hearing before the court as if it were a witness statement.

CHAPTER 4 — Service of court documents

Application of Chapter

196

(1) Subject to paragraph (2), this Chapter applies in relation to the service of—

(a) applications,

(b) documents relating to applications, and

which are required to be served by any provision of the Regulations or these Rules (“court documents”).

(2) For the purpose of the application by this Chapter of CPR Part 6 to the service of court documents, an application within the special administration against a respondent is to be treated as a claim form.

Service of court documents within the jurisdiction

197

Except where different provision is made in the Regulations or these Rules, CPR Part 6 applies in relation to the service of court documents with such modifications as the court may direct.

Service of court documents outside jurisdiction

198

CPR Part 6 applies to the service of court documents outside the jurisdiction with such modifications as the court may direct.

Service of orders staying proceedings

199

Where the court makes an order staying any action, execution or other legal process against the property of the institution, the order may be served within the jurisdiction by serving a sealed copy of the order on the address for service of the claimant or other party having the carriage of the proceedings to be stayed.

Service on joint office-holders

200

Where there are joint administrators, service of court documents on one of them is to be treated as service on all of them.

CHAPTER 5 — Applications to court – general

Application of Chapter

201

This Chapter applies to any application made to the court under the Regulations or these Rules except an application for a special administration order under regulation 8.

Form and contents of application

202

(1) Each application must be in writing and must state—

(a) that the application is made under the Regulations or these Rules,

(b) the names of the parties,

(d) that the proceedings are being held in the court and the court reference number,

(e) where the court has previously allocated a number to the insolvency proceedings within which the application is made, that number,

(f) the nature of the remedy or order applied for or the directions sought from the court,

(g) the names and addresses of the persons on whom it is intended to serve the application or that no person is intended to be served,

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

(i) the applicant’s address for service.

(2) The application must be authenticated by the applicant if the applicant is acting in person or, when the applicant is not so acting, by or on behalf of the applicant’s solicitor.

Filing and service of application

203

(1) An application must be filed with the 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) Where an application is filed with the court in accordance with paragraph (1), the court must fix a venue for the application to be heard unless—

(a) it considers it is not appropriate to do so,

(b) the rule or regulation under which the application is brought provides otherwise, or

(3) Unless the court otherwise directs, the applicant must 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 Regulations or Rules,

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

(5) An application must be served at least fourteen days before the date fixed for its hearing unless—

(a) the provision of the Regulations or these Rules under which the application is made makes different provision, or

(b) the case is one of urgency, to which paragraph (6) applies.

(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 just.

Directions

204

The court may at any time give such directions as it thinks just as to—

(a) service or notice of the application on or to any person,

(b) whether particulars of claim and defence are to be delivered and generally as to the procedure on the application including whether a hearing is necessary, and

Hearings without notice

205

Where the relevant provisions of the Regulations or these Rules do not require service of the application on, or notice of it to be given to, any person—

(a) the court may hear the application as soon as is reasonably practicable without fixing a venue as required by rule 203(2), or

(b) it may fix a venue for the application to be heard in which case rule 203 will apply to the extent that it is relevant,

but nothing in those provisions is to be taken as prohibiting the applicant from giving such notice if the applicant wishes to do so.

Hearing of application

206

(1) Unless the court otherwise directs, the hearing of an application must be in open court.

(2) In the court, the jurisdiction of the court to hear and determine an application may be exercised by the registrar (to whom the application must be made in the first instance) unless—

(a) a direction to the contrary has been given, or

(b) it is not within the registrar’s power to make the order required.

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

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

Adjournment of the hearing of an application

207

(1) The court may adjourn the hearing of an application on such terms as it thinks just.

(2) The court may give directions as to the manner in which any evidence is to be provided at a resumed hearing and in particular as to—

(a) the taking of evidence wholly or partly by witness statement or orally,

(b) the cross-examination of the maker of a witness statement, or

CHAPTER 6 — Applications to the court under section 176A of the IA 1986

Application of Chapter

208

The rules in this Chapter apply to applications in connection with section 176A of the IA 1986.

Applications under section 176A(5) to disapply section 176A

209

(1) An application under section 176A(5) must be accompanied by a witness statement by the administrator.

(2) The witness statement must state—

(a) that the institution is in special administration,

(b) a summary of the financial position of the institution, and

(c) the information substantiating the administrator’s view that the cost of making a distribution to unsecured creditors would be disproportionate to the benefits.

Notice of application under section 176A(5)

210

An application under section 176A(5) may be made without the application being served upon, or notice being given to any other party.

Notice of an order under section 176A(5)

211

(1) Where the court makes an order under section 176A(5), it must as soon as is reasonably practicable deliver 2 sealed copies of the order to the applicant.

(2) Where the court has made an order under section 176A(5), the administrator must as soon as is reasonably practicable give notice to each creditor of whose address the administrator is aware.

(3) Paragraph (2) does not apply where the court directs otherwise.

(4) The court may direct that the requirement in paragraph (2) is complied with if a notice has been published by the administrator which, in addition to containing the standard contents, states that the court has made an order disapplying the requirement to set aside the prescribed part. As soon as is reasonably practicable the notice—

(a) must be gazetted, and

(b) may be advertised in such other manner as the administrator thinks fit.

(5) The administrator must send a copy of the order to the registrar of companies as soon as is reasonably practicable after the making of the order.

CHAPTER 7 — Applications for an order under section 236 of the IA 1986

Application of section 236 of the IA 1986

212

(1) This Chapter applies to applications to the court for an order under section 236 of the IA 1986.

(2) In this Chapter, “the respondent” means the person in respect of whom an order is applied for.

Form and contents of application

213

An application to which this Chapter applies—

(a) must be in writing and specify the grounds on which it is made,

(b) must specify the name of the respondent,

(i) the respondent to be ordered to appear before the court,

(ii) the respondent to be ordered to clarify any matter which is in dispute in the proceedings or to give additional information in relation to any such matter (in which case CPR Part 18 (further information) shall apply to any such order),

(iii) the respondent to submit witness statements (if so, particulars must be given of the matters to be included),

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

(v) any two or more of those purposes, and

(d) may be made without notice to any other party.

Order for examination etc.

214

(1) The court may, whatever the purpose of the application, make any order which it has power to make under section 236 of the IA 1986.

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

(3) If the respondent is ordered to submit witness statements, the order must specify—

(a) the matters which are to be dealt with in the respondent’s witness statements, 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 must be specified.

(5) The order must be served as soon as is reasonably practicable on the respondent.

Procedure for examination

215

(1) At any examination of the respondent, the administrator 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) Unless the administrator objects, the following persons may attend the examination with the permission of the court and may put questions to the respondent (but only through the administrator)—

(a) any person who could have applied for an order under section 236 of the IA 1986, and

(b) any creditor or customer who has provided information on which the application was made under that section.

(3) If the respondent is ordered to clarify any matter or to give additional information, the court must direct the respondent as to the questions which the respondent is required to answer, and as to whether the respondent’s answers (if any) are to be made in a witness statement.

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

(5) Such written record of the examination must be made as the court thinks proper and such record must be read over either to or by the respondent and authenticated by the respondent at a venue fixed by the court.

(6) The written record may, in any proceedings (whether under the Regulations, these Rules or otherwise), be used as evidence against the respondent of any statement made by the respondent in the course of the respondent’s examination.

Record of examination

216

(1) Unless the court otherwise directs, the written record of questions put to the respondent and the respondent’s answers, and any witness statements submitted by the respondent in compliance with an order of the court under section 236 of the IA 1986, are not to be filed with the court.

(2) The documents set out in paragraph (3) are not open to inspection without an order of the court, by any person other than the administrator.

(3) The documents to which paragraph (2) applies are—

(a) the written record of the respondent’s examination,

(b) copies of questions put to the respondent or proposed to be put to the respondent and answers to questions given by the respondent,

(d) any document on the court file as shows grounds for the application for the order.

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

Costs of proceedings under section 236 of the IA 1986

217

(1) Where the court has ordered an examination of any person under section 236 of the IA 1986 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 the respondent.

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

(a) section 237(1)[^f00022] of the IA 1986, or

(b) section 237(2) of the IA 1986,

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 administrator’s costs will, unless the court otherwise orders, be paid as an expense of the special administration.

(4) A person summoned to attend for examination under this Chapter must be tendered a reasonable sum in respect of travelling expenses incurred in connection with that person’s attendance but any other costs falling on that person are at the court’s discretion.

CHAPTER 8 — People who lack capacity to manage their affairs etc.

Application of Chapter 8

218

(1) The rules in this Chapter apply where in a special administration it appears to the court that a person affected by the proceedings is unable to manage and administer that person’s own property and affairs by reason of:

(a) lacking capacity within the meaning of the Mental Capacity Act 2005[^f00023],

(b) suffering from a physical affliction, or

(2) Such a person is referred to in this Chapter as “the incapacitated person”.

Appointment of another person to act

219

(1) The court may appoint such person as it thinks just to appear for, represent or act for the incapacitated person.

(2) An appointment made under paragraph (1) 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 that person’s incapacity.

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

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The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021

Discounts

131

Mutual credit and set-off

132

Debt in a foreign currency

133

Payments of a periodical nature

134

Interest

135

Debt payable at a future time

136

Value of security

137

Surrender for non-disclosure

138

Redemption by administrator

139

Test of security’s value

140

Realisation of security by creditor

141

Notice of proposed distribution

142

Admission or rejection of proofs

143

Postponement or cancellation of dividend

144

Declaration of a dividend

145

Notice of declaration of a dividend

146

Payments of dividend and related matters

147

Notice of no dividend or no further dividend

148

Proof altered after payment of dividend

149

Secured creditors

150

Disqualification from dividend

151

Assignment of right to dividend

152

Debt payable at a future time

153

PART 8 — The Administrator

CHAPTER 1 — Powers of the administrator

General powers

154

Powers of disclaimer

155

Communication of disclaimer to persons interested

156

Additional notices

157

Records

158

Application by interested party

159

Interest in property to be declared on request

160

Disclaimer presumed valid and effective

161

Application for the exercise of court’s powers under section 181

162

CHAPTER 2 — Fixing of remuneration

Fixing of remuneration

163

Recourse to meeting of creditors and customers

164

Recourse to the court

165

Creditors’ and customers’ request for further information

166

Claim that remuneration is excessive

167

Review of remuneration

168