Multicultural Media Centre For The Millennium Ltd, Re Insolvency Act 1986

On an application for permission to appeal a winding-up order, permission should be granted where the court cannot say that the proposed appeal has no real prospect of success. A winding-up order should not be made on the basis of a disputed debt. It is at least arguably dangerous for the Companies Court to resolve the dispute using a substantial affidavit served shortly before the hearing, where the company had no proper opportunity to answer it and was unrepresented. Permission does not determine whether the creditor’s claim or the company’s counterclaims will ultimately succeed.

The Millennium Commission petitioned to wind up the company after serving a statutory demand for repayment of grant funding. Mr Justice Rimer made a winding-up order on 6 December 2000. The company’s director and chief executive, Mr Harte, sought permission to appeal. He contended that detailed affidavit evidence served shortly before the hearing had been accepted without adequate opportunity to respond, and that the company had substantial counterclaims, including claims connected with BBC training arrangements and intellectual property. The central issue was whether the proposed appeal had a real prospect of success and whether the disputed debt had been resolved fairly.

Permission granted. Lord Justice Chadwick, sitting on the permission application, held that he could not say that the proposed appeal had no real prospect of success. The matter should therefore be considered by the Court of Appeal.

1. Disputed debt. The judge below had correctly accepted that a winding-up order is not made on the basis of a disputed debt. The debt claimed by the Millennium Commission had been disputed from an early stage.
2. Late affidavit evidence. The Commission’s director served a substantial affidavit only two days before the hearing, with the exhibits handed to Mr Harte on the morning of the trial. The material went well beyond a normal statutory affidavit. Mr Harte was unrepresented and had not had a proper opportunity to read or digest it. It was at least arguably dangerous for the Companies Court to proceed on that basis, because the company might have had an answer to the allegations. The court did not determine whether such an answer would succeed.
3. Counterclaims. The company advanced claims concerning unpaid salaries and fees, including approximately £64,000 said to be due to the BBC under a training contract. It also claimed that the Commission had taken over intellectual property in the training schemes without compensation. The material before the court was insufficient to determine the merits of those counterclaims.
4. Order. Permission to appeal was granted, with a four-hour time estimate. Notice of appeal was to be served in accordance with the rules, and the costs of the permission application were made costs in the appeal.

1. Court of Appeal (Civil Division) — On 22 March 2001, Lord Justice Chadwick granted permission to appeal from the winding-up order: [2001] EWCA Civ 509.
2. Companies Court — Mr Justice Rimer made the winding-up order on 6 December 2000 on the Millennium Commission’s petition.