Wei Hai Restaurant Limited v HM Customs & Excise

Permission for a second appeal requires an important point of practice or principle, or another compelling reason, under CPR 52.13. A company cannot establish that threshold merely by disputing part of a petition debt where an undisputed debt has fallen due and remains unpaid. Such a debt may satisfy section 123(1)(e) of the Insolvency Act 1986. Unsupported allegations of abuse of process or false evidence do not justify a second appeal. A rescission application also requires proper evidence supporting the proposed basis for rescission.

Wei Hai Restaurant Limited v HM Customs & Excise concerned a winding-up petition for VAT, default surcharges and interest claimed by the Commissioners. The company was compulsorily wound up by District Judge Spencer on 21 February 2002. District Judge Flanagan refused the company's application to review and rescind the order on 7 March 2002.

His Honour Judge Behrens, sitting as a High Court Judge, dismissed the company's appeals on 23 May 2002. The company sought permission for a second appeal against both decisions, alleging abuse of process and false evidence, and also sought a stay. The central issue was whether the requirements of CPR 52.13 were met.

1. Disposition. Lord Justice Peter Gibson dismissed the application for permission to bring a second appeal. The Court of Appeal had no jurisdiction under CPR 52.13 unless an important point of practice or principle arose, or there was another compelling reason for the appeal to be heard.
2. Alleged abuse and false evidence. The company's allegations were unsupported. The fact that an earlier petition had been dismissed did not prove an abuse of process or that false evidence had been given. Those allegations therefore disclosed no compelling reason for a second appeal.
3. Undisputed debt. The company acknowledged that approximately £9,400 was due. The Commissioners had never accepted that this was the only sum owing. The court stated that, where an undisputed debt had fallen due and remained unpaid, the practice was to treat it as satisfying section 123(1)(e) of the Insolvency Act 1986, under which a company was deemed unable to pay its debts when unable to pay them as they fell due.
4. Rescission application. The company had filed no affidavit opposing the petition as required by rule 4.18 of the Insolvency Rules 1986. It had also filed no witness statement or affidavit objectively demonstrating that a £25,000 offer for the business and assets existed and represented a proper price. The complaint that more time should have been allowed for payment did not alter the position, since the petition had remained outstanding for many months and no payment or accommodation had been reached.
5. The order was: application dismissed.

• Court of Appeal (Civil Division): dismissed the application for permission to bring a second appeal on 17 October 2002; [2002] EWCA Civ 1647.
• Chancery Division: His Honour Judge Behrens, sitting as a High Court Judge, dismissed the company's appeals on 23 May 2002.
• Leeds District Registry: District Judge Spencer made the winding-up order on 21 February 2002. District Judge Flanagan refused the application to review and rescind it on 7 March 2002.