A Company

An application to rescind a winding-up order must be made within the period prescribed by the Insolvency Rules 1986, unless the court exercises its jurisdiction to extend time. That jurisdiction is exercised cautiously because a winding-up order affects persons beyond the company and petitioning creditor. A substantial delay requires sufficiently exceptional justification. The fact that the application might have succeeded on its merits if made in time does not, by itself, justify an extension. An appellate court will not interfere with the first-instance exercise of discretion unless the judge misdirected herself, considered irrelevant matters, omitted relevant matters, or reached an impermissible conclusion.

The applicant company appealed against the refusal of Mrs Registrar Derritt to extend time for an application to rescind a winding-up order. The order had been made on 9 April 2003 on a petition presented by the Commissioners of Customs & Excise. The company’s directors became aware of the order in mid-April but did not instruct solicitors to make the rescission application until early June.

The company argued that the petition had not been properly served, that the Registrar had placed excessive weight on the absence of a response, and that she had failed to appreciate the company’s cross-claim and other matters affecting the petition debt. The central issue was whether the delay should be excused under rule 7.47(4).

1. Appeal dismissed. The Registrar had jurisdiction to extend the seven-day period under rule 7.47(4) of the Insolvency Rules 1986, but exercised that jurisdiction properly.
2. The court is guarded in reviewing or rescinding a winding-up order because the order affects persons beyond the company and petitioning creditor. The statutory time limit therefore requires strict observance, and an extension after substantial delay requires sufficiently exceptional reasons.
3. The directors became aware of the winding-up order in mid-April, yet did not instruct solicitors until approximately eight weeks later. Their reliance on accountants and a VAT consultant, and the absence of evidence explaining the delay, did not provide a sufficient excuse.
4. The company’s possible merits if it had applied in time did not determine the extension application. Although the cross-liability for costs might have enabled the company to dispute the petition debt, the relevant question was whether the delay should be excused.
5. The service challenge under rule 4.83(c) failed. The rule required deposit at or about the registered office in a manner likely to come to the notice of a person attending there. The evidence did not establish that the directors had made no arrangements for documents at the registered office to reach them.
6. Any factual error concerning the scope of the company’s Tribunal appeal was immaterial and did not affect the Registrar’s decision. The liquidation did not necessarily prevent the company from pursuing any claim for damages; any such issue could be addressed in the conduct of the liquidation.

1. High Court (Chancery Division) — The appeal from the Registrar’s decision of 16 July 2003 was dismissed.
2. Chancery Division — Mrs Registrar Derritt refused to extend time for an application to rescind the winding-up order. Her written reasons were handed down on 6 August 2003.