Revenue And Customs v Direct Affinity Events Ltd & Ors

Where a winding-up order is later rescinded, the official receiver’s statutory administration and general fees arise on the making of the order but are recoverable only from chargeable receipts under the Insolvency Proceedings (Fees) Order 2016. The Order does not create an independent right to recover the full statutory fees from the petitioning creditor. The petition deposit may be retained and applied towards the administration fee. If the official receiver’s actual costs exceed the retained deposit and there are no chargeable receipts, the court may assess and order payment of those actual costs under Civil Procedure Rules 1998, rule 44.

HM Revenue and Customs presented winding-up petitions against three companies. In each case a winding-up order was made in error and subsequently rescinded under rule 12.59(1) of the Insolvency (England and Wales) Rules 2016. The remaining dispute concerned the Official Receiver’s entitlement to recover the £5,000 administration fee and £6,000 general fee under the Insolvency Proceedings (Fees) Order 2016.

HMRC accepted responsibility for the relevant costs but argued that only reasonably incurred costs were recoverable. The Official Receiver argued that both statutory fees became payable automatically on the making of each winding-up order. The central issue was the effect of the 2016 Order where the orders were later rescinded and no chargeable receipts had been realised.

1. The court rejected the submission that rescission rendered the winding-up orders nullities without legal consequences. The making of an order immediately appointed the Official Receiver as liquidator and imposed statutory obligations. Rescission therefore did not extinguish the Official Receiver’s entitlement to recover costs actually incurred in consequence of that appointment.

2. On the proper construction of the Insolvency Proceedings (Fees) Order 2016, both the administration fee and the general fee arose on the making of a winding-up order. Their recovery, however, was limited to available chargeable receipts. The Order did not confer a statutory right to demand the balance of either fee from the petitioning creditor or another third party.

3. The general fee was not an independent charge recoverable from a petitioner. It operated as a levy on estates with sufficient chargeable receipts, compensating the Official Receiver for administering assetless estates. The statutory fees were payable in full by reference to the Order where sufficient chargeable receipts existed, regardless of the actual costs of generating those receipts.

4. Regulation 4(5) permitted the Official Receiver to retain the petition deposit where an order had been made and the company’s assets were insufficient to discharge the administration fee, including where the order was later rescinded. In the present cases there were no chargeable receipts, so the deposit represented the limit of the statutory fee recovery.

5. Where actual costs exceeded the retained deposit, the court retained an unfettered jurisdiction to assess those costs and, having regard to the circumstances, order the petitioner to pay them. Any disputed amount was to be assessed under rule 44 of the Civil Procedure Rules 1998. The conclusion was confined to cases involving no chargeable receipts and minimal costs.