London Borough of Camden Council & Anor v Saint Benedict's Land Trust Ltd

A winding-up petition is not necessarily a nullity because a separate witness statement verifying it was unsigned when the petition was filed. The relevant question is whether the defect invalidates the proceedings or can be remedied. Under rule 12.64 of the Insolvency Rules 2016, a formal defect or irregularity does not invalidate insolvency proceedings unless it caused substantial injustice which cannot be remedied by an order of the court. Verification remains an important requirement, particularly before a winding-up order is made. Applications brought late, after the petition debt has been paid, and seeking unnecessary further hearings may properly be declared totally without merit.

Saint Benedict’s Land Trust Limited applied for permission to appeal and, if permission were granted, to set aside an order dismissing a winding-up petition presented by London Borough of Camden Council in respect of unpaid business rates. Preston City Council supported the petition in respect of unpaid costs orders.

The petition debt was paid after presentation. The District Judge dismissed the petition, awarded the creditors’ costs, rejected an argument that the petition was invalid because its verifying witness statement was unsigned, and declared two applications by the debtor totally without merit. The central issues were whether the lack of signature made the petition a nullity, whether rule 12.64 applied, and whether the applications had properly been characterised as totally without merit.

1. Permission to appeal refused. None of the proposed grounds had realistic prospects of success.
2. The failure to sign a separate witness statement verifying a winding-up petition when it was filed did not make the petition a nullity ab initio. Rule 7.6 of the Insolvency Rules 2016 requires verification, but does not expressly require a separate verifying statement to be signed or filed before the petition is presented. Rules 7.7 and 7.9 likewise contain no such requirement.
3. The purpose of verification is to provide evidence for the court at the petition hearing. It remains an important requirement, and it would ordinarily be difficult to justify making a winding-up order on an unverified petition, but the defect does not automatically invalidate the proceedings.
4. The approach was consistent with Re The Western Benefit Building Society (1864) 33 Beav 368, where an incorrectly timed verifying affidavit was remedied without requiring a fresh petition.
5. Rule 12.64 applied. The debtor had not shown substantial injustice caused by the accidental omission. The petition debt had been paid, the alleged defect was capable of remedy, and the debtor’s substantive objections had already failed to justify restraining advertisement. The District Judge was therefore entitled to dismiss the petition with costs rather than strike it out as an abuse of process.
6. The First Application and Second Application were properly declared totally without merit. The first sought substantial further proceedings after payment of the petition debt; the second sought an adjournment on the eve of the hearing for research into a straightforward point. Further court time and costs were unjustified.
7. Questions concerning the costs of the permission applications and any civil restraint order were adjourned.

• High Court (Chancery Division): Permission to appeal the order of District Judge Obodai dated 22 February 2019 was refused. The District Judge’s dismissal of the petition, costs orders and declarations that the applications were totally without merit were left undisturbed.