Jewelite Trading Ltd v City of Westminster

On an appeal against a winding up order, the appellate court must decide whether the order was wrong or unjust because of a serious procedural irregularity. Service of an order fixing the hearing at a company’s registered office is effective, subject to the ordinary presumption of delivery. A company’s absence does not prevent a winding up order where the judge has considered the evidence and concluded that there is at least some undisputed debt. The court may refuse a further adjournment where the company has had ample time to challenge the debt, has produced no adequate evidence of dispute or solvency, and proposes only an insufficiently documented undertaking. The appeal jurisdiction is distinct from an application to rescind or vary the winding up order under the Insolvency Rules.

Jewelite Trading Ltd appealed against a winding up order made by ICC Judge Prentis on 8 July 2019 in respect of liability orders for non-domestic rates and council tax totalling about £72,000. The petition had been repeatedly adjourned while the company pursued challenges in the magistrates’ court. Those proceedings were withdrawn, and a subsequent judicial review challenge failed.

The company argued that the hearing order had not been validly served and that the judge should have adjourned a directions hearing rather than making a winding up order in the company’s absence. The central issues were whether there had been effective service and whether the order was unjust because of a serious procedural irregularity.

1. The appeal was dismissed and the application for a further adjournment was refused.
2. The order fixing the hearing was validly served by post at the company’s registered office. Under CPR 6.20(2), as applied with the relevant modifications, a company may be served by methods permitted by the rules or by the Companies Act 2006. Service by post at the registered office is adequate under section 1139. The ordinary presumption of delivery was not displaced by evidence of non-receipt. The additional email service did not invalidate the postal service.
3. The appeal had to be determined by asking whether the winding up judge was wrong or whether the decision was unjust because of a serious procedural irregularity. It was not an application to review, rescind or vary the order. That separate jurisdiction was available under rule 12.59 of the Insolvency Rules.
4. It was within the judge’s discretion to make the winding up order despite the company’s absence. The liability orders were several years old, the petition had been adjourned repeatedly, and the company had had ample opportunity to challenge the debt. The evidence before the judge disclosed at least some undisputed debt and did not establish a dispute over the whole debt or sufficient debt to make winding up inappropriate.
5. The court also took account of the absence of evidence of solvency, the lack of further evidence promised earlier, the absence of information from the Official Receiver, and the collective nature of winding up proceedings. A late proposal for an undertaking or guarantee was inadequately documented and did not justify another adjournment.

1. High Court (Chancery Division): appeal against the winding up order dismissed; application for adjournment refused.
2. Companies Court: ICC Judge Prentis made a winding up order on 8 July 2019 after considering the evidence and concluding that at least part of the debt was undisputed.