Parrot Pay Limited (in liquidation) v Goddington Pierce Limited (in provisional liquidation)

The court may permit an issued application to be withdrawn under rule 3.1(2)(m) of the Civil Procedure Rules 1998, subject to appropriate terms, including costs. A company may be wound up where the petitioner establishes standing as a creditor and the statutory requirements for a winding-up order are met, including inability to pay debts. Following a winding-up order, the court may remove the official receiver and appoint other liquidators under the Insolvency Act 1986. Where office-holders face potential conflicts arising from related insolvencies, the court may appoint a conflict liquidator and rely on professional office-holders to seek directions when necessary. Costs of the petition, provisional liquidation and related applications may be treated as expenses of the liquidation under rule 7.108.

Parrot Pay Limited’s liquidators presented a winding-up petition against Goddington Pierce Limited and obtained the appointment of provisional liquidators. Goddington Pierce’s directors later applied to discharge the provisional liquidation and strike out the petition, alleging that the petition debt was disputed.

Before the contested hearing, the discharge application was withdrawn and Goddington Pierce consented to a winding-up order. Parrot Pay also sought removal of the official receiver after the winding-up order and appointment of the existing provisional liquidators, together with a conflict liquidator. The court determined whether the discharge application could be withdrawn, whether the winding-up order should be made, how the liquidators should be appointed, and how the resulting costs should be treated.

1. Withdrawal of application. Rule 3.1(2)(m) of the Civil Procedure Rules 1998 permits the court to take any step or make any order required for case management and furthering the overriding objective. That power is sufficiently wide to permit withdrawal of an application after issue, as well as amendments to an issued application. Permission may be granted on appropriate terms, including costs. The discharge application was therefore permitted to be withdrawn, with costs payable by Goddington Pierce.
2. Winding-up order. The requirements for a winding-up order were satisfied. Parrot Pay could properly be treated as a creditor, whether its claim was characterised as repayment of a loan or as money had and received. The petition debt was effectively unanswerable on the evidence before the court, and there was substantial creditor support. The company was therefore wound up on the ground that it was unable to pay its debts.
3. Appointment of liquidators. Following the winding-up order, the official receiver became liquidator under section 136(2) of the Insolvency Act 1986. The court removed the official receiver under section 172(2) and appointed the existing joint provisional liquidators, together with a conflict liquidator. The absence of a memorandum governing the conflict liquidator’s role did not prevent the order. The court could rely on the office-holders to address conflicts professionally or seek directions.
4. Costs and expenses. The petitioner’s costs of the petition, provisional liquidation and discharge application fell within rule 7.108(4)(h). The expenses of the provisional liquidation and the provisional liquidators’ remuneration were expenses of the liquidation under rule 7.108(4)(a)(i) and (f).