DG Resources Limited v The Commissioners for HMRC

The service of a winding-up petition is governed exclusively by paragraph 2 of Schedule 4 to the Insolvency Rules 2016. Service under section 1139(1) of the Companies Act 2006 alone is insufficient.

Where a company has a default registered office address, the appropriate method is generally to deposit the petition at or about that office so that it is likely to come to the notice of someone attending it. Irregular service does not automatically make a petition a nullity. The court must exercise a structured discretion, attaching particular weight to the irregularity, scrutinising the explanation and parties’ conduct, and considering all other relevant matters. Serious procedural irregularity, coupled with a materially false case advanced below, may justify striking out the petition despite the absence of a substantive defence.

HMRC presented a winding-up petition against DG Resources Limited for a debt of approximately £1.1 million. Chief ICC Judge Briggs held that the petition had been validly served and, alternatively, declined to strike it out if service had been irregular.

On appeal, HMRC accepted that its process server had not served the petition at Companies House as previously asserted. The appeal concerned whether service at a default registered office address could be effected under section 1139(1) of the Companies Act 2006, how paragraph 2 of Schedule 4 to the Insolvency Rules 2016 applied, and what consequences followed from irregular service.

1. Appeal allowed. The petition had not been regularly served and was ordered to be struck out or removed from the file, requiring HMRC to begin the process again.
2. Paragraph 2 of Schedule 4 to the Insolvency Rules 2016 is a complete and hierarchical code for service of winding-up petitions. The word “must” in paragraph 2(1), together with paragraph 1(1), indicates that service outside the code is invalid. Section 1139(1) of the Companies Act 2006 therefore cannot, by itself, constitute proper service of a petition.
3. At a default registered office, service on a director, officer or employee is generally impossible under paragraph 2(1)(a) or (b). Service under paragraph 2(1)(c) would also ordinarily be unavailable because the default-address regime excludes company presence and imposes no responsibility on Companies House. The proper method is paragraph 2(2): depositing the petition at or about the registered office so that it is likely to come to the notice of someone attending it. Handing the petition to a person at Companies House or to an unrelated third party who undertakes to post it does not comply.
4. Following Robertson v Google LLC and Re Signland Limited, an irregularly served originating process is not inevitably a nullity. The court must attach particular weight to the irregularity, scrutinise the explanation and conduct of the parties, and consider other relevant matters. The court rejected both automatic invalidity and a general presumption that the petition must be set aside.
5. The absence of any genuine dispute or arguable cross-claim weighed against striking out. However, the irregularity was exceptionally serious, and HMRC’s agents had advanced a materially false account of service, unintentionally misleading the court below and obtaining orders in HMRC’s favour. Those circumstances outweighed the absence of a substantive defence.

1. High Court, Chancery Appeals: The appeal from the decision of Chief ICC Judge Briggs was allowed. The petition was held not to have been regularly served and was struck out or removed from the file.