Insolvency Act 1986 s.149 – Debts due from contributory to company

(1)^F336The court may, at any time after making a winding-up order, make an order on any contributory for the time being on the list of contributories to pay, in manner directed by the order, any money due from him (or from the estate of the person who he represents) to the company, exclusive of any money payable by him or the estate by virtue of any call . . . .

(2)The court in making such an order may—

(a)in the case of an unlimited company, allow to the contributory by way of set-off any money due to him or the estate which he represents from the company on any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit, and

(b)in the case of a limited company, make to any director or manager whose liability is unlimited or to his estate the like allowance.

(3)In the case of any company, whether limited or unlimited, when all the creditors are paid in full (together with interest at the official rate) any money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.

Definitions used in section 149 2

contributory: (1) In this Act . . . the expression “contributory” means every person liable to contribute to the assets of a company in the event of its being wound up, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory.
Defined in s.79(1) · see it in the full Act
the company: 2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.
Defined in Sch.4ZZA para.2 · see it in the full Act

Cases considering section 149 3

The Joint Administrators of LB Holdings Intermediate 2 Limited v The Joint Administrators of Lehman Brothers International (Europe) and others

[2017] UKSC 38 · 17 May 2017Interprets

The power to require payment of money due to the company was contrasted with calls under section 150, which produce a statutory fund payable to the liquidator rather than company property. (see para [156])

Taunton Logs Ltd (In Liquidation) & Ors v Cruickshanks & Ors

[2020] EWHC 3480 (Ch) · 17 December 2020

The court recognised a possible summary remedy for debts due from contributories, but did not permit reliance on it because the necessary contributories procedure had not been demonstrated (see paras [50]-[51]).

Lehman Brothers International (Europe) & Ors, Re

[2014] EWHC 704 (Ch) · 14 March 2014

Provides that, once creditors are paid in full with official-rate interest, sums due to a contributory may be set off against a subsequent call. (see para [160])

What each judgment says about section 149 is in the case-law panel in the full Act.

Amendments and notes

2 notes from legislation.gov.uk

Amendments

F336Words in s. 149(1) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(16)} (with art. 10, Sch. 1 para. 84)

Modifications

C426S. 149 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2