Insolvency Act 1986, section 165

Voluntary winding up

Part IV Winding Up of Companies Registered under the Companies Acts

(1)This section has effect where a company is being wound up voluntarily, but subject to section 166 below in the case of a creditor’s voluntary winding up.

[F344 (2)The liquidator may exercise any of the powers specified in Parts 1 to 3 of Schedule 4.F344]

(4)The liquidator may—

(a)exercise the court’s power of settling a list of contributories (which list is prima facie evidence of the liability of the persons named in it to be contributories),

(b)exercise the court’s power of making calls,

(c)summon general meetings of the company for the purpose of obtaining its sanction by [F345special resolutionF345] or for any other purpose he may think fit.

(5)The liquidator shall pay the company’s debts and adjust the rights of the contributories among themselves.

(6)Where the liquidator in exercise of the powers conferred on him by this Act disposes of any property of the company to a person who is connected with the company (within the meaning of section 249 in Part VII), he shall, if there is for the time being a liquidation committee, give notice to the committee of that exercise of his powers.

Definitions used in section 165 1

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 165 12

Rubin v Coote

[2011] EWCA Civ 106 · 9 February 2011

The court applied the sanction jurisdiction to an objective assessment of whether creditors’ commercial interests were best served by the compromise on its actual terms or by refusing approval. The court’s decision was independent of the liquidator’s view, although informed advice could be given weight. (see paras [22]; [29]-[30]; [41]; [46])

Whitehouse v Wilson & Anor

[2006] EWCA Civ 1688 · 7 December 2006Interprets

Applies the statutory powers framework for a creditors’ voluntary winding up, within which the liquidator’s proposed compromise was analysed. (see paras [17]-[19]) Interprets the sanction requirement as applying to the liquidator’s exercise of the Schedule 4 paragraph 3(b) power to compromise company claims; the application was therefore treated as one for court sanction. (see paras [17]-[19]; [24]; [36]) Interprets the provision as allowing specified Part II and Part III powers to be exercised without sanction, while not preventing a liquidator from seeking directions under section 112. (see paras [17]-[19])

Laurence Pagden & Ors v Mark Robert Fry & Anor

[2024] EWHC 2657 (Ch) · 25 September 2024

Section 165 is treated as confirming that the power to bring proceedings in the company’s name and on its behalf vests in the liquidator. Its operation supports the conclusion that members lack a general power to control litigation (see paras [23]-[24]).

What each judgment says about section 165 is in the case-law panel in the full Act.

Amendments and notes

6 notes from legislation.gov.uk

Amendments

  1. F344S. 165(2) substituted for s. 165(2)(3) (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 120(2), 164(3)(i)(i)
  2. F345Words in s. 165(4)(c) substituted (1.10.2007 with application as noted in Sch. 4 para. 41(2) of the amending S.I.) by The Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/2194), art. 10(1), Sch. 4 para. 41(1)(b) (with art. 12)

Modifications

  1. C452Ss. 163-167 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)
  2. C455S. 165 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2
  3. C456S. 165(2) modified by SI 1994/2421 Sch. 3 para. 8A(1) (as inserted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 7(2) (with reg. 4))
  4. C457S. 165 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3