Insolvency Act 1986, section 215

Proceedings under ss. 213, 214

Part IV Winding Up of Companies Registered under the Companies Acts

(1)On the hearing of an application under section 213 or 214, the liquidator may himself give evidence or call witnesses.

(2)Where under either section the court makes a declaration, it may give such further directions as it thinks proper for giving effect to the declaration; and in particular, the court may—

(a)provide for the liability of any person under the declaration to be a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in a mortgage or charge on assets of the company held by or vested in him, or any person on his behalf, or any person claiming as assignee from or through the person liable or any person acting on his behalf, and

(b)from time to time make such further order as may be necessary for enforcing any charge imposed under this subsection.

(3) For the purposes of subsection (2), “assignee”—

(a)includes a person to whom or in whose favour, by the directions of the person made liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created, but

(b)does not include an assignee for valuable consideration (not including consideration by way of marriage [F460or the formation of a civil partnershipF460] ) given in good faith and without notice of any of the matters on the ground of which the declaration is made.

(4)Where the court makes a declaration under either section in relation to a person who is a creditor of the company, it may direct that the whole or any part of any debt owed by the company to that person and any interest thereon shall rank in priority after all other debts owed by the company and after any interest on those debts.

(5)Sections 213 and 214 have effect notwithstanding that the person concerned may be criminally liable in respect of matters on the ground of which the declaration under the section is to be made.

Definitions used in section 215 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 215 4

Tradition Financial Services Ltd v Bilta (UK) Ltd & Ors

[2023] EWCA Civ 112 · 10 February 2023

The court noted the power to disapply pari passu treatment between the company and a person liable for fraudulent trading, but held that this consequence did not justify narrowing section 213. (see paras [116]–[117])

Bank of India v Morris & Ors

[2005] EWCA Civ 693 · 22 June 2005

Civil declarations under sections 213 and 214 may be made notwithstanding possible criminal liability based on the same matters (see para [103]).

Goldfarb v Higgins & Ors

[2010] EWHC 613 (Ch) · 25 March 2010

The court reserved quantification of the declarations and any further directions concerning the contributions for subsequent submissions under the procedural power in section 215(2). (see para [33])

1 more judgment, and what each says about section 215, are in the case-law panel in the full Act.

Amendments and notes

9 notes from legislation.gov.uk

Amendments

  1. F460Words in s. 215(3)(b) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 112; S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Modifications

  1. C625Ss. 206-215 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. C675S. 215 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2
  3. C676S. 215 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
  4. C677S. 215 applied (with modifications) (S.) (25.2.2009) by The Bank Administration (Scotland) Rules 2009 (S.I. 2009/350), rule 38
  5. C678S. 215 modified (S.) (29.3.2009 at 4.00pm) by The Building Society Special Administration (Scotland) Rules 2009 (S.I. 2009/806), rule 37
  6. C679S. 215 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)
  7. C680S. 215 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)
  8. C681S. 215(1)(2)(4)(5) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3