Recission of Winding-Up Orders: Official Receiver’s Fees?

In HM Revenue and Customs v Direct Affinity Events Ltd and others [2019] EWHC 3063 (Ch), the High Court considered whether the original petitioner should be liable for the administration and general fees due to the Official Receiver upon the Court ordering a winding-up order.

The High Court held that the Official Receiver could retain the full amount of the petitioner’s deposit in respect of the Official Receiver’s fees, however, the Official Receiver was not entitled to claim any further fees in absence of chargeable receipt.

How much is a deposit?

Pursuant to Regulation 2(c) of the Insolvency Proceedings (Fees) Order 2016, a deposit in respect of the Official Receiver’s fees means:

‘on the presentation of a winding up petition, other than a petition presented under section 124A(c) of the Act, the sum of £1,600’

‘on the presentation of a winding-up petition under section 124A of the Act, the sum of £5,000’

Insolvency Proceedings (Fees) Order 2016

What are chargeable receipts?

Pursuant to Regulation 2 of the Insolvency Proceedings (Fees) Order 2016, chargeable receipt means:

‘the sums which are paid into the Insolvency Services Account after deducting any amounts which are paid out to secured creditors or paid out in carrying on the business of the bankrupt or the company’

Insolvency Proceedings (Fees) Order 2016

Does the recission make the winding-up order a nullity?

In this instant case, the Court clarified that the rescission did not nullify the original winding-up order. The Officer Receiver could, therefore, retain the petitioner’s deposit in full regardless of whether the Official Receiver incurred any expenses or time costs.

Only in circumstances where the petition was either withdrawn or dismissed, could the deposit be returned to the petitioner. HM Revenue and Customs v Direct Affinity Events Ltd and others has highlighted that the Court has unfettered discretion to award costs to the Official Receiver and could potentially make costs award against third parties.

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The rules surrounding insolvency are technical and it is unlikely that a someone not versed in personal insolvency laws will achieve a successful outcome. Winding up particularly and insolvency in general is a niche practice area – indeed many solicitors in general practice will rarely have experience in this discipline.

Do not underestimate the severe consequences that winding-up order entails. It is likely that seeking the advice of a specialist insolvency lawyer will be of far more benefit to you than ignoring impending proceedings or seeking to conduct the litigation yourself as a layman.

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We provide a no cost initial case review to establish whether or not we can help you. We are a specialist City of London law firm made up of Solicitors & Barristers and based in the Middle Temple Inn of Court adjacent to the Royal Courts of Justice.  We are experts in dealing with matters surrounding insolvency in particular issues.  Our team have unparalleled experience at serving statutory demands, negotiating with debtors/creditors, setting aside statutory demands and both issuing and defending winding up petitions vigorously at the Royal Courts of Justice (Rolls Building), or the relevant High Court District Registry or County Court with jurisdiction under the Insolvency Rules

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