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5 Hearing the Petition and Making the Order

From: Applications to Wind up Companies (4th Edition)

Derek French
Edited By: Stuart Sime

Content type:
Book content
Product:
Financial Law [FBL]
Published in print:
25 March 2021
ISBN:
9780198869726

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

(p. 325) 5  Hearing the Petition and Making the Order

(p. 327) Judge

Judicial Nature of Decision

5.01  The power to make a winding-up order under IA 1986 is a judicial rather than an executive power,1 just like the power to make a bankruptcy order2 or a debt relief order.3 According to Gaudron J, the proceedings are:4

essentially judicial in the sense that they usually involve parties . . . and invariably require proof of factual matters by application of the rules of evidence in proceedings conducted in accordance with judicial procedures. Moreover, the power to order the winding up of a company . . . is exercised by ‘the application of legal principles to proved states of fact and not upon considerations of policy or expediency’.5

5.02  Winding up by the court involves a determination of a civil right within the meaning of the European Convention on Human Rights, art 6(1) (right to a fair trial).6

Judge

5.03  A winding-up petition is normally heard by an Insolvency and Companies Court (ICC) judge or a district judge.

Management with Related Proceedings

5.04  Proceedings for winding up or administration have sometimes been heard together with related proceedings in the Chancery Division. For an example see Interoil Trading v Watford Petroleum,7 which concerned a petition for relief of unfairly prejudicial conduct of the company’s affairs and Re Toys “R” Us Properties (UK) Ltd,8 which concerned an administration application. The judgment in Re R A Noble and Sons (Clothing) Ltd9 deals with both a contributory’s winding-up petition and a claim against the company.

5.05  In practice it will rarely, if ever, be appropriate to hamper the progress of a creditor’s petition for the winding up of a company by joining it to other proceedings which are not insolvency proceedings: the winding-up proceedings concern the company and all of its members and creditors and should be dealt with quickly,10 whereas other proceedings are likely to involve (p. 328) only the company and a small number of other parties.11 It is, though, not uncommon for a winding-up petition presented against a company to be adjourned pending the hearing of an administration application concerning the same company.

5.06  Consolidation