When is a winding up petition validly presented?

The Court of Appeal held in Re A Company (CR-2024-BHM-000012) [2024] EWCA Civ 1436 that a winding up petition is not validly presented until the deposit for the Official Receiver’s fees has been paid. Practically, this judgment underscores the importance of prompt payment of the official receiver’s fees when filing a petition. Ensuring immediate payment, preferably by phone where time is critical, will avoid delays and ensure the petition is validly presented.

Litigator and insolvency lawyer Helen Rainford explores why this case serves as a timely reminder that in insolvency matters, the smallest procedural missteps can have significant legal and financial consequences.

Elements of presenting a winding up petition

Typically, one may think that there are two elements to the presentation of a winding up petition:

1. The filing of the winding up petition (typically on CE-File) and paying the court filing fee
2. The payment of the Official Receiver’s fees.

However, the court held that the filing of the petition is the act completed by the court and the petition is only presented upon payment of the Official Receiver’s fees.

Why is this relevant?

Under section 129 of the Insolvency Act 1986, the date of presentation represents the date on which the winding up of the company commences. As such, this date may have serious consequences for both for the company and its creditors. From this date:

1. any dispositions of the company’s assets or property are void under section 127 of the Insolvency Act and provides the date from which any Insolvency Practitioner may seek to challenge any transactions entered after this date.
2. the winding up petition will be listed on the court system and could become public knowledge (and is advertised in the London Gazette at a later date in any event). As a result,the company may see their bank accounts frozen, and suppliers may cease delivery.
3. the company will no longer be able to appoint an administrator (if an appointment has previously been in consideration).

Key takeaways

1. Practical takeaway – make payment immediately: Where possible, make payment of the Official Receivers fees (in addition to the court filing fee) as soon as the petition is filed. The Official Receiver’s fee can only be paid by cheque or over the phone. Where time is of the essence, payment over the phone could save time.
2. Legal takeaway – setting a precedent and providing certainty: The court has made it clear when it views a winding up petition to have been presented and as such, any disputes around the presentation will follow the Court of Appeals ruling.

Conclusion

The decision in Re A Company (CR-2024-BHM-000012) provides crucial clarity on the moment of presentation for a winding up petition. By tying the date of presentation to the payment of the Official Receiver’s fees, the Court of Appeal has reinforced the need for procedural precision. For companies and creditors alike, understanding this ruling is vital, as it directly impacts the commencement date of a winding up, the validity of asset dispositions, and potential avenues for insolvency practitioners to challenge transactions.