[3] The personal insolvency equivalent provision, is not a Insolvency Rule 2016 provision, but is section 375(1) of the Insolvency Act 1986 (in Metrocab Limited [2010] EWHC 1317, Philip Marshall QC (sitting as a Deputy Judge of the High Court) described r.7.47 (now r.12.59) and section 375 as 'equivalent provisions' at paragraph 36).

As an aside, it does not assist understanding of insolvency law, to have 'equivalent provisions':

(i) for personal insolvency, appear in the primary statute; but

(ii) for corporate insolvency, appear in a statutory instrument - albeit the main Insolvency Rules statutory instrument. 

Turning to section 375 briefly. Section 375, contained in The Second Group of Parts: Insolvency of Individuals; Bankruptcy Part X Individual Insolvency: General Provisions, is entitled 'Appeals etc. from courts exercising insolvency jurisdiction' and subsection 375(1)reads:

'Every court having jurisdiction for the purposes of the Parts in this Group may review, rescind or vary any order made by it in the exercise of that jurisdiction.'

(its predecessor, section 108(1) of the Bankruptcy Act 1914, read (as originally enacted) 'Every court having jurisdiction in bankruptcy under this Act may review, rescind or vary any order made by it under its bankruptcy jurisdiction.' - s.108(1) is mentioned below)

The other subsections to section 375 are not relevant for present purposes. It can be seen that, broadly speaking, r.12.59 and section 375(1) are structure similarly.

Looking more widely, it should be noted that there is no equivalent provision in corporate insolvency, to the personal insolvency provision section 282(1)(b) of the Insolvency Act 1986.

Section 282(1)(b) of the Insolvency Act 1986 is contained in The Second Group of Parts: Insolvency of Individuals - Bankruptcy Part IX Bankruptcy - Chapter IA Commencement and Duration of Bankruptcy, and section 282 is entitled 'Court’s power to annul bankruptcy order'. Section 282(1)(b) reads:

'(1) The court may annul a bankruptcy order if it at any time appears to the court -

...

(b) that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court.'

Confirming that r.12.59 does not include the equivalent provision to annulment, is the case of Sarjanda Ltd (in liquidation) v Aluminium Eco solutions Ltd [2021] EWHC 210 (Ch) ('Sarjanda'). In Sarjanda, HHJ Cooke, sitting as a Judge of the High Court, declined to expand the scope of r.12.59's exceptional jurisdiction in this way. He reasoned that the legislature had:

(a) for personal insolvency, created a separate provision/power, namely annulment (of the bankruptcy order; equivalent, for present purposes, with the winding up order) for this purpose; whereas

(b) for corporate insolvency, not created a equivalent provision to annulment.

He said, at paragraphs 24 and 25:

'It would be undesirable, in my judgment, to allow the present exceptional jurisdiction to be extended as it would be if an application such as this were allowed. Since creditors can only be paid from funds volunteered by the shareholders, it would be likely to lead to a situation in which the shareholders negotiate directly with the creditors on an individual basis, with the substantial advantage that each creditor can be told he is likely to realise nothing in the liquidation if he does not accept what the shareholder offers.

It may be said that that is in effect what may happen in an application to annul a bankruptcy, where the debtor may rely on third party funding, but it is the legislative policy to allow that, no doubt because of the particular consequences to an individual from his personal bankruptcy. The same does not apply to shareholders who insulate themselves from debts by trading through a limited company which they fail to fund sufficiently to pay debts when due.'

In Fitch v Official Receiver [1996] 1 WLR 242 ('Fitch'), Millett LJ made some observations about how annulment concept/process, is expressly limited and separate, from the jurisdicition created by section 375 (and, since r.12.59 is equivalent, r.12.59 by analogy). It is helpful to set out the whole paragraph (at 246):

'Section 375(1) of the Insolvency Act 1986 reads as follows: “Every court having jurisdiction [in bankruptcy] may review, rescind or vary any order made by it in the exercise of that jurisdiction.” The section replaced sections in identical terms in earlier Bankruptcy Acts: see section 104(1) of the Bankruptcy Act 1883 (46 & 47 Vict. c. 52) and section 108(1) of the Bankruptcy Act 1914. The jurisdiction is unique to insolvency, (having recently been extended from bankruptcy to company winding up), in that it allows the court to review and rescind or vary an order made by a court of co-ordinate jurisdiction. It applies to any order made in the exercise of the bankruptcy jurisdiction. It is available to rescind a bankruptcy order as it was formerly available to rescind a receiving order. The court's power to review and if thought fit rescind a bankruptcy order is, in theory at least, virtually unlimited. It may be contrasted with the power of the court to annul a bankruptcy order under section 282(1) of the Insolvency Act 1986, which replaced section 29 of the Bankruptcy Act 1914. This is limited to two situations: (i) where it appears to the court that, on any grounds existing at the time the order was made, the order ought not to have been made; and (ii) where, since the making of the order, the bankruptcy debts and the expenses of the bankruptcy have been duly paid. Except in this second case, the court's power to annul the bankruptcy order must be based on grounds existing at the time of when the bankruptcy order was made.'

Further, Millett LJ in Fitch expressly disagreed with Russell LJ in Re a debtor (No 12 of 1970) ex p Official Receiver v Debtor [1971] 2 All ER 1494, [1971] 1 WLR 1212 ('No 12 of 1970'), where Russell LJ had sought to limit the meaning of 'exceptional circumstances' (for exercising the jurisdiction created by section 108(1), section 375's predecessor), to circumstances '...closely analogous to the expressly recognised circumstances which enable a bankruptcy to be halted or annulled' (at 248 of No 12 of 1970). Millett LJ in Fitch (at 248):

'The statutory discretion is in terms unlimited. The effect of a rule of law to the effect alleged would be to distort the nature of the inquiry upon which the court ought to embark. That inquiry is whether the circumstances justify the rescission of the bankruptcy order, not whether they are sufficiently close to an informal scheme of arrangement.'

Putting this approach into practice, Millett LJ said, at 249:

'While, therefore, the discretion is still to be exercised with caution and only in exceptional circumstances, we do not accept that those circumstances are limited in the manner alleged. It remains to consider whether the circumstances of the present case are exceptional and if so whether they justify the rescission of the bankruptcy order. In our opinion they are and do.'

See Papanicola v. Humphreys [2005] 2 All ER 418, at paragraphs 15-17, where Laddie J said:

'15. [Millett LJ] ... referred to In re A Debtor (No 12 of 1970) and cited the following passage from the judgment of Russell LJ upon which the respondent relied:

“In our judgment the exceptional circumstances that justify the exercise of the power under section 108(1) to rescind a receiving order and set aside the bankruptcy must be such as are closely analogous to the expressly recognised circumstances which enable a bankruptcy to be halted or annulled.”

16. In refusing to treat this as laying down the general rule, Millett LJ said:

“The statutory discretion is in terms unlimited. The effect of a rule of law to the effect alleged would be to distort the nature of the inquiry upon which the court ought to embark. That inquiry is whether the circumstances justify the rescission of the bankruptcy order, not whether they are sufficiently close to an informal scheme of arrangement.”

17. [Millett LJ] then went on to consider the facts of the case before him. His approach was explained in one short passage:

“While, therefore, the discretion is still to be exercised with caution and only in exceptional circumstances, we do not accept that those circumstances are limited in the manner alleged. It remains to consider whether the circumstances of the present case are exceptional and if so whether they justify the rescission of the bankruptcy order. In our opinion they are and do.” (p 249)'

[4a] While this article is written about the law of England and Wales, for completeness, for Scotland, the section is section 120 of the Insolvency Act 1986.

[4b] Hoffman J in Calmex (1988) 4 BCC 761, said of the former r.7.47, at 762:

‘That power is expressed in completely general terms and in my judgment gives me jurisdiction to rescind the order notwithstanding that it has already been drawn up and, indeed, that proceedings have been stayed. Rule 7.47(4) says that any application for the rescission of a winding-up order shall be made within seven days after the date on which the order was made. This time limit will usually be sufficient to ensure that a rescission order is in fact made before the order has been drawn up. But r. 4.3 gives the court power to extend the time-limit in an appropriate case.’ 

Note: the replacement r.12.59 requires any application to rescind/set aside a winding up order to be ‘…made within five business days…’ rather than ‘…within seven days…’ but the rationale behind the rule, as encapsulated by Hoffman J in Calmex, still holds good.

[5] In Credit Lucky Ltd v National Crime Agency [2014] EWHC 83 (Ch)('Credit Lucky'), Barling J at paragraph 31 was paraphrasing (to some extent) a list set down in Metrocab Limited [2010] EWHC 1317, at paragraph 36, by Mr Philip Marshall QC, sitting as a Deputy High Court Judge. Barling J said, at paragraph 31:

'The principles governing the Court's exercise of its discretion to rescind a winding up order are conveniently listed in the judgment of Mr Philip Marshall QC, sitting as a Deputy High Court Judge, in Metrocab Limited [2010] EWHC 1317 at paragraph 36, in which reference is also made to a number of other relevant authorities, including Re Dollar Land (Feltham) Ltd. (1995) BCC 740, at 748D; Re Piccadilly Property Management Ltd. [1999] 2 BCLC 145; Wilson v. Specter Partnership [2007] BPIR 649, at 658); and Papanicola v. Humphreys [2005] 2 All ER 418, at 424)...'

Taking those references in turn:

(1) In Metrocab Limited [2010] EWHC 1317, Mr Philip Marshall QC, sitting as a Deputy High Court Judge, said at paragraph 36:

'More recent decisions in bankruptcy under the equivalent provisions regarding rescission in section 375 of the Insolvency Act 1986 do provide assistance. Gathering together the authorities on that provision together with those directly related to rule 7.47 as well as the pre-existing power to stay a winding-up order (whilst applying the distinction noted by Judge Colyer QC in Re Piccadilly Property Management Ltd.), the position appears to be as follows:

[i)] The power to rescind is discretionary and is only to be exercised with caution (see Re Dollar Land (Feltham) Ltd, at 748D; Re Piccadilly Property Management Ltd. [1999] 2 BCLC 145 and Wilson v. Specter Partnership [2007] BPIR 649, at 658);

ii) The onus is on the applicant to satisfy the court that it is an appropriate case in which to exercise the discretion (see Papanicola v. Humphreys [2005] 2 All ER 418, at 424);

iii) It will only be an appropriate case where the circumstances are exceptional and the circumstances relied on must involve a material difference from those before the court that made the original order. There is no limit to the factors that may be taken into account and they can include changes that have occurred since the making of the original order and significant facts which, although in existence at the time of the original order, were not brought to the court's attention at that time. Where the new circumstances relied on consist of or include new evidence which could have been made available at the original hearing, that, and any explanation the applicant gives for the failure to produce it then or lack of such explanation, are factors to be taken into account (see Papanicola v. Humphreys, at 424-425; and Mond v. Hammond Suddards [2000] Ch. 40, at 49, a review case, applied in the context of a winding-up rescission application in Re Turnstem Ltd. [2005] 1 BCLC 388);

iv) The circumstances in which the court's power will be exercised will vary but generally, where the rescission application (as here) involves dismissal of the winding-up petition so that the company in question is free to resume trading, the court will wish to be satisfied that:

a) The debt of the petitioning creditor has been paid or will be paid, that the costs of the Official Receiver (or any liquidator appointed) can be paid and that the company is solvent at least on the basis that it can pay its debts as and when they fall due (see Re Dollar Land (Feltham) Ltd., at 748);

b) The application has not been presented in a misleading way and the court is in possession of all material facts and has not been left in doubt (see Re Turnstem Ltd., at 408g);

c) To use the language of Buckley J. in Re Telescriptor Syndicate Ltd. [1903] 2 Ch. 174, at 182, “ all the facts are as I hope they are; that the trading operations of this company have been fair and above board ”

(see Re SN Group Plc [1994] 1 BCLC 319, at 326 and HM Revenue & Customs v. Cassells [2008] EWHC 3180, paragraph 34). The court would therefore generally need to be satisfied that there is nothing that requires investigation of the affairs of the company (see Re Dollar Land (Feltham) Ltd., at 748). In cases such as Re Lowston Ltd. [1991] BCLC 570 (applied in Re Piccadilly Property Management Ltd., at 169) the court has talked of “shady practices”, “unattractive incidents” or dealings of a curious nature which raise suspicion and require investigation...'

(2) In Re Dollar Land (Feltham) Ltd (1995) BCC 740 ('Feltham'), Blackburne J said, at 747-748 (including 748D):

'[counsel for the petitioning creditor] ... submitted that before acceding to an application to rescind a winding-up order, the court must be satisfied in respect of three things: first, that the debt of the petitioning creditor has been paid, or will be paid, when each winding-up order is rescinded; second, that the company is solvent at least on the basis that it can pay its debts as and when they fall due; third, that the official receiver is satisfied from his work that there is nothing that requires investigation of the affairs of the company and that his costs can be paid.

...

In my judgment, whilst accepting that the jurisdiction is one to be exercised with caution, I do not accept that the jurisdiction is properly exercisable only where the full requirements have been satisfied to which [counsel for the petitioning creditor] referred me. I do not accept that the jurisdiction is as narrowly confined as that. I can well see that where the purpose of the rescission application is to secure the dismissal of the winding-up petition, so that the company in question is free to resume trading, the three requirements to which [counsel for the petitioning creditor] refers will ordinarily and possibly invariably have to be satisfied, but that is not the purpose of these applications. Their purpose is not to secure the immediate dismissal of the winding-up petitions, so that the eight companies can continue to trade, but merely to secure a further short adjournment of the petitions to see whether proposals for company voluntary arrangements can be worked up to a state which will enable ... licensed insolvency practitioners, as nominees, to submit a report to the court under s. 2 of the 1986 Act recommending that meetings of the companies' members and creditors be summoned under s. 3.

Inherent in the whole process is that the companies are not solvent, and that the commissioners, as petitioning creditors, have not been and will not be paid in full as a condition of the rescission of the winding-up orders, but will only be paid in accordance with the terms of the voluntary arrangements if approved. For my part I can see no good reason why, if the evidence justifies this course, I should not rescind the winding-up orders and adjourn the eight petitions for the short period that the companies request, and not simply leave it to the liquidators of the companies to bring forward proposals, if they consider it appropriate, at some later stage, assuming by then..the matter has not been overtaken by events which render impractical any possibility of a voluntary arrangement.'

(3) Re Piccadilly Property Management Ltd [1999] 2 BCLC 145, Judge Colyer QC sitting as a judge of the High Court said, at 58 to :

'In my view, there has to be good reason to rescind an order once it is made. A fortiori, when the court itself has been so emphatic as to the appeal. I accept that a distinction falls to be drawn between, on the one hand, post-1986 cases concerning stays, other than those cases where a stay is applied for because it is too late to seek rescission, as would have been the case in Re Lowston Ltd [1991] BCLC 570, to which I shall be referring, and pre-1986 stay cases which have to be examined carefully to see whether after 1986 they would have been or could, if the application had been commenced in a later era, be cases involving review and rescission. I accept therefore that it would be easier today to obtain the review and rescission of a winding-up order than usually it is to obtain a stay, and usually than it was before 1986 to obtain a stay.

But still the jurisdiction to rescind is one which should be exercised with the utmost caution and rarely. Insofar as rescission was wholly confined for practical purposes to applications made before the order was perfected, this point is made loud and clear by Megarry J in his Practice Note (Winding up Order: Rescission) [1971] 1 WLR 4. I accept again that that obviously has to be read in the light of the provisions of the Insolvency Act. Blackburne J himself, who nevertheless did rescind the winding-up order in the Dollar Land (Feltham) case, also uses cautionary language, citing that practice note.

I go so far as to say that, in my view, very cogent reasons need to be demonstrated by an applicant and that there must also be no cogent reasons for not making the order. I do not accept that the observations of Blackburne J in the Dollar Land case are a universal test to be employed in every case, with the effect that wherever it is foreseeable that the creditors might vote in favour of a CVA, therefore there should be rescission and adjournment for preparation of a CVA. I do not accept that they in any way conflict in any event with the propositions set out above.

It will be recalled that Blackburne J was facing somewhat similar proposals, but proposals which were then clad with some of the freshness of originality and not being re-run in relation to the eight Dollar Land subsidiaries which were the subject of the petition which he was considering. He observed, at [1995] BCC 740 at p. 747H:

‘Mr Peacock, supported by Mr Grant for Holmes Building plc, submitted that before acceding to an application to rescind a winding-up order, the court must be satisfied in respect of three things: first, that the debt of the petitioning creditor has been paid, or will be paid, when each winding-up order is rescinded; second, that the company is solvent at least on the basis that it can pay its debts as and when they fall due; third, that the official receiver is satisfied from his work that there is nothing that requires investigation of the affairs of the company and that his costs can be paid.

It was submitted by Mr Peacock that the practice of the court, when rescinding winding-up orders, is akin to its jurisdiction to stay winding-up proceedings pursuant to what is now s.147 of the Insolvency Act 1986. In this connection my attention was drawn to Re Telescriptor Syndicate Ltd [1903] 2 Ch 174 and Re Calgary and Edmonton Land Co Ltd [1975] 1 WLR 355.

I interject that both of those authorities were considered in argument in this case.

‘It was submitted that none of these three requirements is satisfied in these cases, and accordingly that the applications should be dismissed.

My attention was also drawn by Mr Peacock to [the Practice Note (Winding up Order: Rescission) [1971] 1 WLR 4 previously referred to which emphasises a need for exercising the jurisdiction with great caution].’

I resume the quotation at p. 748D:

‘In my judgment, while accepting that the jurisdiction is one to be exercised with caution, I do not accept that the jurisdiction is properly exercisable only where the full requirements have been satisfied to which Mr Peacock referred me. I do not accept that the jurisdiction is as narrowly confined as that. I can well see that where the purpose of the rescission application is to secure the dismissal of the winding-up petition, so that the company in question is free to resume trading, the three requirements to which Mr Peacock refers will ordinarily and possibly invariably have to be satisfied, but that is not the purpose of these applications. Their purpose is not to secure the immediate dismissal of the winding-up petitions, so that the eight companies can continue to trade, but merely to secure a further short adjournment of the petitions to see whether proposals for company voluntary arrangements can be worked up to a state which will enable [the relevant insolvency practitioners] as nominees, to submit a report to the court under s. 2 of the 1986 Act recommending that meetings of the companies' members and creditors be summoned under s. 3.

Inherent in the whole process is that the companies are not solvent, and that the Commissioners, as petitioning creditors, have not been and will not be paid in full as a condition of the rescission of the winding-up orders, but will only be paid in accordance with the terms of voluntary arrangements if approved. For my part I can see no good reason why, if the evidence justifies this course, I should not rescind the winding-up orders and adjourn the eight petitions for the short period that the companies request, and not simply leave it to the liquidators of the companies to bring forward proposals, if they consider it appropriate, at some later stage, assuming by then, contrary to the [insolvency practitioners'] report, that the matter has not been overtaken by events which render impracticable any possibility of a voluntary arrangement.’

Then follow words which, in my view, are distinctly referable to the particular facts then facing the judge, and are not a further statement of universal principle.

‘The question then is whether, on the evidence, it is appropriate for me to accede to the course which the eight companies, together with their parent company, Dollar Land Holdings plc, and supported by the four opposing creditors, invite me to follow. I must, I think, be satisfied on the evidence that there is a real prospect that proposals can be formulated which will command the necessary approvals. In my judgment the evidence does so satisfy me.

...there was the further hurdle to be surmounted by an applicant which I expressed generically as being whether there was any cogent reason for not making the order sought.’ [bold added]

(4) Wilson v. Specter Partnership [2007] BPIR 649, at 658 - see footnote [8b] where Wilson is discussed. 

(5) In Papanicola v Humphreys [2005] 2 All ER 418 ('Papanicola'), Laddie J heard a personal insolvency case involving an application for a rescission order against an order which was not a winding up order (in essence, a determination that certain money was held on trust), such application being made under section 375 of the Insolvency Act 1986 (an 'equivalent provision' - Metrocab Limited [2010] EWHC 1317, at 424, paragraph 36)(formatted into separate paragraph bullet points). Laddie J said, at paragraph 25:

'...a number of propositions can be formulated in relation to s 375....

(1) The section gives the court a wide discretion to review vary or rescind any order made in the exercise of the bankruptcy jurisdiction.

(2) The onus is on the applicant to demonstrate the existence of circumstances which justify exercise of the discretion in his favour.

(3) Those circumstances must be exceptional.

(4) The circumstances relied on must involve a material difference to what was before the court which made the original order. In other words there must be something new to justify the overturning of the original order.

(5) There is no limit to the factors which may be taken into account. They can include, for example, changes which have occurred since the making of the original order and significant facts which, although in existence at the time of the original order, were not brought to the court's attention at that time.

(6) Where the new circumstances relied on consist of or include new evidence which could have been made available at the original hearing, that, and any explanation the applicant gives for the failure to produce it then or any lack of such explanation, are factors which can be taken into account in the exercise of the discretion.'

Though not referred to by Baring J in Credit Lucky, at paragraph 31, it is illuminating to quote other observations made by Laddie J in Papanicola. In Papanicola, Laddie J said:

(1) at paragraphs 26 to 28:

'The second and fourth of these propositions merit some expansion. Inherent in s 375 is the concept that something has changed so that it is appropriate for the court to reconsider its own earlier order. If there is no change in circumstances, the only way to challenge the order is by appeal. The court is not to review its order simply on the basis that the applicant wants to present essentially the same facts and the same arguments but more forcefully or attractively. This is apparent from the following passage in Fitch's case:

'[A]n appellate court can quash a bankruptcy order only if it is satisfied that, on the evidence which was before the court which made the order or on new evidence which is admitted in accordance with the rule in [Ladd v Marshall [1954] 3 All ER 745, [1954] 1 WLR 1489], the order should not have been made. An application under section 375(1) is essentially different. It must be based on a change in circumstances since the order was made or, more rarely, on the discovery of further evidence which could not be adduced on appeal.' (See [1996] 1 WLR 242 at 246.)

The same requirement that there should be something new appears to be inherent in Millett J's judgment in Re a debtor (No 32/SD/1991):

'Where an application is made to the original tribunal to review, rescind or vary an order of its own, however, the question is not whether the original order ought to have been made upon the material then before it but whether that order ought to remain in force in the light either of changed circumstances or in the light of fresh evidence, whether or not it might have been obtained at the time of the original hearing. The matter is one of discretion, and where the evidence might and should have been obtained at the original hearing that will be a factor for the court to take into account; but the rationale of the rule in Ladd v Marshall that there should be an end to litigation and that a litigant is not to be deprived of the fruits of a judgment except on substantial grounds has no bearing in the bankruptcy jurisdiction. The very existence of s 375 is inconsistent with such a rationale.' (See [1993] 2 All ER 991 at 995, [1993] 1 WLR 314 at 318-319.)

This passage supports the sixth proposition set out at [25] above.'

(2) At paragraphs 22 and 23:

'First, the fact that the court has a wide jurisdiction does not throw light on how the jurisdiction should be exercised. In [Fitch v Official Receiver [1996] 1 WLR 242's] case the Court of Appeal noted that the power bestowed on the court by s 375 was 'in theory at least, virtually unlimited', that the 'statutory discretion is in terms unlimited' and that it created an 'absolute discretion' to rescind or vary any of its orders. Nevertheless the court said that the discretion could only be exercised in exceptional circumstances.

Second, there is nothing in the wording of s 375 which suggests that it should be applied in a significantly different way in different cases. The authorities do not support that approach either. Even if Millett J's decision in Re a debtor (No 32/SD/1991) can be construed as suggesting a lower threshold where what is being sought is the rescission of a refusal to set aside a statutory demand, that view does not appear to have commended itself to the Court of Appeal in Fitch's case. Millett J's judgment was cited to the court in Fitch's case yet it held that s 375 applied to 'any order made in the exercise of the bankruptcy jurisdiction' and that it could be applied 'to rescind or vary any of its orders' without distinguishing in any way between them (my emphases).

[6a] The passage Hazel Williamson QC (sitting as a deputy High Court Judge) in Re Thirty-Eight Building Ltd (also known as Simms v Saunders) [2000] BCC 422 ('Thirty-Eight') seems to be referring to in Re a Debtor (No. 32-SD-1991) [1993] 1 WLR 314, is at 319A–C (see 424 of Thirty-Eight).

In Leicester v Stevenson [2003] 2 BCLC 97, the rescission application was refused. Lightman J, having said, at paragraph 15 ‘It is necessary if an application is made to rescind the winding up order to establish that such an order is required to correct an obvious injustice.’ he found, at paragraph 15 that in the case before him, there was ‘…no conceivable requirement of justice ... for any rescission of the winding up order’ where the issue raised by the applicant was whether the debt founding the winding up petition was owed to the petitioning creditor or himself – himself being the creditor would run against compelling evidence the petitioning creditor was indeed the creditor, and the identity of who was the true creditor being a matter to be resolved in the liquidation through admitting or rejecting the inconsistent proof of debts (paragraphs 16 and 11).

See also Reece-v-38 Building Ltd [2000] 1 BCLC, 201–206.

In Re Turnstem Ltd (also known as Bhanderi v Customs and Excise Commissioners) [2004] EWHC 1765 (Ch); [2005] 1 BCLC 388, Lawrence Collins J phrased this as: 'where justice demands that the order be rescinded'. At paragraph 72, Larence Collins J said:

'...there is a discretion to rescind a winding up order. The discretion is not fettered, although normally it will be exercised only where there has been a change in circumstances, or more rarely on the discovery of fresh evidence. I also accept that there may be other exceptional circumstances where justice demands that the order be rescinded.'

In Re Piccadilly Property Management Ltd [1999] 2 BCLC 145, Judge Colyer QC sitting as a judge of the High Court said, at 57:

'I do not accept [counsel for the petitioning creditor HMRC's] contention that an order may be reviewed only if further events have occurred since it was made. It is clearly not the case, and the simplest and clearest example is where, through confusion as to the identity of a company, the winding-up order inadvertently relates to the wrong company. No one has ever suggested in such a case that the company's only remedy is to appeal to the judge.'

[6b] The full passage from Chadwick LJ in Re R S & M Engineering Co Ltd, Mond v Hammond Suddards (a firm) (No 2) [1999] 2 BCLC 485, [2000] Ch 40, is as follows:

'As Hoffmann J pointed out in Re Calmex Ltd, Calmex Ltd v C Lila Ltd [1989] 1 All ER 485 at 486, the power is expressed in completely general terms. But, although I would hold that, as a matter of jurisdiction, the power to review conferred by r 7.47(1) is unfettered, it is, of course, a power which is to be exercised judicially. It would, in my view, be inappropriate - save in the most exceptional circumstances - for a judge to exercise that power in order to substitute his own decision for that of another judge of co-ordinate jurisdiction reached on the same material after a full consideration of the arguments. The power to review is not to be used in order to hear an appeal against a judge of co-ordinate jurisdiction. The exercise of the power should be confined, as a matter of discretion, to cases in which there has been some change in circumstances (which may, perhaps, include the consideration of material which was not previously before the court) since the original order was made - see the observations of Millett J in Re a debtor (No 32/SD/1991) [1993] 2 All ER 991 at 995, [1993] 1 WLR 314 at 318-319' (See [1999] 2 BCLC 485 at 492-93, [2000] Ch 40 at 49.)

The rescission order application, is not just a matter of persuading the judge hearing the application, that the judge that made the original order, was wrong (which is the territory of an appeal). In Papanicola v Humphreys [2005] 2 All ER 418, Laddie J, at paragraph 34, rejected the submission that:

'if you can persuade the court it was wrong the first time round, that automatically triggers the operation of s 375.'

[6c] Indeed, in Papanicola v Humphreys [2005] 2 All ER 418 ('Papanicola'), Laddie J noted that section 375 and r.7.47 (IR 2016, r.12.59's predecessor) are identically worded. Laddie J said, at paragraph 32, about a legal authority:

'That case concerned the scope of r 7.47(1) of the Insolvency Rules 1986, SI 1986/1925 which is in identical words to s 375(1).

Note in respect to Metrocab Limited [2010] EWHC 1317 (Ch), that in some law reports, the full judgment of Philip Marshall QC sitting as a deputy High Court judge on 11.6.11 is not reported. The full judgment is 50 paragraphs long. 

[6d] A similar view was taken in Re Thirty-Eight Building Ltd (also known as Simms v Saunders) [2000] BCC 422, a decision of Hazel Williamson QC (sitting as a deputy High Court Judge). While hearing a application for a rescission order, and after declining to review her original decision/order on the ground a new document discovered showed a different fact (that trustees could operate by majority rule rather than unanimously), the deputy High Court Judge went on to consider whether she should review her original decision/order on the basis of 'further arguments' put forward at the rescission order hearing. At 425, the deputy High Court Judge said:

'As regards the ‘further arguments’, [counsel for the applicant liquidators] accepts that they are additional submissions that (sic) on the same points of law as were canvassed before. He does not urge any exceptional circumstances as to why the applicants should be allowed to advance further arguments, even though he does seek to cite some further authorities. In my judgment the jurisdiction to review is not intended to enable an unsuccessful party to have a second attempt to convince the court of its case, and I would not be prepared to exercise my discretion to entertain the application made in that respect.'

In Atherton v Ogunlende [2003] BPIR 21, a personal insolvency case, Neuberger J said, at 27:

'It seems to me that the principle [that a person cannot go back and reargue points which have been determined against him earlier] ...should not be abrogated simply because the party has found a better way of putting the same point, or wants to put in more evidence to support the same point. If there were evidence from [the debtor] as to specific facts which really would make a difference, and which he was unable to put forward [on a earlier occasion] through no fault of his own (e.g. because it was then unavailable or unknown to him at that hearing) different considerations might apply.'

In Patley Wood Farm LLP v Kicks [2022] EWHC 3257 (Ch), a personal insolvency case, HHJ Paul Mattews (sitting as a judge of the High Court) said, at paragraph 4:

'So far as concerns the jurisdiction under s375, it is clear from the authorities to which I have been referred, in particular the cases of Egleton v IRC [2003] EWHC 1054 (Ch) , Ross v HMRC [2012] EWHC 3355 (Ch) and Harvey v Dunbar Assets plc [2015] Bus LR 1383 , and also the decision of Laddie J in Papanicola v Humphreys [2005] EWHC 335 (Ch), [25] , that essentially this is an exceptional jurisdiction. It is not an alternative to an appeal, and in most cases where you disagree with the directions you should appeal, not try to rescind it. In effect, for the jurisdiction to become available, there has to be some material change in the circumstances which would justify the court re-appraising the situation.'

[6e] In Re Turnstem Ltd (also known as Bhanderi v Customs and Excise Commissioners) [2004] EWHC 1765 (Ch); [2005] 1 BCLC 388, at paragraph 33, Lawrence Collins J said:

'By the Insolvency Rules 1986, rule 7.47(1) 'Every court having jurisdiction under the Act to wind up companies may review, rescind or vary an order made by it in the exercise of that jurisdiction'. The effect of the decisions on this rule (and the equivalent provision in Insolvency Act 1986, section 375(1), for bankruptcy) is that the power is a discretionary one, which should be exercised in normal circumstances only either on the basis of a change of circumstances since the order was made or, more rarely, on the discovery of further evidence which could not be adduced on appeal: Fitch v Official Receiver [1996] 1 WLR 242 at 246 per Millett LJ; Re RS&M Engineering, Mond v Hammond Suddards [2000] Ch 40 at 49-50 per Chadwick LJ; In re a Debtor [1993] 1 WLR 314 at 318 per Millett J; Re Thirty Eight Building Ltd (in liquidation) [2000] 1 BCLC 201 at 206 per Hazel Williamson QC.'

[6f] The full quote from Laddie J in Papanicola - so including the parts of promptness, said obiter, at paragraph 36, is: 

'The power to vary or rescind under s 375 can be exercised whether or not the applicant attended or was represented at the hearing where the original order was made. However where he did not attend and that is said to have contributed significantly to the alleged error in the original order, it is incumbent on the applicant to explain why he did not attend and what steps he took to bring the matter back speedily to court. Were it otherwise, a party intent on delay could decline to attend a hearing and then simply apply for rescission later and at his leisure. Although s 375 is a statutory code relating to insolvency proceedings, it seems to me that when a party seeks the review or rescission of an order made in his absence, the philosophy underlying CPR 39.3(3)-(5) applies. The applicant must explain why he was absent from the earlier hearing and he must apply for rescission promptly, meaning with reasonable celerity. If there is a delay between the original order and the application under s 375, he should explain, if it be the case, that he has acted with reasonable speed.'

[6g] In Re Broadside Colours and Chemicals Ltd (No.2) [2012] EWHC 195 (Ch)('Broadside'), a non-winding up order rescission application, HHJ Brehens (sitting as a judge of the High Court) stated, at paragraphs 26 to 30:

'26 These were insolvency proceedings. Accordingly the right to review the order is governed not by CPR 39.3(5) but by Insolvency Rule 7.47(1) which gives the court power to review, rescind or vary any order made by it in the exercise of its jurisdiction. There is an equivalent power in the case of bankruptcy under section 375(1) of the Insolvency Act 1986 . A comprehensive review of the section 375 mechanism was carried out by Laddie J in Papanicola v Humphreys [2005] 2 AER 418. In paragraph 25 he set out a number of principles:

It seems to me that a number of propositions can be formulated in relation to s 375 . Some of them are derived from the passages cited above. (1) The section gives the court a wide discretion to review vary or rescind any order made in the exercise of the bankruptcy jurisdiction. (2) The onus is on the applicant to demonstrate the existence of circumstances which justify exercise of the discretion in his favour. (3) Those circumstances must be exceptional. (4) The circumstances relied on must involve a material difference to what was before the court which made the original order. In other words there must be something new to justify the overturning of the original order. (5) There is no limit to the factors which may be taken into account. They can include, for example, changes which have occurred since the making of the original order and significant facts which, although in existence at the time of the original order, were not brought to the court's attention at that time. (6) Where the new circumstances relied on consist of or include new evidence which could have been made available at the original hearing, that, and any explanation the applicant gives for the failure to produce it then or any lack of such explanation, are factors which can be taken into account in the exercise of the discretion.

27 In paragraph 37 he considered CPR 39.3:

The power to vary or rescind under s 375 can be exercised whether or not the applicant attended or was represented at the hearing where the original order was made. However where he did not attend and that is said to have contributed significantly to the alleged error in the original order, it is incumbent on the applicant to explain why he did not attend and what steps he took to bring the matter back speedily to court. Were it otherwise, a party intent on delay could decline to attend a hearing and then simply apply for rescission later and at his leisure. Although s 375 is a statutory code relating to insolvency proceedings, it seems to me that when a party seeks the review or rescission of an order made in his absence, the philosophy underlying CPR 39.3(3)-(5) applies. The applicant must explain why he was absent from the earlier hearing and he must apply for rescission promptly, meaning with reasonable celerity. If there is a delay between the original order and the application under s 375 , he should explain, if it be the case, that he has acted with reasonable speed. He has done none of these things here.

28 Thus, whilst it will be seen that CPR 39.3 is relevant and the question of promptness is accordingly relevant it is not a bar to relief under rule 7.47(1) that [former director/applicant] has not acted promptly.

29 To my mind the two most important factors influencing my discretion are first that, as I have held, former director/applicant] does have realistic prospects of success on the merits and second that he had no knowledge of the proceedings at all until September 2011. I accept that he did not act promptly in seeking the order set aside between September 2011 and January 2012 but to my mind this is not fatal. He notified Mr Kelly at the end of September that he knew nothing of the claim and there were without prejudice negotiations between the parties between September 2011 and January 2012. No doubt [former director/applicant] should also have issued this application but it has to be remembered that he was (and is) a litigant in person and was not aware of the need for promptness whilst he was negotiating with the Liquidators.

30 In my view, therefore, even if the proceedings were validly served on [former director/applicant] it is appropriate to set aside the order of 4th May 2011 in so far as it affects J[former director/applicant].'

Broadside was not a winding up order rescission application. Consequently, the very tight deadline for rescission applications for winding up orders, expressed in the rules, did not apply. Therefore, the comments about promptness need to be read with this difference in mind.

[6h] In Duckworth (as liquidator of Truewood Limited) v Parekh (also know as Re Truewood Limited (in liquidation)) [2020] EWHC 2360 (Ch), ICC Judge Jones heard an application to set aside (i.e. to rescind) a debarring order judgment (made on 13.8.14) (which became effective on 10.9.14)(the 'Set Aside Application') within misfeasance proceedings brought by a liquidator of Truewood Limited (the 'Company') under section 212 of the Insolvency Act 1986 (the 's.212 Application')(paragraph 1). The applicants made their Set Aside Application on the basis that the applicants: (a) were not served with the s.212 Application or its evidence (paragraph 2); and (b) became aware on 9.11.16 of: (i) debarring order; and therefore (ii) judgment. The Set Aside Application was made on 18.11.16.

ICC Judge Jones noted, at paragraph 3, that it was accepted between the parties that:

'...Rule 7.47(1) of the Insolvency Rules 1986 ("the Rules") applies to the application which was issued on 22 November 2016. It follows that [counsel for the liquidator/company] is also correct to refer to Rule 7.55. It may be noted that the superseding Insolvency Rules of 2016 do not alter from those of 1986 (see the 2016 Rules, 12.59 and 12.64).'

He continued, at paragraphs 4 to 7:

The power to review and rescind the judgment under Rule 7.47(1) is to be exercised in accordance with the guidance of Mr Justice Laddie in Papanicola v Humphreys [2005] 2 AER 418 at [25] as follows (see also Re Broadside Colours and Chemicals Ltd [2012] EWHC 195 (Ch) at [26-29]):

"(1) The section gives the court a wide discretion to review vary or rescind any order made in the exercise of the bankruptcy jurisdiction. (2) The onus is on the applicant to demonstrate the existence of circumstances which justify exercise of the discretion in his favour. (3) Those circumstances must be exceptional. (4) The circumstances relied on must involve a material difference to what was before the court which made the original order. In other words there must be something new to justify the overturning of the original order. (5) There is no limit to the factors which may be taken into account. They can include, for example, changes which have occurred since the making of the original order and significant facts which, although in existence at the time of the original order, were not brought to the court's attention at that time. (6) Where the new circumstances relied on consist of or include new evidence which could have been made available at the original hearing, that, and any explanation the applicant gives for the failure to produce it then or any lack of such explanation, are factors which can be taken into account in the exercise of the discretion."

5. Mr Justice Laddie also decided that in a case relying upon non-attendance, the applicant should explain:

"why he did not attend and what steps he took to bring the matter back speedily to court … the philosophy underlying CPR 39.3(3)-(5) applies".

That philosophy is based upon the requirements: (i) to act promptly when discovering the judgment; (ii) to have a good reason for not attending the trial; and (iii) to establish a reasonable prospect of success.

6. In addition, applying Rule 7.55:

No insolvency proceedings will be invalidated by any formal defect or any irregularity unless the court before which objection is made considers that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by any order of the court.

7. It is to be noted that under the case management rules of the CPR and under the court's inherent jurisdiction, the Court of Appeal has stated that whilst each case will turn on its facts, it will almost always be just to set aside a judgment which is irregular for want of service. I refer to paragraph [50] of the judgment of the court in Nelson v Clearsprings Ltd [2006] EWCA Civ 1252, [2007] 1 WLR :

"In a case where the proceedings have not been served on the defendant and service has not been dispensed with before judgment, a court could only properly refuse to set aside a judgment where there is no prejudice to the defendant (or, possibly, to some innocent third party who has acted to his detriment in the belief that the judgment was regularly entered). As we see it, that will ordinarily involve the claimant persuading the court that there is no prejudice to the defendant in dispensing with service and that the defendant is not otherwise prejudiced."

ICC Judge Jones then noted the parties respective positions, at paragraphs 8 and 9:

8. [counsel for the applicants] submits that this is plainly a case satisfying those requirements because [the applicants] had no opportunity to defend the claim. They now face a judgment which will result in net proceeds of sale from a property sold by a Law of Property Act 1925 Receiver appointed by another creditor, a mortgagee, being used for the purpose of the company's liquidation instead of being returned to them. Service should have complied with Part 6 of the CPR and did not. It is an irregular judgment and one that causes prejudice and substantial injustice.

9. [counsel for the liquidator/company] submits that the judgment is regular. However, whether it is or not, this application was not made promptly, [applicants] are responsible for the delays which mean that some 4 years have passed since the application was issued. Not only have they no defence with reasonable prospects of success but their delay has prevented the ability to have a trial which would be fair if judgment is set aside.'

The Court then addressed: (1) whether there was good service of the s.212 Application, or not (it was not); (2) whether retrospective authorisation of service should be granted (it should not); (3) absence of an argument raised by the liquidator/company that the requirements of service should be waived (paragraph 36). ICC Judge Jones then said, at paragraph 36:

'...there is good reason to set aside the irregular judgment but subject to considering the application of Rule 7.47(1), the guidance of Mr Justice Laddie in Papanicola v Humphreys (above) and Rule 7.55. This consideration introduces the topic of delay and whether any substantial injustice has been caused. Plainly there is injustice to the extent that a judgment was obtained and can be enforced but not, [counsel for the liquidator/company] submits, if there is no defence.'

Later, at paragraph 46 he said:

'The starting point is that it will normally be just to set aside a judgment in proceedings which have not been served upon the respondent provided prejudice has been caused because there is an arguable defence.'

After considering what defence the applicants' would run, if the Set Aside Application was successful, he found the applicants had 2 arguable defences to the s.212 Application: (i) debt repaid; and (ii) set off against loans (paragraph 65).

On delay, ICC Judge Jones said, at paragraph 64: (1) 'they issued this application quickly after knowing for the first time of the judgment'; (2) delay following issue of the Set Aside Applicatio was not their responsibility; and (3) 'the underlying point is that the delay does not appear to cause difficulties for determining whether there is a defence based upon those loans'

At paragraph 65, the judge acceded to the Set Aside Application, and set aside the (1) debarring order; and (2) judgment.

[6i]In Re Piccadilly Property Management Ltd [1999] 2 BCLC 145 ('Piccadilly'), Judge Colyer QC sitting as a judge of the High Court said, at 63:

'I think that the remarks of Harman J in the Lowston decision here are very much in point. Harman J in Re Lowston Ltd [1991] BCLC 570 -it will be noted that that was a stay case, but it was that type of stay case which is really a disguised review case-observed thus (at p. 573b):

‘In those circumstances it seems to me I must look at the history of this company and see whether there are any shady practices or unattractive incidents which would disable the applicants from having the company restored to their hands. In the Telescriptor case there were dealings which were of an extremely curious nature which led Buckley J, entirely rightly as I would respectfully have thought, to refuse to restore that company to the register in that state.’

On the facts in Piccadilly, on this question and the preceding question about whether the applicant came gave candour and full disclosure, and had been wholly clean with the court, Judge Colyer QC said, at 63-64::

(1) Clean? 'I do not think that these applicants have' (at 63); and

(2) Is there therefore anything here which is suspicious or extremely curious?

'My short answer is yes, and that there are therefore, in my view, compelling reasons of public policy which persuade me that it would be wrong to rescind this winding-up order. The sooner this company is wound up, the better. If the benevolent owners of [the ultimate parent company] really want to help out creditors, and if it really is so easy just to switch funds from one jurisdiction to another, one company to another, then nothing that I am now doing will prevent that from being done. There is nothing to stop [the ultimate parent company] giving its money away to these good causes. The court and the processes of creditors' voluntary arrangements, however, should not be used and manipulated so as to prolong the existence of this highly insolvent company any further. I therefore dismiss the application to review and rescind the winding-up order.' (at 64)

[6j] Lord Greene MR said in Craig v. Kanssen [1943] K.B. 256, at p. 262:

‘… a person who is affected by an order which can properly be described as a nullity is entitled ex debito justitiae to have it set aside … Apart from proper ex parte proceedings, the idea that an order can validly be made against a man who has had no notification of any intention to apply for it has never been adopted in this country. It cannot be maintained that an order which has been made in those circumstances is to be treated as a mere irregularity and not as something which is affected by a fundamental vice.’

Neuberger J in Re Calmex (1988) 4 BCC 761 approved this passage, but he noted that Lord Greene MR was vague as to quite what legal consequences a nullity order actually had. Neuberger J in Calmex said, at 764-765:

'In Craig v. Kanssen, Lord Greene M.R. described an order made in such circumstances as a “nullity”. As I said in Re Intermain Properties Ltd., the word “nullity” can be rather slippery and Lord Greene's reference to the order being “set aside” makes it difficult to know whether he regarded the order as incapable of having any legal consequences whatever.'

before stating 'But I need not explore the meaning of nullity at this level of generality...' (at 764-765)

Note, the issue of what information ought to be retained by Companies House, about an order declared a nullity, was considered in Calmex (see 764 onwards)

The remedy of a declaration of 'nullity', is separate, but stands along side, other remedies of 'r.12.59 rescission order' and 'stay', as potentially available against a winding up order.

[7a] In Metrocab, the deputy High Court Judge explained why he had come to this conclusion, reasoning that the reason for the rescission application, was comparable to the reason for the rescission application in Re Turnstem Ltd (also known as Bhanderi v Customs and Excise Commissioners) [2004] EWHC 1765 (Ch); [2005] 1 BCLC 388. He said, at paragraph 38(iv):

'A comparable situation is that of Re Turnstem Ltd. where a change of mind on the part of the applicant concerning his defence to the petition debt was not considered to be an exceptional case.'

[7b] In Re Turnstem Ltd (also known as Bhanderi v Customs and Excise Commissioners) [2004] EWHC 1765 (Ch); [2005] 1 BCLC 388, Lawrence Collins J dismissed the rescission application (paragraph 81) '...on the basis of settled principles' (paragraph 73), before going through his reasoning - which can be illuminating (though not, it must be said, the particular factual details). He said, in paragraphs 73 to 80 (Mr Bhanderi was at all relevant times Turnstem's sole director and shareholder; he was the rescission order applicant):

'73...First, there has been no change in relevant circumstances. One of the matters originally relied on...has gone since the decision of the Court of Appeal in Arena.'

74. Second, the evidence of the report of the provisional liquidator is that Turnstem is hopelessly insolvent, even apart from the petition debt. It has no assets apart from its holding in Dimestore, which is itself insolvent, and has creditors in excess of £1.5 million...

75. Third, there is no fresh evidence which would alter the basis on which the winding up order was made. Mr Bhanderi had been debarred from adducing any evidence following his failure to serve evidence in answer by March 24, 2003. In any event, there is no such fresh evidence. There is nothing in the witness statement of Mr Bhanderi in the misfeasance proceedings which amounts to new evidence. The evidence of Mr Parsons on the tachographs goes no further than suggesting that some of the lorries may have gone to continental Europe. That is not new evidence of a kind which could justify rescission. There is no reason to doubt the evidence of Mr Braham and Mr Parsons that there was no surveillance of the 27 consignments: I do not consider that the e-mails between the provisional liquidator's staff and his solicitors cast any doubt on the evidence. I do not, for the purposes of this application, take into account the evidence of surveillance of the 5 consignments which were apparently "slaughtered"

76. Fourth, I consider whether there are exceptional circumstances which would justify rescission on the basis that justice required it. If the allegations of partiality and conflict of interest of the provisional liquidator and his solicitors come under this head, I consider that there is nothing in them. The underlying merits of the appeal might come under this head. Mr Paul Girolami QC, for Customs, concentrated on the arguments in relation to the Sarl Rose Water ("Rose Water") consignments. Mr Reza says that this should not of itself be decisive because the assessments are for a comparatively small sum (about £83,000). But in my judgment, if there is a very strong case in relation to the 4 consignments involved, that would shed considerable light on the strength of Customs' case as a whole.

77. Mr Girolami QC's account of the evidence on the Rose Water consignments was this. The duty and VAT attributable to the four assessed loads purportedly purchased by Rose Water and shipped to the bonded warehouse MT Manut in Calais amount to £83,274.61 in total. There is strong evidence the 4 Rose Water consignments did not arrive at MT Manut. Mr Bhanderi says that the total value of goods purchased by Rose Water was £234,268; although knowing virtually nothing about Rose Water and never having dealt with them before, credit was given from the outset and in the full amount of the trade that was done with Rose Water: all the goods were shipped before any payment at all was received.

78. Two payments were made by Rose Water each being a round payment of £100,000, one on February 27, 2002 and the other on March 8, 2002. £00,000 bears no relation to any invoice sum or combination of invoice sums. No payments were ever made by Rose Water into Turnstem's Calais account. The two £100,000 payments were delivered to 31 River Road but not banked either into Turnstem's or Dimestore's account but sent on straightaway to a supplier, Ellbrook Cash and Carry. In fact the 4 consignments did (or may not have) arrived and a dispute arose with Seabrook & Smith about the non-delivery. As a result of that dispute Rose Water withheld payment of £34,268, which was part of the last invoice.

79. It is not for me to decide whether this account is true for the purposes of the present application, and indeed it would be wrong for me to pre-judge the application for summary judgment in the misfeasance proceedings. But having considered carefully the comments of Mr Bhanderi's counsel on Customs' submission, I am satisfied that Customs have a strong case that Mr Bhanderi's version of the giving of credit to Rose Water and the manner and amounts of the payments made by Rose Water are utterly implausible if this is supposed to be genuine commercial trade. The withholding of part of the last invoice by reason of the alleged dispute makes no sense. The last invoice does not relate to the four assessed loads. The last invoice is in the sum of £42,718. The price invoiced in respect of the four assessed loads was £56,534. The reference to the "dispute"; with Seabrook is scant in the extreme and cries out for elaboration. No explanation is attempted as to why only the sum of £34,268 rather than the full sum was withheld. There is no mention of any police involvement or insurance claim in respect of the consignments such as one would expect if the goods had been lost (the combined value of the goods was £56,534).

80. The overall justice of the case is that Mr Bhanderi took, on advice, a deliberate course by which he abandoned resistance to the winding up of an insolvent company in order to concentrate on defending himself against summary judgment in the misfeasance proceedings. He has not satisfied me that the winding up order should be rescinded because he has changed his mind.'

[7c] In Fitch v Official Receiver [1996] 1 WLR 242 at least, the bankrupts tried to rely upon more; the bankrupts applied for a rescission order against their bankruptcy orders. The bankrupts accepted at 1st instance that the bankruptcy orders had been rightly made (at 246) but the bankrupts '...based their applications on the fact that circumstances had changed since the orders were made. They did not rely on the mere fact that the petitioning creditor had changed its mind.'

[7d] To calculate when the deadline set by r.12.59(3) is:

(1) Insolvency Rules 2016 ('IR 2016') provides a definition of 'business days'. In IR 2016, in Part 1 entitled 'Scope, Interpretation, Time and Rules about Documents', in Chapter 2 'Interpretation', there is r.1.2 entitled 'Defined terms', wherein, in r.1.2(2) there is: 

“business day” means, for the purposes of these Rules as they relate to Parts 7A to 10 of the Act (insolvency of individuals; bankruptcy), any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales

(Note: section 251 defines “business day” slightly differently for the purposes of the Insolvency Act 1986 itself - as '“business day” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in any part of Great Britain - so including additionally a day which is a bank holiday in Scotland')

Sealy & Milman: Annotated Guide to the Insolvency Legislation 25th Ed. - 2022 state in their commentary to r.1.2(2):

'The definition... of “business day” ... amended by the Insolvency (England and Wales) (No. 2) (Amendment) Rules 2021 (SI 2021/1028) r.80, Sch.1 paras 1–3 as from 1 October 2021, subject to saving provisions in rr.4, 5.'

(2) As to calculating 5 days, IR 2016, r.1.3 is entitled 'Calculation of time periods' and reads:

'The rules set out in Schedule 5 apply to the calculation of the beginning and end of time periods under these Rules.'

Schedule 5 to IR 2016, is headed 'Calculation of time periods Rule 1.3' and reads (so far as is material):

'1. The rules in CPR 2.8 with the exception of paragraph (4) apply for the calculation of periods expressed in days in the Act and these Rules.'

CPR r.2.8 is entitled 'Time' and reads:

'(1) This rule shows how to calculate any period of time for doing any act which is specified-

(a) by these Rules;

(b) by a practice direction; or

(c) by a judgment or order of the court.

(2) A period of time expressed as a number of days shall be computed as clear days.

(3) In this rule “clear days” means that in computing the number of days-

(a) the day on which the period begins; and

(b) if the end of the period is defined by reference to an event, the day on which that event occurs, are not included.

Examples-

(i) Notice of an application must be served at least 3 days before the hearing.

An application is to be heard on Friday 20 October.

The last date for service is Monday 16 October.

(ii) The court is to fix a date for a hearing.

The hearing must be at least 28 days after the date of notice.

If the court gives notice of the date of the hearing on 1 October, the earliest date for the hearing is 30 October.

(iii) Particulars of claim must be served within 14 days of service of the claim form.

The claim form is served on 2 October.

The last day for service of the particulars of claim is 16 October.

(4) Where the specified period-

(a) is 5 days or less; and

(b) includes-

(i) a Saturday or Sunday; or

(ii) a Bank Holiday, Christmas Day or Good Friday, that day does not count.

Example

Notice of an application must be served at least 3 days before the hearing. An application is to be heard on Monday 20 October.

The last date for service is Tuesday 14 October.

(5) Subject to the provisions of Practice Direction 5C, when the period specified-

(a) by these Rules or a practice direction; or

(b) by any judgment or court order,

for doing any act at the court office ends on a day on which the office is closed, that act shall be in time if done on the next day on which the court office is open.'

(3) time starts to run from the date the winding up order is made. 

Note for completeness, and as addressed in the main body of the article, the Court has the general power to extend this deadline. 

[8a] The Insolvency Rules 2016 ('IR 2016') expressly state that the provisions of CPR rule 3.1(2)(a) (the court’s general powers of management) apply so as to enable the court to extend or shorten the time for compliance with anything required or authorised to be done by these Rules.

IR 2016, r.1.3 is entitled 'Calculation of time periods' and reads:

'The rules set out in Schedule 5 apply to the calculation of the beginning and end of time periods under these Rules.'

Schedule 5 to IR 2016, is headed 'Calculation of time periods Rule 1.3' and r.1.3(3) and (4) read:

'3. The provisions of CPR rule 3.1(2)(a) (the court’s general powers of management) apply so as to enable the court to extend or shorten the time for compliance with anything required or authorised to be done by these Rules.

4. Paragraph 3 is subject to any time limits expressly stated in the Act and to any specific powers in the Act or these Rules to extend or shorten the time for compliance.'

The Court therefore has a general power to extend this 'five business days' deadline. 

For those interested in legal history, prior to introduction of the Insolvency Rules 2016, it was the Insolvency Rules 1986 ('IR 1986') that applied. When IR 1986 governed, the power to extend the time for applying for a rescission order was contained in IR 1986, r.4.3., entitled 'Time-limits'. IR 1986, r.4.3 (now obsolete) read:

'Where by any provision of the Act or the Rules about winding up, the time for doing anything is limited, the court may extend the time, either before or after it has expired, on such terms, if any, as it thinks just.' [latest version. in force 6.4.10 to 5.4.17]

[8b] Also Wilson v Specter Partnership [2007] EWHC 133 (Ch); [2007] BPIR 649 ('Wilson'). In Wilson, on 18.7.05, a firm of solicitors ('Specter') presented a winding up petition against a Company ('WP')(paragraph 1), based on a petition debt of unpaid fees for professional services arising under a contract ('the Contract'). WP served a opposition documents, taking a number of points in opposition (paragraph 3), including the inflation of the bill, invoicing for non-existent work and breach of duty (paragraph 3). The first hearing on the petition was listed for 18.7.05. Nobody from WP, in particular, WP's director (also a creditor) attended on 18.7.05, apparently being on holiday (paragraph 3), and the winding up order was made. On 9.9.05, WP's obtained a copy of the Contract (paragraph 4), whereupon, WP's director complained that the costs of the Specter were outside an estimate given in the Contract's terms. On or about 23.2.06 (c.7 months after the winding up order), an rescission application was made. Following an amendment, the rescission application specified its main ground for rescission, '...namely that the petition debt arose on a contentious business agreement (“CBA”) within the meaning of s 59 of the Solicitors' Act 1974 so that there could be no petition until a court had ruled on enforcement under s 61.' (paragraph 1). See paragraph 19 for others - ruled 'too late to take' at paragraph 20.

At first instance, a DJ dismissed the rescission application (paragraph 8), holding that: (1) the Contract was not a CBA; and (2) even the Contract had been a CBA, he would not grant an extension of time under IR 1986, r.7.47(4) for bringing the rescission application, finding that '...there was nothing in the facts of the case before him which justified the exercise of that jurisdiction' (paragraph 8).  WP's director appealed, and the appeal came before Mann J.

Mann J held that for different reasons, the Contract was not a CBA (paragraphs 15 to 18); accordingly, WP's director's central argument failed (paragraph 18) and the appeal failed.

But, importantly for present purposes, Mann J went to say that: (1) his decision on CBA point meant it was '...unnecessary to consider the question of delay in applying to rescind on that basis.' (paragraph 21); (2) but '...in case I am wrong on that, and in any event to deal with other possible attacks on the petition debt, I express a view on delay'

Speaking obiter therefore, Mann J said, at paragraphs 22 to 24:

'The provisions of Insolvency Rules rule 7.47(4) have the effect that an application to rescind a winding up order must be made within seven days, but the district judge rightly held that there was a discretion to extend that time in an appropriate case. [Counsel for WP's director] submitted that this was an appropriate case and that the district judge was wrong to hold that it was not. He also submitted that the district judge misdirected himself by holding that he could not take account of any matters which the company could have brought to the attention of the court at the date of the petition and that he was confined to considering new matters which had come to light since the date of the winding up order.

The first point to observe is that the district judge acknowledged, correctly, that the jurisdiction to set aside had to be cautiously exercised, and particularly in the case of a winding up order. The second is that the error that is said to have been made by him is not apparent in the section of his judgment dealing with this point. While he does refer to the need only to take post-judgment matters into account in the following section, dealing with the alleged inherent jurisdiction, he does not do so in connection with rule 7.47. He notes that the directors said that they could not do anything to challenge the order until they had a copy of the letter in question, and did not believe they could displace the order because of a lack of evidence of the arrangement. He went on to observe that he could see nothing in the correspondence which would take this case out of the ordinary and justify a delay of seven months in making the application to rescind. I can see nothing wrong in the reasoning thus expressed. He obviously did not accept that the directors could not have applied earlier, and there is plenty of material for saying that. If their points of attack on the petition debt irrespective of the CBA point were good, they could have taken them immediately on the making of the order. Indeed there is an e-mail of the very next day avowing an intention to appeal, and various other threats followed. On 9 August 2005 Mr Specter of Specter wrote to a director of Wilson referring to an offer to settle for £10,000, and indicating a willingness to co-operate in setting aside the winding up order. It ended by telling him that he needed to act quickly. Wilson did not do so. Nor did the directors act when they obtained a copy of the letter of September 2004 on 9 September 2005. [Counsel for WP's director] says that the period between then and when the application was launched was explained, at least in part, by the directors indulging in an effort to get more evidence, though he did accept that that effort might well have been misplaced. In my view it was. If the directors had wished to say that the winding up order ought not to have been made then there was no reason why they should not have applied promptly. Even if one assumes that the CBA point was a good one, and that they cannot have known about it until they got a copy of the agreement in September 2005, there was still a very large delay between then and when the point was finally taken. There is no good explanation for the delay. In my view, it is not only the case that the district judge below was entitled to reach the decision that he did on the evidence, it is a decision that was entirely correct and I would have reached (and do reach) the same decision.

[Counsel for WP's director] urged on me that if the fees were due under a CBA then the petition and winding up order were a nullity and could not be allowed to stand no matter what the delay was. In this respect he relied heavily on Mann v Goldstein [1968] 1 WLR 1091 and Re Calmex Ltd [1989] 1 All ER 485. I do not consider that he is right about this. It may be that it could have originally been argued that the debt was disputed, but that does not make the proceedings and order a nullity. It means that there was a point that could have been taken. The order having been made, it cannot now be taken. Even if the CBA point were good it does not make the proceedings a nullity, and does not make the order a nullity either. An order is an order until it is rescinded or otherwise set aside. A winding up order is in the same position. The court in question had jurisdiction to make it. There is jurisdiction to set it aside, but there are time limits. The company failed to observe those time limits so the order stands. This point therefore fails too.'

Pausing there, it can be noted that: (1) the delay between winding up order (18.7.05) and rescission application (23.2.06), of c.7 months - was not justified; and (2) the delay between receipt of the Contract (letter/agreement) (9.9.05) and rescission application (23.2.06), c.5.5 months, was described as a 'very large delay' (paragraph 23)

Then, under the heading 'The Inherent Jurisdiction', Mann J in Wilson said, at paragraphs 25 and 26:

'This was advanced as a separate basis for setting aside the order. The district judge considered it, and while doubting that the jurisdiction existed he dealt with it on the facts. It was in this context that he suggested that he could only take post-winding up events into account, relying on Papanicola v Humphreys [2005] EWHC 335 (Laddie J) as authority for that. I agree that at para 25 of his judgment in that case Laddie J accepted that an application to rescind could be made on the basis of facts existing at the time of the first order but which were not known to the court, and that to that extent the district judge erred. However, that error is immaterial. In my view there are two short answers to this point. First, there is no inherent jurisdiction to do what Wilson are asking should be done. Once an order has been drawn up the jurisdiction to set it aside is limited. It can be set aside, for example, on the footing that it was obtained by fraud, but that sort of point does not arise here. It can be set aside pursuant to statute or statutory instrument – rule 4.74 is the relevant jurisdiction here. There are other bases. But there is no general jurisdiction to set aside of the kind invoked by Wilson. The second answer is that even if there were, the unjustifiable delay in applying would be as fatal to the exercise of this jurisdiction as it is in relation to the jurisdiction under rule 7.47.

This ground of appeal therefore fails too.'

[9] In Metrocab Limited [2010] EWHC 1317, Mr. Philip Marshall QC (sitting as a Deputy Judge of the High Court) said that the issue of whether to grant an extension of time for the rescission applications, had become 'academic', since he had concluded he would dismiss the rescission applications on the merits. However, he set out his views on granting an extension of time, obiter. He said, at paragraph 13:

'In this case I have heard full submissions on the substantive merits of each application and, for the reasons set out below, have concluded that they should be dismissed. It follows that whether any extension of time should be granted or not is academic. However, having heard full submissions on the point and in case the matter goes further, I set out below my conclusions on the applications for an extension of time.'

[10] In Metrocab Limited [2010] EWHC 1317 ('Metrocab'), Mr. Philip Marshall QC (sitting as a deputy High Court Judge) said, at paragraphs 14 and 15:

'In Sayers v. Clarke Walker [2002] 1 WLR 3095, Lord Justice Brooke (with whom the other members of the Court of Appeal agreed), explained at 3100, in the context of an application for permission to appeal out of time, that in a case of any complexity the “check list” in CPR rule 3.9, concerning relief from sanctions, should be applied. The rationale is that, given the applicant has not complied with a time limit in the court rules, if the court is unwilling to grant him relief from his failure to comply through an extension of time, the consequence would be that the order of the lower court would stand and he could not appeal it. Even though this was not a sanction expressly “imposed” by the rule, the consequence would be exactly the same as if it had been

“and it would be far better for courts to follow the check-list contained in CPR r 3.9 on this occasion, too, than for judges to make their own check-lists for cases where sanctions are implied and not expressly imposed”.

In my judgment this analysis is equally applicable in the context of an application for an extension of time such as that made by the Applicants in this case. Although the application is made under the Insolvency Rules, rule 7.51 of those rules applies the practice and procedure of the High Court (except so far as inconsistent with the provisions of the Insolvency Rules ). If the Applicants are unsuccessful in obtaining an extension of time the consequence will be that the winding-up orders will stand. The consequence will accordingly be the same as if rule 7.47 of the 1986 Rules imposed a sanction for not making an application within the seven day period provided for.'

Pausing there. The deputy High Court Judge then goes through the factors set out in CPR r.3.9, as it was then drafted.

[11] In Metrocab Limited [2010] EWHC 1317 ('Metrocab'), Mr. Philip Marshall QC (sitting as a deputy High Court Judge) went through the factors set out in CPR r.3.9, as it was then drafted. However, since then (2010), CPR r.3.9 has been amended. CPR r.3.9 is entitled 'Relief from sanctions' and now reads:

'(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need-

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders.

(2) An application for relief must be supported by evidence.'

Whereas, CPR r.3.9(1) used to read (2010):

'On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including-(a) the interests of the administration of justice; (b) whether the application for relief has been made promptly; (c) whether the failure to comply was intentional; (d) whether there is a good explanation for the failure; (e) the extent to which the party in default has complied with other rules, practice directions and court orders… (f) whether the failure to comply was caused by the party or his legal representative; (g) whether the trial date or the likely date can still be met if relief is granted; (h) the effect which the failure to comply had on each party; and (i) the effect which the granting of relief would have on each party.'

While these factors will still be relevant, as they are not stated in r.3.9, there is an issue of their importance now. With that caveat, it is still illuminating to analyse how the deputy High Court Judge in Metrocab went through the factors.

After quoting the (2010) r.3.9 factors (except (g)), at paragraph 16, he then said he would '...take each factor in turn' (paragraph 16). He said in Metrocab, at paragraphs 17 to 23:

'17. Factor (a): The interests of the administration of justice require any application for rescission of a winding-up order to be made promptly. As reflected in a practice note published in [1974] 1 WLR 4, in connection with applications to rescind, a winding-up order affects all creditors of the company and gives the Official Receiver authority to act immediately. Without the requirement for a prompt application a considerable degree of uncertainty would arise for creditors and the Official Receiver and any liquidator thereafter appointed. The importance of complying with the time scale set down by rule 7.47 therefore has a particular importance and led Mr. Justice Lightman in Leicester v. Stevenson [2003] 2 BCLC 97, at 100f, to conclude that any extension of time must be justified and strictly justified if the extension is to cover any substantial period.

18. [counsel for the Applicants] suggested that the fact that undisputed debts of Metrocab and FNT can be discharged and that both companies could continue to trade are appropriate matters to consider under this heading. In my judgment, however, they fall more properly to be considered as part of the substantive merits of the application...

19. Factor (b): In this case the applications for an extension of time were made nearly four months late in the case of Metrocab and some three and half months late in the case of FNT. In the context of the short time limit of seven days set by the legislation these periods of delay are significant. In this regard it is notable that in Wilson v. Specter Partnership [2007] BPIR 650, at 659, Mr. Justice Mann described a delay of about four and half months between the point at which an application to rescind could have been mounted and the date on which it was actually launched as “a very large delay”.

20. The delay is particularly striking in a case such as this in which the making of the winding-up order was well known to the Applicants and was only made after multiple adjournments (the Metrocab petition having come on for hearing on 4 February 2009, 4 May 2009 and 13 and 20 May 2009 and that relating to FNT having come on for hearing on 13 May 2009 and 24 June 2009). Where a winding-up order has been made without the knowledge of the applicant or where he has only had a short period in which to respond the court will naturally be much more sympathetic (see Re Calmex (1988) 4 BCC 761 and Re Virgo Systems Ltd (1989) 5 BCC 833, at 834G).

21. Factor (c): It was accepted by [counsel for the Applicants] that the failure to comply in the case of both Metrocab and FNT was intentional.

22. Factor (d): In this case the only evidence of the Applicants specifically addressing the reasons for the delay are the two initial witness statements of Mr. Siddiqi dated 9 October 2009, his fourth witness statement dated 31 December 2009 in the Metrocab proceedings and his third witness statement of the same date in the FNT proceedings.

23. In his initial statement concerning Metrocab Mr. Siddiqi gives three reasons for delay:

“(i) third party funds needed to be arranged which has been difficult under current economic climate, (ii) negotiations with Sibson have been necessary, in order to obtain access to records and files and to seek a mutually acceptable arrangement with the lease of the premises, and (iii) a new strategic plan has had to be put in place”.'

In paragraph 24, the deputy High Court Judge sets out why the first two of these are 'unconvincing' (paragraph 24(i) and (ii)) and why he is 'unimpressed by the further suggestion that a new strategic plan had to be put in place before an application could be made.' (paragraph 24 (iii))

The deputy High Court continued, at paragraph 25:

'25. In his first statement in the FNT proceedings Mr. Siddiqi gives two reasons for delay

“(i) third party funds needed to be arranged and (ii) a contractual arrangement to provide engineering services to an associated company, which was dependent on its success in securing a contract to produce hybrid demonstrator passenger cars”. The first of these points I have already considered above. On the second matter, the evidence is once again unconvincing...'

He then concluded, at paragraph 26:

'26. In the circumstances I am not satisfied that there is any good explanation for the failure to comply with the prescribed timescale for an application for rescission.'

He then addressed factors (e) to (i) inclusive, from paragraphs 27 to 31:

'27. Factor (e): Beyond the late service of the witness statement of Mr. Chia, which I do not consider to be a significant matter in this context, no breaches of other rules or practice directions or court orders has occurred on the part of the Applicants.

28. Factor (f): There has been no suggestion that the delay in making the applications was the fault of the Applicants' legal representatives as opposed to that of the Applicants themselves.

29. Factor (g): This is not relevant.

30. Factor (h): It seems to me that the main effect of the failure to comply has been the added period of uncertainty thereby created for creditors and the joint liquidators in respect of the status of Metrocab and FNT. Although the joint liquidators have carried out some work, in particular in reporting to the court on the financial position and other matters affecting the solvency of each company, in accordance with an order of Mr. Registrar Simmonds dated 21 October 2009 (apparently relating to both companies although I have only seen an order relating to Metrocab), the Registrar requested that the work carried out should be proportionate. In their reports the joint liquidators have indicated that further work could have been done. If the applications were unsuccessful the period for a fuller investigation would have been delayed. If the applications were successful costs would have been incurred unnecessarily. Although the Applicants have agreed to pay the joint liquidators' reasonable costs they have concerns over the level of those costs and reserve the right to have them assessed. This then creates the prospect of further expenditure being incurred on a contested assessment not all of which may be recoverable.

31. Factor (i): The effect of the granting of relief to the Applicants would of course be to allow them to have their applications determined. It has not been suggested that the grant of an extension of time would cause further prejudice to the respondents or creditors generally beyond that set out above.'

As is noted in the main body of the article, at paragraph 32, the deputy High Court Judge refused the extensions of time needed. He concluded that the '...balance comes down against the grant of an extension of time.' and that, 'Of particular significance in this regard is that the delay was intentional and without any proper justification.' (paragraph 32)

[12] In Leicester v Stevenson [2002] EWHC 2831 (Ch); [2003] 2 BCLC 97, the winding up order was made 14.3.97 and the rescission application was made on 20.7.00, over 3 years later (paragraph 2). Lightman J said,

'There seems to me to be no conceivable justification, let alone any proper excuse, for that delay.'

[13] For completeness, the only relevant section of the Practice Direction (Ch D: Insolvency Proceedings), [2020] BCC 698 is paragraph 9.10, entitled Rescission of a winding-up order'. Setting out the whole of paragraph 9.10, it reads:

'9.10. Rescission of a winding-up order

9.10.1 A request to rescind a winding-up order must be made by application.

9.10.2 The application must be made within five business days after the date on which the order was made, failing which it should include an application to extend time pursuant to Sch.5 to the Insolvency Rules . Notice of any such application must be given to the petitioning creditor, any supporting or opposing creditor, any incumbent insolvency practitioner and the official receiver.

9.10.3 An application to rescind will only be entertained if made by a (a) creditor, or (b) contributory, or (c) by the company jointly with a creditor or with a contributory. The application must be supported by a witness statement which should include details of assets and liabilities and (where appropriate) reasons for any failure to apply within five business days.

9.10.4 In the case of an unsuccessful application, the costs of the petitioning creditor, any supporting or opposing creditor, any incumbent insolvency practitioner and the official receiver will normally be ordered to be paid by the creditor or the contributory making or joining in the application. The reason for this is that if the costs of an unsuccessful application are made payable by the company, those costs will inevitably fall on the general body of creditors.'

[14] The Insolvency Act 1986, section 147 is entitled 'Power to stay or sist winding up' and reads:

'(1) The court may at any time after an order for winding up, on the application either of the liquidator or the official receiver or any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in the winding up ought to be stayed or sisted, make an order staying or sisting the proceedings, either altogether or for a limited time, on such terms and conditions as the court thinks fit.

(2) The court may, before making an order, require the official receiver to furnish to it a report with respect to any facts or matters which are in his opinion relevant to the application.

(3) A copy of every order made under this section shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the registrar of companies, who shall enter it in his records relating to the company.'

The word 'sist' is only relevant for Scotland. 

For the principles on which the court will grant or refuse a stay, see (1) Re Lowston Ltd [1991] BCLC 570; and (2) McGruther v James Scott Ltd 2004 SC 514.

In Metrocab Limited [2010] EWHC 1317, Philip Marshall QC (sitting as a Deputy Judge of the High Court) said, at paragraphs 33 to 35:

'33. Rule 7.47(1) of the Insolvency Rules 1986 provides that:

“Every court having jurisdiction under the Act to wind up companies may review, rescind or vary an order made by it in the exercise of that jurisdiction”.

34. Until this rule came into force a winding-up order could not be rescinded. The winding-up proceedings could only be stayed (see Re Intermain Properties Ltd. (1985) 1 BCC 99 ,555 and Re Calmex Ltd., supra at 762). By contrast a provision for rescission had existed under the pre-existing bankruptcy legislation (see section 108(1) of the Bankruptcy Act 1914).

35. It might have been thought that the principles applicable in the context of applications for a stay of winding-up and under prior bankruptcy legislation would provide some relevant guidance for the exercise of the court's power under rule 7.47. However:

i) As noted by Judge Colyer QC (sitting as a Judge of the High Court) in Re Piccadilly Property Management Ltd. [1999] 2 BCLC 145, at 163:

“…a distinction falls to be drawn between, on the one hand, post-1986 cases concerning stays, other than those cases where a stay is applied for because it is too late to seek rescission, as would have been the case in Re Lowston [1991] BCLC 570, to which I shall be referring, and pre-1986 stay cases which have to be examined carefully to see whether after 1986 they would have been or could, if the application had been commenced in a later era, be cases involving review and rescission. I accept therefore that it would be easier today to obtain the review and rescission of a winding-up order than usually it is to obtain a stay, and usually than it was before 1986 to obtain a stay”; and

ii) As Peter Gibson J. in Re Virgo Systems Ltd., supra , at 834, explained, in bankruptcy under the old legislation, the court had regard to the principles on which the court would annul an adjudication under section 29 of the 1914 Act and that does not provide a safe guide for the exercise of the court's discretion in relation to companies.'

A stay order in respect to a winding up order, automatically releases the Official Receiver from his/her duty to report to creditors and contributories of the company  - see Insolvency Rules 2016, r.7.48(5). But note, the stay order may, as well as the stay, include such requirements upon the Official Receiver as the court thinks just, to bring the stay to the notice of the company's creditors and contributories - see Insolvency Rules 2016, r.7.51