Key points

• Where the underlying liability on which a bankruptcy order is made is subsequently set aside, the correct remedy is rescission under s.375(1) of the Insolvency Act 1986.

• Annulment under s.282(1)(a) is the appropriate remedy when, on grounds existing at the time of making the bankruptcy order, the order ought not to have been made.

The facts

Key point

• In certain circumstances the court will look to parallel statutory provisions where existing applicable statute does not accommodate the situation, as long as the latter is not offended, expanded or altered by doing so.

The facts

This application for directions was brought by the administrators of Lehman Brothers Europe Ltd (the “Company”) on:

Key Points

• Statutory powers are to be exercised in accordance with a company’s articles of association
• The Duomatic principle cannot simply be used as a bandage to cure a company’s procedural errors

The Facts

This appeal considered whether the sole director of a company, whose articles required two directors for its board meeting to be quorate, could validly appoint administrators under paragraph 22 Schedule B1 of the Insolvency Act 1986.

Ranolf Company Limited (Ranolf) was created for the sole purpose of acting as a trustee of the Ranolf Trust (Trust). This was the only activity Ranolf performed and its only asset was its right of recourse to the Trust assets under indemnity.

Ranolf was put into liquidation in 2014. Earlier this year, Ranolf brought this proceeding in the High Court seeking various orders to enable it to recourse to the Trust property to meet the claims of its creditors and its liquidators' costs.

In McCollum v Thompson, the Court of Appeal partly quashed the orders of the High Court (previously reported in our March 2016 insolvency update).

The director and shareholders of Rayland Investment Ltd (in liq) (the Company) applied to terminate the Company's liquidation. The Court found it appropriate to make that order. At issue, however, was the remuneration claimed by Mr Norrie, the Company's liquidator, which the Court reduced from $39,128 to $15,559.

Mr Norrie was not entitled to remuneration for unnecessary preliminary steps such as consenting to appointment by affidavit and carrying out property searches.

The case of Hollis & Somerville v Total Debt Solutions (2009) Limited concerned an application by the liquidators of a company for directions that the liquidators could have recourse to all trust monies received by the company to meet their fees and expenses incurred in the liquidation.

The High Court recently granted an application under s 292 Companies Act 1993 to set aside substantial payments made on behalf of Northern Crest Investment Limited (in liquidation) (NCI) to satisfy a debt owed to Robt. Jones Holdings Limited (RJH).

ELT Recycling (NZ) Ltd (ELT) is a company in the business of scrap tyre collection and recycling. The shareholders of ELT had ongoing financial disputes with one of ELT's shareholders, Mr Adams, who was responsible for development of the intellectual property. Adams issued an invoice to ELT as remuneration for his services and when the other shareholders (the Zhang interests) refused to pay, Adams took steps to pass a 'resolution' to liquidate ELT and appoint Mr Imran Kamal as liquidator.

The High Court has recently granted a receiver's application for an order that the grantor company and its sole director deliver up documentation relating to the company's affairs.

Ribble Limited was placed into receivership. The receiver, Mr Whitley, wrote to Ribble's sole director, Mr Kooiman, seeking information necessary to identify collateral secured by a general security agreement (GSA) between Ribble and the secured creditor, under which Mr Whitley was appointed. Mr Kooiman opposed Mr Whitley's application, arguing that: