Key Point

There is no assumption under English law that, where a company appeals against a winding-up order, it should give security for costs.

The Facts

A creditor successfully applied to wind-up a company which had, at one time, been involved in running the Sherlock Holmes Museum. The company was granted permission to appeal, on the basis that the debt was disputed or subject to a cross claim, but before the hearing of the appeal the creditor applied for an order requiring the company to provide security for the creditor’s costs of the appeal.

The Decision

  • The Judge dismissed the creditor’s application. There was not, as the creditor had argued, a general rule that a company that appeals against a winding-up order will be ordered to provide security for costs.
  • The Court has unfettered discretion in relation to security for costs and, on the facts, it was significant that the company’s impecuniosity had been brought about by the creditor not accounting for fee income from the museum.

Comment

The case will be welcomed for clarifying that there is no assumption that, where a company appeals against a winding-up order, it should give security for costs. Old case law has been overtaken and the Courts will consider all circumstances, as they would in a solvent context.

Re The Sherlock Holmes International Society Limited