A development of considerable interest to company law and insolvency law practitioners has arisen in relation to the Court Fees Rules 2009, which were subsequently amended by the Court Fees (Amendment) Rules 2009. Under the amendment rules, among other things, Rule 6 of the principal rules was amended by the addition of Article 6(5), which states that:
"where multiple applications are made under the Companies Law simultaneously in respect of two or more related companies, a Commercial Judge may direct that the applications be treated as consolidated for the purposes of these Rules so that only one set of fees shall be payable."
This amendment has had a particular impact on companies which constitute one part of a number of closely related companies, and in recent months the representatives of such companies have enjoyed some success in arguing for fees consolidation under these circumstances.
The provision in question has a useful application where, throughout the history of their respective winding-up procedures, a group of companies has been treated as one (eg, where pooling agreements or costs and recoveries agreements have been approved by the court).
In considering whether to direct that applications be treated as consolidated for the purpose of the rules so that only one set of fees shall be payable, the court is likely to take into account some or all of the following factors during a winding-up procedure:
- whether the companies concerned can readily afford to pay separate court fees;
- whether maintaining the necessary balance between the interests of the creditors and the interest of the court system is consistent with giving the directions;
- the number of companies involved;
- the length of time that the liquidations have taken;
- the remaining time until the end of the liquidations and how many further applications were contemplated;
- whether to all intents and purposes the liquidations of the companies have been effectively treated as one, including whether there have been any pooling agreements and/or costs and recoveries agreements already approved by this court; and
- whether it can fairly be said that the circumstances are exceptional, so as to justify the giving of the direction sought.
Under Paragraph 8.2 of Practice Direction 1/2010, applications of this nature should be made by letter addressed to the registrar of the Financial Services Division "at the time of filing the originating process".
However, it may well be that in a number of instances the originating process was filed some years ago, and therefore while all applicants would naturally wish to comply with the Practice Direction requirements, they can do so only to the extent that circumstances enable strict compliance. In effect, therefore, some flexibility is likely to be accorded by the commercial judge where this has been the position.
This amendment to the rules provides a welcome and attractive addition to the procedure of the court in its supervision of compulsory winding up, enabling the court to weigh the interests of creditors and the interests of justice against the broad public interest taken as a whole.
For further information on this topic please contact Robin J McMillan at Appleby by telephone (+1 345 814 2067), fax (+1 345 949 4901) or email ([email protected]).