- Provisions of the Civil Procedure Rules apply to applications for an extension of time to apply for rescission of winding up order
- Any such extensions of time should be exceptional and for a very short period
Cre8atsea Limited (the Company) was wound up by the court in March 2013 in respect of a petition originally presented in November 2011. The applicant (A) was a director of the Company and applied for an extension of time to enable him to apply to have the winding up order rescinded in May 2015 on the basis that he was both a creditor and contributory and there had been an obvious injustice in making the order.
The court held firstly that, on the evidence, A was neither a creditor nor a contributory and therefore his application failed for lack of standing. In any event, even if A had standing to make the application it would have failed. The Insolvency Rules require an application for rescission to be made within 5 business days of the order – a time limit which is deliberately very short.
The court held that CPR 3.9, which deals with relief from sanctions, applied given that (i) refusal to extend time to apply to rescind the winding up order would result in the order continuing, which would effectively amount to a sanction and (ii) the application to extend time was the first step in initiating litigation. In applying CPR 3.9 the court found that the requirements were not met given the length of the delay and the lack of supporting evidence justifying such delay.
The judgment clarifies that the requirements of CPR 3.9 will apply to an application to extend time for making a rescission application in respect of a winding up order. It is also a reminder that extensions of time will not be granted: (i) without clear supporting evidence of the reason for delay and (ii) for any great length of time.