The Bankruptcy and Companies Master has now issued updated guidance as at 1st September 2023 on arrangements for listing Creditor’s bankruptcy and winding up petitions. This is part of the ongoing transition from the restrictions which protected debtors and prevented enforcement during and shortly after the Covid-19 pandemic.
Whilst most of the new guidance consists of procedural instructions to practitioners, the following key changes have been made which are worth noting for both practitioners and clients alike:
- Each petition will be heard in a specific time slot, so the number of petitions that may be heard at any time will be reduced compared to pre-pandemic bulk in-person hearings.
- The Bankruptcy Court continues to embrace the model of remote/hybrid hearings where appropriate, applying the “interests of justice” test in light of all the circumstances of the case.
- New applications will generally be considered on paper initially, and parties must not attend Court unless directed to do so.
- Final orders in all cases will only be made on foot of petitions where the Master is satisfied that either the parties have agreed such an order, or that it is right and just in all the circumstances to do so. If the Master has any concerns whatsoever about prejudice and the fairness of the process, she will simply adjourn the case.
- The Court has the power to impose procedural penalties and costs sanctions where appropriate e.g. failure to adhere to (a) the rules of court, (b) previous directions from the Master or (c) the protocol for creditor’s winding up and bankruptcy petitions.
The new criteria for creditors’ bankruptcy petitions should also be followed until further notice (apart from HMRC petitions):
- The debt is grounded on a court judgment, decree or other similar court order and must accompany the petition; AND
- The petition is grounded on a statutory demand dated and served on or after 1st June 2022.
This is also the case for creditors’ winding up petitions:
- The petition is in the new form contained within the provisions of The Insolvency (Amendment) Rules (Northern Ireland) 2023; AND
- The debt arises from a court judgment, decree or other court similar court order and must accompany the petition; AND
- The petition is grounded on a formal demand made on or after 13 March 2023.
All petitions will be checked by court staff when presented and any that do not comply with the above criteria will not be accepted.
This article is only a summary of the key points raised in the updated guidance and is therefore not prescriptive. The full guidance note from the Master can be found here
Should you require any advice in relation to a debt recovery matter and the specific process involved, please do not hesitate to contact Jan Cunningham, Caroline Prunty, Emma Rooney or Sarah Livingstone in our Commercial Disputes team