UNADKAT & Co (Accountants) Ltd. v Bhardwaj & Anor

UNADKAT & Co (Accountants) Ltd. v Bhardwaj & Anor

The court has jurisdiction under section 651 Companies Act 1985 to order that the costs of the revival application be treated as expenses of the voluntary winding up, and in the circumstances where the revival led to the recovery of substantial assets for the benefit of creditors, it is just to exercise that discretion in favour of the applicant.

Parties
Claimant: Unadkat & Co (Accountants) Ltd; Defendant: Ashok Bhardwaj; Defendant: The Treasury Solicitor; Liquidator: David Bottomley
Jurisdiction
England and Wales
Judgment Date
11 October 2006
Procedural Posture
Company Restoration and Costs Application / Judgment on Costs Following Restoration and Misfeasance Proceedings
Outcome
Costs application granted in part; costs of revival application and misfeasance proceedings to be treated as expenses of voluntary winding up; permission to appeal granted.
Legal Topics
Restoration of Dissolved Company, Liquidation Expenses, Costs Orders, Priority of Costs, Section 651 Companies Act 1985
Company Law Insolvency Law Restoration of Dissolved Company Liquidation Expenses Costs Orders Priority of Costs Section 651 Companies Act 1985

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Parties

Unadkat & Co (Accountants) Ltd

Claimant

Ashok Bhardwaj

Defendant

The Treasury Solicitor

Defendant

David Bottomley

Liquidator

Procedural Posture

Company Restoration and Costs Application / Judgment on Costs Following Restoration and Misfeasance Proceedings

Legal Issues

  1. 1 Whether the court has jurisdiction to order that costs of revival application be treated as expenses of voluntary winding up
  2. 2 Whether costs incurred by applicant in revival proceedings should be paid by the company and accorded priority
  3. 3 Discretionary exercise of court's power under section 651 Companies Act 1985

Ratio Decidendi

The court has jurisdiction under section 651 Companies Act 1985 to order that the costs of the revival application be treated as expenses of the voluntary winding up, and in the circumstances where the revival led to the recovery of substantial assets for the benefit of creditors, it is just to exercise that discretion in favour of the applicant.

Court Disposition

Costs application granted in part; costs of revival application and misfeasance proceedings to be treated as expenses of voluntary winding up; permission to appeal granted.

Orders

  • Accountants’ costs of the application to revive the company down to the conclusion of the hearing on 29th March 2006 and costs paid to Treasury Solicitor to be paid by Isher and treated as expenses of voluntary winding up.
  • Costs of misfeasance proceedings (summarily assessed at £2000) paid by Accountants on behalf of liquidator to be treated as expenses of voluntary winding up.