When is a winding up petition presented?

You might be forgiven for thinking the date of presentation of a petition to a court could not possibly be open to debate. This question has, however, recently taken a trip to the Court of Appeal.

The facts resemble something Shakespeare himself could not have penned.

A debtor applied to the court in Birmingham for an order restraining the presentation of a petition. Between the date that application was lodged and a sealed copy returned, a winding up petition had been lodged in Manchester. The petitioner had paid the court fee on the CE File and placed a cheque in the post for the deposit when the court confirmed it had accepted the filing.Two days later, the petitioning creditor was served with the debtor’s application. The court in Manchester confirmed to the debtor it had not sealed “or issued” the petition and on the back of this, the Birmingham court then ordered the petition was not to be “issued” until after the application to restrain was heard. Two hours before that order was sealed, the court in Manchester received the cheque and sealed the petition. The petition was picked up on a public search and the application to restrain dismissed on the basis it was too late.

In the County Court, and in days pre-dating electronic filing, the court would seal the petition and write the date of presentation in the endorsement section once it received a cheque for the deposit. Winding up petitions presented in the High Court since 2015, and in District Registries since 2019, have had to be presented electronically. The court fee can be paid on the CE portal, but the deposit cannot. To address that, the Insolvency Practice Direction provides that after submission, the petition is marked as private, the creditor asked to pay deposit within seven days, and the petition treated as presented when that is paid. It also says the court should impress two entries on the original petition recording the dates those fees were received.

Reality is often different. The petition will usually only contain a court seal with one date and although the Insolvency Rules require petitions to contain a blank box for the court to complete with the date, time and venue of the hearing, this is more often than not, left blank and information placed beneath the court seal. Also, as happened in this case, the clerk might accept the filing before the deposit is paid. Acceptance is significant – it’s more than the court acknowledging receipt.  

The Court of Appeal dismissed the appeal, holding that whichever way you cut it, the petition been properly presented and so it was too late to restrain presentation. However, it confirmed it was wrong to treat a petition has having been presented when the court received the petition and accepted the filing. The date of presentation was the date both the court fee and deposit had been paid.

It also said the actions of the court staff accepting the filing and communicating that acceptance was unsatisfactory. It recommended that to avoid similar issues arising in future the template petition available on the Court Service website should be revised to refer to a date of presentation, not issue, so that the court can endorse that date on the petition. Also, that the court staff should confirm to a petitioner that it would not accept the filing nor seal the petition until the deposit was paid.

In reference to Company (Number Cr-2024-Bhm-000012), Re [2024] EWCA Civ 1436.

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