Insolvency (Amendment) Act (Northern Ireland) 2016

Provisions relating to communication

Attendance at meetings and use of websites

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• (1) In Part 7 of the Insolvency Order, after Article 208 (unenforceability of liens on books, etc.) insert—

(208ZA) (1) This Article applies to— (a) any meeting of the creditors of a company summoned under this Order or the rules; or (b) any meeting of the members or contributories of a company summoned by the office-holder under this Order or the rules, other than a meeting of the members of a company in a members' voluntary winding up. (2) Where the person summoning a meeting (“the convener”) considers it appropriate, the meeting may be conducted and held in such a way that persons who are not present together at the same place may attend it. (3) Where a meeting is conducted and held in the manner referred to in paragraph (2), a person attends the meeting if that person is able toexercise any rights which that person may have to speak and vote at the meeting. (4) For the purposes of this Article— (a) a person is able to exercise the right to speak at a meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting; and (b) a person is able to exercise the right to vote at a meeting when— (i) that person is able to vote, during the meeting, on resolutions put to the vote at the meeting; and (ii) that person's vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting. (5) The convener of a meeting which is to be conducted and held in the manner referred to in paragraph (2) shall make whatever arrangements the convener considers appropriate to— (a) enable those attending the meeting to exercise their rights to speak or vote; and (b) ensure the identification of those attending the meeting and the security of any electronic means used to enable attendance. (6) Where in the reasonable opinion of the convener— (a) a meeting will be attended by persons who will not be present together at the same place, and (b) it is unnecessary or inexpedient to specify a place for the meeting, any requirement under this Order or the rules to specify a place for the meeting may be satisfied by specifying the arrangements the convener proposes to enable persons to exercise their rights to speak or vote. (7) In making the arrangements referred to in paragraph (5) and in forming the opinion referred to in paragraph (6)(b), the convener must have regard to the legitimate interests of the creditors, members or contributories and others attending the meeting in the efficient despatch of the business of the meeting. (8) If— (a) the notice of a meeting does not specify a place for the meeting, (b) the convener is requested in accordance with the rules to specify a place for the meeting, and (c) that request is made— (i) in the case of a meeting of creditors or contributories, by not less than 10 per cent. in value of the creditors or contributories, or (ii) in the case of a meeting of members, by members representing not less than 10 per cent. of the total voting rights of all the members having at the date of the request a right to vote at the meeting, it shall be the duty of the convener to specify a place for the meeting. (9) In this Article, “the office-holder”, in relation to a company, means— (a) its liquidator, provisional liquidator, administrator, or administrative receiver; or (b) where a voluntary arrangement in relation to the company is proposed or has taken effect under Part 2, the nominee or the supervisor of the voluntary arrangement. (208ZB) (1) Where any provision of this Order or the rules requires the office-holder to give, deliver, furnish or send a notice or other document or information to any person, that requirement is satisfied by making the notice, document or information available on a website— (a) in accordance with the rules; and (b) in such circumstances as may be prescribed. (2) In this Article, “the office-holder” means— (a) the liquidator, provisional liquidator, administrator, or administrative receiver of a company; or (b) where a voluntary arrangement in relation to a company is proposed or has taken effect under Part 2, the nominee or the supervisor of the voluntary arrangement.

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• (2) In Part 10 of the Insolvency Order, after Article 345 (formal defects) insert—

(345A) (1) Where— (a) a bankruptcy order is made against an individual or an interim receiver of an individual's property is appointed, or (b) a voluntary arrangement in relation to an individual is proposed or is approved under Chapter 2 of Part 8, this Article applies to any meeting of the individual's creditors summoned under this Order or the rules. (2) Where the person summoning a meeting (“the convener”) considers it appropriate, the meeting may be conducted and held in such a way that persons who are not present together at the same place may attend it. (3) Where a meeting is conducted and held in the manner referred to in paragraph (2), a person attends the meeting if that person is able to exercise any rights which that person may have to speak and vote at the meeting. (4) For the purposes of this Article— (a) a person exercises the right to speak at a meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting; and (b) a person exercises the right to vote at a meeting when— (i) that person is able to vote, during the meeting, on resolutions put to the vote at the meeting; and (ii) that person's vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting. (5) The convener of a meeting which is to be conducted and held in the manner referred to in paragraph (2) shall make whatever arrangements the convener considers appropriate to— (a) enable those attending the meeting to exercise their rights to speak or vote; and (b) ensure the identification of those attending the meeting and the security of any electronic means used to enable attendance. (6) Where in the reasonable opinion of the convener— (a) a meeting will be attended by persons who will not be present together at the same place, and (b) it is unnecessary or inexpedient to specify a place for the meeting, any requirement under this Order or the rules to specify a place for the meeting may be satisfied by specifying the arrangements the convener proposes to enable persons to exercise their rights to speak or vote. (7) In making the arrangements referred to in paragraph (5) and in forming the opinion referred to in paragraph (6)(b), the convener must have regard to the legitimate interests of the creditors and others attending the meeting in the efficient despatch of the business of the meeting. (8) If— (a) the notice of a meeting does not specify a place for the meeting, (b) the convener is requested in accordance with the rules to specify a place for the meeting, and (c) that request is made by not less than 10 per cent. in value of the creditors, it shall be the duty of the convener to specify a place for the meeting. (345B) (1) This Article applies where— (a) a bankruptcy order is made against an individual or an interim receiver of an individual's property is appointed, or (b) a voluntary arrangement in relation to an individual is proposed or is approved under Chapter 2 of Part 8, and “the office-holder” means the official receiver, the trustee in bankruptcy, the interim receiver, the nominee or the supervisor of the voluntary arrangement, as the case may be. (2) Where any provision of this Order or the rules requires the office-holder to give, deliver, furnish or send a notice or other document or information to any person, that requirement is satisfied by making the notice, document or information available on a website— (a) in accordance with the rules; and (b) in such circumstances as may be prescribed.

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References to things in writing

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• (1) After Article 2A of the Insolvency Order (proceedings under EC Regulation: modified definition of property) insert—

(2B) (1) A reference in this Order to a thing in writing includes that thing in electronic form. (2) Paragraph (1) does not apply to the following provisions— (a) Article 97(2) (dissent from arrangement under Article 96); (b) Article 103(1) (definition of inability to pay debts; the statutory demand); (c) Article 186(1) (inability to pay debts: unpaid creditor for £750 or more); (d) Article 187 (inability to pay debts: debt remaining unsatisfied after action brought); and (e) Article 242(1) and (2) (definition of “inability to pay”, etc.; the statutory demand).

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• (2) Paragraph 1(2) of Schedule B1 to the Insolvency Order (interpretation) is repealed.

Requirements relating to meetings

Removal of requirement for annual meetings in a members’ voluntary and a creditors’ voluntary winding up

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• (1) For Article 79 of the Insolvency Order (general company meeting at each year's end) substitute—

(79) (1) Subject to Articles 82 and 88,the liquidator must— (a) for each prescribed period produce a progress report relating to the prescribed matters; and (b) within such period commencing with the end of the period referred to in sub-paragraph (a) as may be prescribed send a copy of the progress report to— (i) the members of the company; and (ii) such other persons as may be prescribed. (2) A liquidator who fails to comply with this Article shall be guilty of an offence.

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• (2) For Article 91 of the Insolvency Order (meetings of company and creditors at each year's end) substitute—

(91) (1) The liquidator must— (a) for each prescribed period produce a progress report relating to the prescribed matters; and (b) within such period commencing with the end of the period referred to in sub-paragraph (a) as may be prescribed send a copy of the progress report to— (i) the members and creditors of the company; and (ii) such other persons as may be prescribed. (2) A liquidator who fails to comply with this Article shall be guilty of an offence.

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• (3) In Schedule 7 to the Insolvency Order (punishment of offences)—

• (a) for the entry relating to Article 79(3) substitute—

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• (b) for the entry relating to Article 91(3) substitute—

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Requirements in relation to meetings under Articles 81 and 84 of the Insolvency Order

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In Articles 81(2)(b)(i) and 84(1)(b)(i) of the Insolvency Order (notice of meeting of creditors), the words “by post” are repealed.

Reports in individual voluntary arrangements

Individual voluntary arrangements: removal of requirement to submit a nominee’s report to the High Court

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• (1) In Article 230A of the Insolvency Order (debtor's proposal and nominee's report)—

• (a) in paragraph (2), for “to the High Court” substitute “ under paragraph (3) ”;

• (b) in paragraph (3), for “report to the Court” substitute “ report to the debtor's creditors ”.

• (2) In Article 231 of the Insolvency Order (summoning of creditors' meeting), for paragraph (1) substitute—

(1) Where it has been reported to the High Court under Article 230 or to the debtor's creditors under Article 230A that a meeting of the debtor's creditors should be summoned, the nominee (or the nominee's replacementunder Article 230(3) or 230A(4)) shall summon that meeting for the time, date and place proposed in the nominee's report unless, in the case of a report to which Article 230 applies, the High Court otherwise directs.

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• (3) In Article 233(2) of the Insolvency Order (report of decisions to court), for “the debtor's proposal” substitute “ a voluntary arrangement proposed under Article 230 ”.

Fast-track voluntary arrangements: notification of the Department

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In Article 237C of the Insolvency Order (result) after “Court” insert “ , and notify the Department, ”.

Powers of liquidator and trustee

Powers of liquidator exercisable with or without sanction in a winding up

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• (1) Schedule 2 to the Insolvency Order is amended as follows.

• (2) In Part 1 (powers exercisable with sanction), paragraph 3 is repealed.

• (3) In Part 3 (powers exercisable without sanction in any winding up), after paragraph 7, insert—

(7A) Power to compromise, on such terms as may be agreed— (a) all calls and liabilities to calls, all debts and liabilities capable of resulting in debts, and all claims (present or future, certain or contingent, ascertained or sounding only in damages) subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and (b) subject to paragraph 2 in Part 1 of this Schedule, all questions in any way relating to or affecting the assets or the winding up of the company, and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect of it.

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Powers of trustee exercisable with or without sanction in a bankruptcy

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• (1) Schedule 3 to the Insolvency Order is amended as follows.

• (2) In Part 1 (powers exercisable with sanction)—

• (a) paragraph 6 is repealed; and

• (b) in paragraph 8, the words “or by the trustee on any person” are repealed.

• (3) In Part 2 (powers exercisable without sanction), after paragraph 10, insert—

(10A) Power to refer to arbitration, or compromise on such terms as may be agreed, any debts, claims or liabilities subsisting or supposed to subsist between the bankrupt and any person who may have incurred any liability to the bankrupt. (10B) Power to make such compromise or other arrangement as may be thought expedient with respect to any claim arising out of or incidental to the bankrupt's estate made or capable of being made by the trustee on any person

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Miscellaneous

Definition of debt

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• (1) The Insolvency Order is amended as follows.

• (2) In Article 2 (general interpretation), for paragraph (3) substitute—

(3) In determining for the purposes of any provision of this Order whether any liability in tort is a bankruptcy debt, the bankrupt is deemed to become subject to that liability by reason of an obligation incurred at the time when the cause of action accrued. (3A) In determining for the purposes of any provision in this Order whether any liability in tort is a debt provable in the winding up of a company or where a company is in administration, that liability is provable if either— (a) the cause of action has accrued— (i) in the case of a winding up which was not immediately preceded by an administration, at the date on which the company went into liquidation; (ii) in the case of a winding up which was immediately preceded by an administration, at the date on which the company entered administration; (iii) in the case of an administration which was not immediately preceded by a winding up, at the date on which the company entered administration; (iv) in the case of an administration which was immediately preceded by a winding up, at the date on which the company went into liquidation; or (b) all the elements necessary to establish the cause of action exist at that date except for actionable damage.

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• (3) In Article 5(1) (interpretation for Parts 2 to 7), in the definition of “debt”—

• (a) for “Article 2(3)” substitute “ Article 2(3A) ”;

• (b) in sub-paragraph (a) for the words from “date” to the end substitute “ relevant date; ”;

• (c) in sub-paragraph (b) for “that date” in the first place it occurs substitute “ the relevant date ”;

• (d) in sub-paragraph (c) for the words from “company” to the end substitute “ relevant date; ”.

• (4) In Article 5, after paragraph (1) insert—

(1A) For the purposes of the definition of “debt” in paragraph (1), “the relevant date” means— (a) in the case of a winding up which was not immediately preceded by an administration, the date on which the company went into liquidation; (b) in the case of a winding up which was immediately preceded by an administration, the date on which the company entered administration; (c) in the case of an administration which was not immediately preceded by a winding up, the date on which the company entered administration; (d) in the case of an administration which was immediately preceded by a winding up, the date on which the company went into liquidation.

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• (5) In Article 347 (the relevant date), after paragraph (6) insert—

(7) Nothing in this Article affects the definition of “the relevant date” in Article 5(1A).

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Treatment of liabilities relating to contracts of employment

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• (1) The Insolvency Order is amended as follows.

• (2) In Article 31 (vacation of office by administrator), as continued in operation by virtue of Article 4(1) of the Insolvency (Northern Ireland) Order 2005 (special administration regimes), paragraph (10) is repealed (what “wages or salary” includes for the purposes of paragraph (9)(a)).

• (3) In Article 54 (receivership: agency and liability for contracts), paragraph (2D) is repealed (what “wages or salary” includes for the purposes of paragraph (2C)(a)).

• (4) In Schedule B1 (administration of companies) in paragraph 100 (vacation of office by administrator: charges and liabilities), sub-paragraph (6)(d) is repealed (what “wages or salary” includes for the purposes of sub-paragraph (5)(c)) but not the “and” following it.

• (5) In Schedule 4 (categories of preferential debt), in paragraph 15 (what “wages or salary” includes for the purposes of determining what is a category 5 preferential debt), paragraph (b) is repealed including the preceding “and”.

Deeds of arrangement

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• (1) Chapter 1 of Part 8 of the Insolvency Order (deeds of arrangement) is repealed.