The Insolvent Partnerships (Amendment No. 3) Order (Northern Ireland) 2003

Made

To be laid before Parliament

Coming into operation: 2nd February 2004

The Lord Chancellor, in exercise of the powers conferred upon him by Article 364 of the Insolvency (Northern Ireland) Order 1989[^f00001], and of all other powers enabling him in that behalf, with the concurrence of the Department of Enterprise, Trade and Investment[^f00002], hereby makes the following Order:

Citation and commencement

1

This Order may be cited as the Insolvent Partnerships (Amendment No. 3) Order (Northern Ireland) 2003 and shall come into operation on 2nd February 2004.

Interpretation

2

• (1) In this Order,

• “the Order” means the Insolvency (Northern Ireland) Order 1989,

• “rule” means a rule of the Insolvency Rules (Northern Ireland) 1991[^f00003],

• “the 1995 Order” means the Insolvent Partnerships Order (Northern Ireland) 1995[^f00004].

• (2) In this Order a reference to a “modified Article” means an Article of the Order as modified by, and set out in, the 1995 Order.

Amendment to modified Article 3(3) of the Insolvency (Northern Ireland) Order 1989

3

For Article 3(3)(c) of the Order as modified by Article 14 of the 1995 Order substitute –

(c) where a voluntary arrangement in relation to the insolvent partnership is proposed or approved under Part II, as nominee or supervisor.

Amendment to Article 4 of the Insolvent Partnerships Order (Northern Ireland) 1995

4

For Article 4(1) of the 1995 Order (voluntary arrangement of insolvent partnership) substitute –

(1) The provisions of Part II of, and Schedule Al to, the Order shall apply in relation to an insolvent partnership, certain of those provisions being modified in such manner that, after modification, they are as set out in Schedule 1.

Amendment to Article 19 of the Insolvent Partnerships (Northern Ireland) Order 1995

5

In Article 19(4) of the 1995 Order (supplemental and transitional provisions), after “provision” insert –

• except where paragraph 23 of Schedule Al to the Order, as applied by this Order, has the effect of preventing a petition being so presented

Substitution of Schedule 1 to the Insolvent Partnerships Order (Northern Ireland) 1995

6

For Schedule 1 to the 1995 Order (modified provisions of Part II of the Order) substitute the Schedule set out in Schedule 1 to this Order.

Amendments to Schedule 2 to the Insolvent Partnerships Order (Northern Ireland) 1995

7

• (1) Schedule 2 to the 1995 Order (modified provisions of Part III of the Order) is amended as follows.

• (2) In paragraph 2 (Article 21: power of High Court to make order), after modified Article 21(4) insert –

(5) In this Part a reference to an insolvent partnership includes a reference to an insolvent partnership in relation to which an administration order may be made by virtue of Article 3 of the EC Regulation.

• (3) In paragraph 4 (Article 23: effect of application), after modified Article 23(1)(a) insert –

(aa) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises forming part of the partnership property or let to one or more officers of the partnership in their capacity as such in respect of a failure by the partnership or one or more officers of the partnership to comply with any term or condition of the tenancy of such premises, except with the leave of the High Court and subject to such terms as the Court may impose;

• (4) In paragraph 5 (Article 24: effect of order), after modified Article 24(3)(c) insert –

(ca) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises forming part of the partnership property or let to one or more officers of the partnership in their capacity as such in respect of a failure by the partnership or one or more officers of the partnership to comply with any term or condition of the tenancy of such premises, except with the consent of the administrator or the leave of the High Court and subject (where the Court gives leave) to such terms as the Court may impose;

Amendment to Schedule 3 to the Insolvent Partnerships Order (Northern Ireland) 1995

8

In paragraph 3 of Part I of Schedule 3 to the 1995 Order (Article 185: winding up of unregistered companies), after modified Article 185(7)(c) insert –

(d) at the time at which a moratorium for the insolvent partnership under Article 14A comes to an end, no voluntary arrangement approved under Part II of this Order has effect in relation to the insolvent partnership. (7A) A winding-up petition on the ground set out in Article 185(7)(d) may only be presented by one or more creditors.

Amendment to Schedule 4 to the Insolvent Partnerships (Northern Ireland) Order 1995

9

• (1) Schedule 4 to the 1995 Order (modified provisions of the Order applying for purposes of Article 8) is amended as follows.

• (2) In paragraph 3 of Part I (Article 185: winding up of unregistered companies), for modified Article 185(8) substitute –

(8) The circumstances in which an insolvent partnership may be wound up as an unregistered company are as follows – (a) the partnership is unable to pay its debts, (b) at the time at which a moratorium for the insolvent partnership under Article 14A comes to an end, no voluntary arrangement approved under Part II of this Order has effect in relation to the insolvent partnership.

• (3) In paragraph 6 of Part II (circumstances in which members of insolvent partnerships may be wound up or made bankrupt by the High Court), for modified Article 102 substitute –

(102) A corporate member or former corporate member of an insolvent partnership may be wound up by the High Court if – (a) it is unable to pay its debts, (b) there is a creditor, by assignment or otherwise, to whom the insolvent partnership is indebted and the corporate member or former corporate member is liable in relation to that debt and at the time at which a moratorium for the insolvent partnership under Article 14A comes to an end, no voluntary arrangement approved under Part II of this Order has effect in relation to the insolvent partnership.

• (4) In paragraph 6 of Part II (circumstances in which members of insolvent partnerships may be wound up or made bankrupt by the High Court),

• (a) in modified Article 241(2) after “Subject to”, insert “paragraph (2A) and”,

• (b) after modified Article 241(2) insert –

(2A) A creditor’s petition may be presented to the High Court in respect of a joint debt or debts if at the time at which a moratorium for the insolvent partnership under Article 14A comes to an end, no voluntary arrangement approved under Part II of this Order has effect in relation to the insolvent partnership.

Forms

10

For Forms 5, 6 and 7 contained in Schedule 9 to the 1995 Order substitute Forms 5, 6 and 7 contained in Schedule 2 to this Order.

Transitional provisions

11

• (1) The amendments to the 1995 Order set out in Articles 3, 4, 5, 6, 8, 9 and 10 of, and Schedules 1 and 2 to, this Order do not apply where, in relation to a voluntary arrangement under Part II of the Order, as the case may be, a proposal is made by –

• (a) the members of a partnership and before this Order comes into operation the intended nominee has endorsed a copy of the written notice of the proposal under Rule 1.04(3),

• (b) the liquidator or the administrator (acting as nominee) and before this Order comes into operation the liquidator or administrator (as the case may be) has sent out a notice summoning the meetings under Article 16 of the Order as required by Rule 1.11, or

• (c) the liquidator or the administrator of a partnership (not acting as the nominee) and before this Order comes into operation the intended nominee has endorsed a copy of the written notice of the proposal under Rule 1.12(2).

• (2) The amendments to the 1995 Order set out in Article 7 of this Order do not apply where a petition for an administration order in relation to an insolvent partnership has been presented before this Order comes into operation.

• (3) Where, by virtue of the 1995 Order, provisions of the Order apply in a case falling within paragraph (1) or (2), those provisions shall continue to have effect as if this Order had not been made.

SCHEDULE 1

SCHEDULE 2

Signed

Signed by the authority of the Lord Chancellor

Lord Filkin — Parliamentary Under Secretary of State, — Dated 18th December 2003

The Department of Enterprise, Trade and Investment hereby concurs with the foregoing Order.

Sealed with the Official Seal of the Department of Enterprise, Trade and Investment on 23rd December 2003.

Michael J. Bohill — Senior Officer of the — Department of Enterprise, Trade and Investment

Explanatory note

(This note is not part of the Order.)

This Order amends the Insolvent Partnerships Order (Northern Ireland) 1995 (S.R. 1995 No. 225) (the “1995 Order”).

The following are the main changes made to the 1995 Order:

1 Article 3 makes a change to the definition of the expression “act as insolvency practitioner” in Article 3 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) as modified by Article 14 of the 1995 Order in relation to insolvent partnerships. It provides for acting as a nominee in a voluntary arrangement in relation to an insolvent partnership to be included within that expression.

2 Article 4 amends Article 4(1) of the 1995 Order, the amended Article applies Part II of the Insolvency (Northern Ireland) Order 1989, together with Schedule Al to that Order, to insolvent partnerships. Part II and certain provisions of Schedule Al are set out in modified form in Schedule 1 to this Order. Schedule Al to the Insolvency (Northern Ireland) Order 1989, introduced by the Insolvency (Northern Ireland) Order 2002 (S.I. 2002/3152 (N.I. 6)), provides for a moratorium for small companies in financial difficulty.

3 Article 5 provides that Article 19 of the 1995 Order does not affect the moratorium under paragraph 23 of Schedule Al to the Insolvency (Northern Ireland) Order 1989.

4 Article 6 and Part I of Schedule 1 make amendments to the existing partnership voluntary arrangement (PVA) procedure set out in Schedule 1 to the 1995 Order which is currently applied to insolvent partnerships. The changes made include technical amendments, making it an offence for an officer of a partnership or of a corporate member to make false representations in order to obtain the approval of a voluntary arrangement (for the insolvent partnership or its members). The introduction of this offence brings the existing PVA procedure into line with that provided for companies in the new moratorium procedure introduced by the Insolvency (Northern Ireland) Order 2002. By virtue of the insertion of Article 14A (as modified) into that Schedule it also makes the new moratorium for small companies mentioned above available to insolvent partnerships.

5 Article 7 provides for the expression “partnership” to include a partnership in relation to which an administration order may be made by virtue of the Council Regulation (EC) No. 1346/2000 of 29th May 2000 on insolvency proceedings (a similar provision is included in relation to partnership voluntary arrangements in modified Part II of the Order). It also provides that the amendments made to Articles 23 and 24 of the Insolvency (Northern Ireland) Order 1989 by Article 7 of the Insolvency (Northern Ireland) Order 2002 (which restricts the exercise of the right of peaceable re-entry by landlords or others in relation to property let to a company) are applied (as modified) to partnerships.

6 The Insolvency (Northern Ireland) Order 2002 amended the Insolvency (Northern Ireland) Order 1989 to provide that where a voluntary arrangement does not have effect at the end of the moratorium, creditors of a company may petition for its winding up. Articles 8 and 9 apply this new ground for the making of a winding up order to insolvent partnerships and for the making of winding up orders or bankruptcy orders against their members, as the case may be.

7 Article 10 provides for the replacement of Forms 5, 6 and 7 in the 1995 Order with amended forms. The amendment provides for the new ground for making winding up orders or bankruptcy orders. The new forms are to be found in Schedule 2 to this Order.

8 Article 11 makes transitional provisions for the PVA moratorium procedure and for the exercise of landlord’s rights of re-entry where a partnership is subject to an administration order. The provisions are similar to those provided for companies.

9 The cost to business of compliance with the provisions of the Insolvency (Northern Ireland) Order 2002 is detailed in the Regulatory Impact Assessment prepared for that Order. Copies of the Assessment are available from the Legislation Unit, the Insolvency Service, Fermanagh House, Belfast BT2 8NJ and from the Department’s website @www.detini.gov.uk under “Publications”.

Footnotes

[^f00001]: S.I. 1989/2405 (N.I. 19); Article 364 was amended by regulation 4(3) of S.R. 2002 No. 223

[^f00002]: Formerly the Department of Economic Development; see S.I. 1999/283 (N.I. 1), Art. 3(5)

[^f00003]: S.R. 1991 No. 364; amended by S.R. 1994 No. 26, S.R. 1995 No. 291, S.R. 2000 No. 247, S.R. 2002 No. 261 and S.R. 2003 No. 549

[^f00004]: S.R. 1995 No. 225; amended by S.R. 1996 No. 472, S.R. 2003 No. 144 and S.R. 2003 No. 359

[^f00005]: 2000 c. 8

[^f00006]: 1970 c. 9; section l2AA was inserted by the Finance Act 1994 (c. 9) and was amended by the Finance Act 1995 (c. 4), the Finance Act 1996 (c. 8), the Finance Act 1998 (c. 36) and the Finance Act 2001 (c. 9)

[^f00007]: 1890 c. 39 (53 & 54 Vict) (section 35(a) was repealed by the Mental Health Act 1959 (c. 72), section 149(2) and Schedule 8)

[^f00008]: 2000 c. 8