The Water Industry (Special Administration) Rules 2009

Made: 8th September 2009

Laid before Parliament: 14th September 2009

Coming into force: 1st November 2009

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PART 1 — Introduction

Citation

1

These Rules may be cited as the Water Industry (Special Administration) Rules 2009.

Commencement

2

These Rules come into force on 1st November 2009.

Definitions and interpretation

3

• (1) In these Rules—

• “the Authority” means the Water Services Regulation Authority;

• “business day” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day that is a bank holiday in any part of England and Wales;

• “the CPR” means the Civil Procedure Rules 1998[^f00003] and “CPR” followed by a Part or rule number means the Part or rule with that number in those Rules;

• “court” means the High Court;

• “file” means file in court;

• “Form WAT” followed by a number means the form with that number in the Schedule;

• “the Insolvency Act” means, subject to paragraph (2), the Insolvency Act 1986;

• “proxy” has the meaning given in rule 61;

• “the registrar” means— in the case of proceedings in a district registry of the Chancery Division of the High Court, the district judge; and in any other case, a Registrar in Bankruptcy of the High Court;

• “solicitor” (except in relation to witnessing an affidavit) includes any person who has, under or pursuant to an enactment, the right to conduct litigation in relation to special administration proceedings;

• “special administration order” has the meaning given by section 23 of the Water Industry Act 1991[^f00004];

• “special administration proceedings” means proceedings under sections 23 to 25 of, and Schedule 3 to, the Water Industry Act 1991;

• “special administrator” has the meaning given in paragraph 12 of Schedule 3 to the Water Industry Act 1991;

• “statement of affairs” has the meaning given in section22 of the Insolvency Act;

• “water company” means a relevant undertaker or a qualifying licensed water supplier within the meaning of the Water Industry Act 1991.

• (2) A reference to the Insolvency Act or a provision of that Act is a reference to that Act or provision as applied, substituted or modified by sections 23 to 26 of, and Schedule 3 to, the Water Industry Act 1991, construed in accordance with section 249 of the Enterprise Act 2002[^f00005].

• (3) A reference to the Insolvency Rules 1986[^f00006] is a reference to those Rules as in force immediately before 15th September 2003.

• (4) A reference to the venue for proceedings, for an attendance before the court, or for a meeting, is to the time, date and place for the proceedings, attendance or meeting.

Application: general

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• (1) These Rules apply to special administration proceedings that commence, in relation to a water company, on or after the date on which these Rules come into force.

• (2) For special administration proceedings that commenced before that date, these Rules apply to steps taken in those proceedings on or after that date.

Application of Insolvency Rules 1986

5

• (1) These Rules apply the Insolvency Rules 1986, with modifications.

• (2) Except as provided for in these Rules, nothing in the Insolvency Rules 1986 applies to—

• (a) special administration proceedings commenced, in relation to a water company, on or after the date on which these Rules come into force; or

• (b) any step taken on or after that date in special administration proceedings that commenced before that date.

Forms for use in special administration proceedings

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• (1) The forms in the Schedule must be used in, and in connection with, special administration proceedings.

• (2) A form may be used with any variations that the circumstances require.

PART 2 — The petition and the special administration order

Form of petition

7

• (1) A petition for an order for special administration in relation to a water company must be in Form WAT1.

• (2) The petition must state the petitioner’s name and address for service.

• (3) If the petitioner is the Secretary of State[^f00007], and the water company is a qualifying licensed water supplier (within the meaning of the Water Industry Act 1991) the petition must state that the Secretary of State has consulted the Welsh Ministers before presenting it.

• (4) If the petitioner is the Authority, the petition must state—

• (a) that it is presented with the consent of—

• (i) if the water company is a relevant undertaker (within the meaning of the Water Industry Act 1991) whose area is wholly or mainly in Wales, the Welsh Ministers; or

• (ii) the Secretary of State; and

• (b) if the water company is a qualifying licensed water supplier (within the meaning of the Water Industry Act 1991), that the Secretary of State has consulted the Welsh Ministers before consenting.

• (5) The petition—

• (a) must specify the name and address of the person, or each person, proposed to be appointed as special administrator; and

• (b) must state that, to the best of the petitioner’s knowledge and belief, the person, or each person, proposed is qualified to act as an insolvency practitioner in relation to the water company.

• (6) The petitioner, or another person on the petitioner’s behalf, must prepare and swear an affidavit complying with rule 8.

• (7) There must be exhibited to the affidavit—

• (a) a copy of the petition;

• (b) the proposed special administrator’s written consent, in Form WAT2, to being appointed.

Contents of affidavit

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• (1) The affidavit must state—

• (a) whether the water company that is the subject of the petition is a relevant undertaker or a qualifying licensed water supplier (within the meaning of the Water Industry Act 1991);

• (b) which of the grounds set out in section 24(2) of the Water Industry Act 1991 the petitioner believes are satisfied in relation to the water company; and

• (c) the reasons for that belief.

• (2) The affidavit must contain a statement of the water company’s financial position, setting out (so far as the deponent knows) the assets and liabilities of the company, including contingent and prospective liabilities.

• (3) The affidavit must set out details (to the best of the deponent’s knowledge and belief) of—

• (a) any security held by creditors of the water company; and

• (b) whether any such security gives its holder power to appoint an administrative receiver.

• (4) If the deponent knows or believes that an administrative receiver has been appointed, the affidavit must state that fact.

• (5) The affidavit must contain details (to the best of the deponent’s knowledge and belief) of—

• (a) any petition that has been presented for the winding up of the water company;

• (b) any notice served in accordance with section 26(1)(c) of the Water Industry Act 1991 by any person intending to enforce a security over the water company’s property; and

• (c) any step taken to enforce such a security.

• (6) If there are other matters that, in the opinion of the person intending to present the petition for a special administration order, will assist the court in deciding whether to make such an order, those matters must also be stated in the affidavit.

Filing of petition

9

• (1) The petitioner must file as many copies of the petition and affidavit as are required to be served in accordance with rule 11.

• (2) The court must—

• (a) seal each filed copy; and

• (b) endorse it with the date and time of filing.

• (3) The court must also—

• (a) fix a venue for the hearing of the petition; and

• (b) endorse the details of the venue on each copy of the petition.

• (4) The court must then issue each copy to the petitioner.

Notice to enforcement officer, etc.

10

As soon as reasonably practicable after filing the petition, the petitioner must give notice of its presentation—

• (a) to any enforcement officer or other officer who, to the petitioner’s knowledge, is charged with an execution or other legal process against the water company or its property; and

• (b) to any person who, to the petitioner’s knowledge, has distrained against the water company or its property.

Service of petition

11

• (1) Not less than 2days before the hearing the petitioner must serve on each person specified in paragraph (2)—

• (a) a copy of the petition issued by the court,

• (b) a copy of the affidavit and exhibits in support of it.

• (2) The following must be served—

• (a) the water company;

• (b) any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the water company;

• (c) if an administrative receiver has been appointed, the administrative receiver;

• (d) any person who has applied to the court for an administration order under Part II of the Insolvency Act in relation to the water company;

• (e) if a petition is pending for the winding up of the water company, the petitioner and any provisional liquidator;

• (f) the person, or each person, proposed for appointment as special administrator;

• (g) the Environment Agency;

• (h) the Consumer Council for Water;

• (i) the Chief Inspector of Drinking Water;

• (j) if the petitioner is the Secretary of State, the Welsh Ministers and the Authority;

• (k) if the petitioner is the Welsh Ministers, the Secretary of State and the Authority;

• (l) if the petitioner is the Authority, the Secretary of State and the Welsh Ministers.

• (3) Service is in any way that the court directs or by delivering documents in accordance with the following table.

Person served	Person served	Method of delivery
The water company	The water company	Delivery to its registered office or, if this is not practicable, to its last known principal place of business in England and Wales; any other way permitted by any enactment relating to companies
Any other company	Any other company	Any way permitted by any enactment relating to companies
Any person—	Any person—	The address of an office of the person, if the petitioner knows that the water company maintains a bank account; if the petitioner knows of no such office, the person’s registered office; or if the person has no registered office, the person’s usual or last known address
	who is an authorised deposit taker or a former authorised institution;	The address of an office of the person, if the petitioner knows that the water company maintains a bank account; if the petitioner knows of no such office, the person’s registered office; or if the person has no registered office, the person’s usual or last known address
	who has appointed, or is or may be entitled to appoint, an administrative receiver of the water company, or	The address of an office of the person, if the petitioner knows that the water company maintains a bank account; if the petitioner knows of no such office, the person’s registered office; or if the person has no registered office, the person’s usual or last known address
	who has not notified an address for service	The address of an office of the person, if the petitioner knows that the water company maintains a bank account; if the petitioner knows of no such office, the person’s registered office; or if the person has no registered office, the person’s usual or last known address
Any other person	Any other person	If the person has previously notified an address as the person’s address for service, that address; the address at which the person lives or carries on business; or the person’s usual or last known address

• (4) In the table—

• “authorised deposit taker” means a person who has permission under Part 4 of the Financial Services and Markets Act 2000[^f00008] to accept deposits;

• “former authorised institution” means an institution that— continues to have a liability in respect of a deposit which was held in accordance with the Banking Act 1979[^f00009] or the Banking Act 1987[^f00010]; but is not an authorised deposit taker.

• (5) References in this rule to deposits and their acceptance must be read with—

• (a) section 22 of the Financial Services and Markets Act 2000;

• (b) any relevant order under that section; and

• (c) Schedule 2 to that Act.

Proof of service

12

• (1) The person, or each person, who served the petition and annexed documents must swear and file an affidavit in Form WAT3, specifying the date on which, and the manner in which, service was effected.

• (2) The affidavit of service must be filed as soon as reasonably practicable after service, and in any event not less than one day before the hearing of the petition.

Insolvency proceedings brought after petition presented

13

If after the petition is presented the petitioner becomes aware of any other insolvency proceedings affecting the water company concerned, the petitioner must notify the court in writing of those proceedings.

The hearing: right of appearance

14

At the hearing of the petition, the following may appear or be represented—

• (a) any person on whom the petition was served;

• (b) with the leave of the court, any other person who appears to have an interest justifying the appearance..

Form of special administration order

15

A special administration order must be in Form WAT4.

Costs of petitioner etc.

16

• (1) If the court makes a special administration order, the petitioner’s costs are payable as an expense of the administration.

• (2) The court may direct that the costs of any other person appearing are also payable as an expense of the administration.

Notice and advertisement of special administration order

17

• (1) If the court makes a special administration order the petitioner must, as soon as reasonably practicable, give notice, in Form WAT5, to the person or each person appointed as special administrator.

• (2) The special administrator must, as soon as reasonably practicable, give notice, in FormWAT6, of the making of the order, by advertising—

• (a) in the London Gazette; and

• (b) in such newspaper as the administrator thinks most appropriate for ensuring that the order comes to the notice of the water company’s creditors.

• (3) The special administrator must also, as soon as reasonably practicable—

• (a) give notice, in Form WAT7, of the order to each person (other than the water company) on whom the petition was served; and

• (b) send a sealed copy of that form to the registrar of companies.

• (4) The special administrator must send a sealed copy of the order to whichever of the Secretary of State, the Welsh Ministers and the Authority were not the petitioner.

• (5) The special administrator, when sending to the registrar of companies a copy of the order in accordance with section 21(2) of the Insolvency Act, must also send to the registrar a completed Form WAT8.

• (6) If the court makes any other order, it will give directions as to—

• (a) whom notice of the order is to be given; and

• (b) how that notice is to be given.

Notice of discharge of special administration order

18

If a special administration order is discharged, the special administrator must send a copy of the order effecting the discharge and a completed Form WAT9 to each of the Secretary of State, the Welsh Ministers, the Authority and the registrar of companies.

PART 3 — The special administrator

Special administrator's remuneration

19

• (1) The special administrator is entitled to receive remuneration for work done in acting as special administrator.

• (2) The remuneration is determined either—

• (a) as a percentage of the value of the property with which the special administrator has to deal; or

• (b) by reference to the time properly given by the special administrator and the special administrator’s staff in attending to matters arising in the administration.

Fixing of remuneration by court

20

• (1) The special administrator must apply to the court to rule—

• (a) whether the remuneration will be under rule 19(2)(a) or rule 19 (2)(b), and

• (b) if it is under rule 19(2)(a), the percentage to be applied.

• (2) The special administrator must give at least 14 days’ notice of the application to the following, who may appear or be represented—

• (a) the Authority (whether or not it is the petitioner);

• (b) any creditors that the special administrator knows about.

• (3) In determining the remuneration, the court must have regard to—

• (a) any oral or written representations made by the Authority;

• (b) the complexity (or otherwise) of the case;

• (c) any respects in which, in connection with the water company’s affairs, an exceptional kind or degree of responsibility falls or may fall on the special administrator;