Costs of dismissed winding-up petition

Irish Reel Productions Ltd v Capitol Films Ltd [2010] EWHC 180 (Ch), TLR 28 April

An administration on the application of the company might be the last stage in a long process whereby the company came to be subjected to an insolvency process in the interest of the creditors, the earlier stages of which might include the bringing of a winding-up petition, and the prosecution of that petition in the face of dogged resistance by the company itself. The phrase ‘the costs … of any person whose costs are allowed by the court’ in rule 2.12(3) of the Insolvency Rules comprehends not merely that person’s costs of appearing at the hearing of an administration application but that person’s cost of any petition which was dismissed at the same time. The remaining words of rule 2.12(3) then automatically provide for such costs to be payable as an expense of the administration, and fall within the words in rule 2.67(1)(c) ‘the costs of … any person appearing on the hearing of the application’. Accordingly the court had jurisdiction to order that the costs of winding-up proceedings which were dismissed at the time of the making of the administration were nevertheless payable by the administrators.