Application to extend time for rescission dismissed

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2 min read

Sarjanda Ltd (Sarjanda) was a property development company. It entered compulsory liquidation on 29 August 2018. Although not trading at the date of liquidation, the Applicants (Sarjanda and a contributory) believed that Sarjanda had claims against its professional advisors worth c.£600,000. If the claims were successful, Sarjanda may pursue projects in the future.

A rescission application made on 7 September 2018 (two days out of time) was dismissed.The Applicants accepted that Sarjanda’s debts and the liquidator’s costs remained outstanding.

A second rescission application was issued on 25 October 2020. The liquidator did not object to the application and was able to confirm that: all of Sarjanda’s established creditors had been paid; the OR’s fees had been paid and there were funds to pay the liquidator’s fees and expenses; and there were no other matters that required investigation.

Sarjanda argued that the case was exceptional as the debts and costs had been discharged and the delay was explicable (due to illness and COVID-19). HHJ Cooke was not persuaded. The request for an extension of time (from five working days to over two years from the date of liquidation) was extreme. HHJ Cooke drew an express distinction between the personal and corporate insolvency regimes. Whilst a bankruptcy order can be annulled where debts are discharged at a long distance in time after the order, there is no parallel in company insolvency. This is a deliberate policy decision. It would be undesirable to extend the exceptional jurisdiction in circumstances where there was no business to preserve only a possible asset to realise, and future projects could be pursued through a vehicle other than Sarjanda.

Sarjanda Ltd (In Liquidation) v Aluminium Eco Solutions Ltd [2021] EWHC 210 (Ch)

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