Case No: 4501 of 1996 
Neutral Citation Number: [2005] EWHC 1440 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
The Strand
London WC2A

Date: Wednesday, 4 May 2005

B e f o r e:

MR JUSTICE LINDSAY

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IPE JACOB & ANR - 
Joint Provisional Liquidators of UIC INSURANCE COMPANY LIMITED

CLAIMANT

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EQUITAS LIMITED
DEFENDANT

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MR TAMLYN appeared on behalf of the Claimant 

MISS HILLIARD appeared on behalf of the Defendant

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JUDGMENT

MR JUSTICE LINDSAY:   
1.	I have before me an ordinary application under rule 7.2 (it appears to be undated in my copy) made in the matter of UIC Insurance Company Limited, (Provisional Liquidators appointed) and the Insolvency Act 1986 between Equitas Limited (representative of various syndicates who were creditors of the above-named company) and respondents Mr Jacob and Mr Nigel Ruddock, joint provisional liquidators of the above named company.  The relief that is sought by Equitas is an order that the respondents do furnish the applicant with a list of the creditors of UIC Insurance Co Ltd and the amounts of their respective debts, excluding Lloyds Syndicates represented by Equitas Ltd and/or London and Overseas Insurance Company, within seven days of the date of the order, and an order for costs.
2.	The reason given for such relief is because the joint provisional liquidators of UIC Insurance Company are required to do so, it is said, pursuant to rule 12.17 of the Insolvency Rules 1986 and have failed to comply with a request made by Equitas Limited.  Alternatively, the court should require the joint provisional liquidators as officers of the court to provide a list of creditors to Equitas Limited.
3.	Those reasons given, that follow the word “because”, really require consideration of three different routes which are sought to be used by Miss Hilliard on behalf of Equitas for the list of creditors.  The first is rule 12.17.  The second is another route that may be opened by way of ordering the joint provisional liquidators to have, amongst their functions, the delivery up of such a list and the third is a suggested route of the joint provisional liquidators, as officers of the court (without necessarily bolstering that with any particular statutory or rule provision, merely as officers of the court) being ordered to do what is sought.  So there are three routes to the desired end.  Mr Tamlyn on behalf of the joint provisional liquidators resists all of them. 
4.	This is an extremely unusual provisional liquidation.  On 12 August 1996 the directors of UIC Insurance Company presented a petition based on their own resolution for the winding up of the company.  It was a winding up sought under section 122(1)(f) on the ground that the company was unable to pay its debts and was insolvent.  That 1996 petition has been adjourned time after time and is still an adjourned winding up petition.  No order has been made on it in substance.  On the same day, I think it was, 12 August 1996, the court was moved before Walker J for the appointment of a provisional liquidator and provisional liquidators were appointed.  The present provisional liquidators are Mr Jacob, who was then appointed in 1996, and Mr Ruddock, who succeeded Mr Cooper, who had been appointed in 1996.  It is accepted that in their role as joint provisional liquidators they are, indeed, officers of the court.  
5.	Equitas represents some 40 per cent in value, I am told, of such of the creditors of the company as are intended to be these creditors, called scheme creditors, to be within a hoped-for scheme of arrangement.  The scheme of arrangement, I think, has not, even now, been formulated in detail, though no doubt a great deal of work has gone into what form it should take when ultimately it is presented.  I should have added that the unusual position of having a provisional liquidation that began in 1996 and is still merely a provisional liquidation, has been engendered because at that time, in 1996, administration as a process was not available for insurance companies.  That was not a possibility until 2002.  The position, then, has been that, as a convenient way of having an interregnum under which the affairs of the company should be properly managed and administered, whilst a scheme of arrangement or other solution was sought, the provisional liquidation machinery was adopted as it seemed the best at the time.  The reason why it was best at the time, as I say, was that administration was not then possible.
6.	There is an informal committee of creditors, referred to as the ICC, that has a number of members, as one would expect, and Equitas is one of those members.  Obviously as representing a considerable body of creditors it is an obvious candidate for membership of that committee.  But Equitas has doubts -- whether they are well-founded or not is no business of mine at this stage -- as to the manner in which the provisional liquidation has been conducted and as to the remuneration drawn and to be drawn by the provisional liquidators.  There is -- and again this is not a matter immediately for my concern -- a summons in the Companies Court that deals with the remuneration of the joint provisional liquidators and Equitas has been joined (at its request I understand) in order to have its views capable of being expressed on the subject.
7.	As the nature of the ordinary application that I read out indicates, Equitas wishes to obtain a list of creditors.  In fact, it transpires that it would be content to have the top 50 creditors in value and to have merely their names and addresses rather than their ascribed evaluations of indebtedness.  The battleground, therefore, is whether Equitas should have that or not.
8.	I approach the subject on the basis that the current proceeding is still a winding up petition based on insolvency and inability to pay debts.  As is well known, that is not simply a matter in which the views only of the immediately parties before the court are to be taken into account but that a winding up petition is an invocation of a class right, the right being, even on a director’s petition, the right of, amongst others, creditors of the company.  
9.	It seems to me an essential ingredient when a class right is invoked, that members of the class should be able to find out who the other members of the class are.  Indeed, in terms of the scheme of arrangement, the nature of the class is defined by reference to whether they have such interests as could usefully be the subject of discussion between them.  Of course, most winding up petitions are dealt with relatively briefly and, if the petition succeeds, there is highly likely to be a statement of affairs required which will set out inter alia the creditors of the company and amounts which they are owed.  In an ordinary liquidation, therefore, the ability of the class to discuss amongst itself is facilitated by that public document, the statement of affairs.
10.	But here, because of the unusual circumstance that, despite there being a petition, there has never been a winding up order, there is no statement of affairs.  One could be required.  That is quite clear under the terms of the Act, but to require a statement of affairs to be drawn up merely to provide one creditor or even a number of creditors with a list of the other creditors would seem to be a somewhat cumbersome, expensive and time-consuming process.  So the notion of ordering a statement of affairs, or asking the official receiver to require one and, should he so fail, ordering a statement of affairs under section 131, would seem to be a very cumbersome machinery which I would prefer not to adopt.  In any event, that particular machinery has not really been sought to be adopted.  However, as I have said earlier, one of the routes which Miss Hilliard seeks to explore, is rule 12.17.  It is headed, “Right to have a list of creditors”, sub rule (1):
“This Rule applies in any of the following proceedings -
(a)	proceedings under Part II of the Act (company administration),
(b)	a creditors’ voluntary winding up, or a winding up by the court, and
(c)	proceedings in bankruptcy.
(2)  In any such proceedings a creditor who under the Rules has the right to inspect documents on the court file also has the right to require the responsible insolvency practitioner to furnish him with a list of the insolvent’s creditors and the amounts of their respective debts.  
This does not apply if the statement of the insolvent’s affairs has been filed in court or, in the case of a creditors’ voluntary winding up, has been delivered to the registrar of companies.”  
Then there is a rule 2A which is added for European purposes.  Then:
“(3)  The insolvency practitioner, on being required by any person to furnish the list, shall send it to him, but is entitled to charge the appropriate fee for doing so.”
11.	Miss Hilliard says that this is a plain case of there being a proceeding within (1)(b), namely a winding up by the court.  The difficulty there is that there is no winding up order.  Well, says Miss Hilliard, one has to go back to the deeming provisions of section 129(2).  Section 129 is headed “Commencement of winding up by the court”, and section 129(1) deals with particular situations that do not apply and then in (2) says:
“In any other case, the winding up of a company by the court is deemed to commence at the time of the presentation of the petition for winding up.”  
Miss Hilliard seeks to say that once a petition is presented, even if no order has been made on it for a winding up, the winding up is deemed to have commenced at the presentation of the petition.  In my view, that argument is utterly hopeless and contrary to the understanding and practice of the court, certainly in the last 60 years.
12.	What 129(2) does, where there has been a winding up order, is that it indicates by a deeming process when that winding up should be taken to have begun, namely at the presentation of the petition.  It does no more than that.  
13.	Both Miss Hilliard and Mr Tamlyn have sought to drawn inferences from other sections or subsections of the Act to bolster their arguments, but I did not find that any of the references by Miss Hilliard threw any light that was favourable to 129(2) being extended in the way that she sought, or, indeed, in allowing me to read rule 12.17 otherwise than a literal reading of it suggests.  It seems to me that to be within 12.17(1)(b), in the absence of a creditors voluntary winding up, there has to have been a winding up order by the court and here there is not one and hence 12.17 does not assist the applicant, Equitas.  Why it should not have been included that the right could be invoked where there was a longstanding provisional liquidator I cannot tell, but I do not see any ability to read into 12.17(1)(b) that the rule applies where there is no winding up by the court but where there is a provisional liquidation.  I do not find in Equitas’ favour on that rule. 
14.	As to the ability of the court to fill a void simply by reference to the inherent jurisdiction and to the fact that respondents, as they happen to be here, are officers of the court, there are some indications in some authorities that such things can be done.  But it seems to me that where there is another route expressly open one should not need to stoop to that sort of vague inference and to invocation of some rather dubious and even mystical inherent jurisdiction.  Here I am unpersuaded about the relief being available simply by reference to the position of Mr Jacob and Mr Ruddock as officers of the court.  Why I am unpersuaded is that it seems to me that section 135(4) does enable the court expressly to do what is sought.  I am not saying at this stage that it ought to be done, but that the section does empower the court to do what the ordinary application seeks to be done.  135(4) says:
“The provisional liquidator shall carry out such functions as the court may confer on him.”  
And, as Miss Hilliard points out, 135 is headed, “Appointment and powers of provisional liquidator”.  Mr Tamlyn would seek to limit the word “functions” in some way which I have not understood, but in any event, I think the heading “and powers” indicates that a broad meaning is to be given to 135(4).
15.	It is open to me, as I see it, to describe one of the functions which ought to be carried out by the provisional liquidators as the circulation of material about creditors to creditors.  I regard myself as having jurisdiction under section 135(4) but then the question arises, should that jurisdiction be exercised?
16.	The views of a number of creditors were canvassed by the provisional liquidators and quite a number of them indicated that they would rather not have their names, contact persons, addresses and amounts of debt made available to other creditors or to Equitas.  That does not surprise me in the least.  It seems to me that where a company has done business with a company that has become insolvent and hence is owed money by the insolvent company, it would quite often wish to have that information kept private.  As I mentioned earlier, in the ordinary way, that information would not have been kept private had there been a movement, as one could ordinarily expect, from winding up petition to winding up order.  Where even the directors indicate that the company is insolvent and unable to pay its debts, there would, in almost every case, have been a statement of affairs which disclosed to each creditor the names and amounts to all other creditors.
17.	That, as it transpires, on request having been made to them by the provisional liquidators, a number of creditors have wished to keep the existence of their indebtedness secret, is, as it seems to me, no surprise.  It is what one might ordinarily expect, but I do not think that that canvassing is in any way preclusive of an order under section 135(4).  If, as part of or in course of the invocation of class rights by way of a petition for a winding up, creditors wish to know about each others’ existence, it seems to me that is a perfectly reasonable thing to require.
18.	The provisional liquidators have set out, though, a number of reasons which concern them about the consequences of a revelation to Equitas of even the names only of the top 50 creditors in value.  They are set out in paragraph 14 of the 31st witness statement of Mr Jacob of 13 April 2005.  I will not go through those reasons.  They do not seem to me to be persuasive.  I can quite see as a scheme of arrangement draws near or as commercial deals with the bank that is thought to be saviour in this case draw near, there is some need for caution in the dispersal of information.  But, in general terms, I cannot see that merely to give Equitas the names only of the 50 most valuable creditors is likely to prejudice either a scheme of arrangement or any dealing between the joint provisional liquidators and any bank that might otherwise be concerned.
19.	There is, as it is has been developed in argument, some concern about whether Equitas or someone learning by way of Equitas of the existence and names of creditors should embark upon some process of debt dealing, for example by  acquiring at less than 100 per cent a debt and then standing in the place of that erstwhile creditor and then receiving 100 per cent in the ultimate distribution which is hoped for.  I find it very difficult to see that as any real risk.  The creditors have already been told by circular letter that payment of 100 per cent or so is a real possibility in this case and if they choose to do dealings at some lower, or, indeed, higher rate, then that seems to me not a thing that need worry the joint provisional liquidators.  
20.	There is some fear touched on in paragraph 14.2 of Mr Jacob’s witness statement of some form of economic duress being exerted by Equitas on others but I am bound to say I find it difficult to focus on quite what the risk is to jeopardise a beneficial winding up ultimately emerging or even a beneficial scheme of arrangement or deal with a bank emerging.  Paragraph 14.3 touches on a concern about the terms of settlement of the scheme being leaked into the marketplace.  That was described by Mr Tamlyn as the main reason for concern.  I do not see that merely giving Equitas the names only of the top 50 creditors has any real practical effect on the likelihood of some inconvenient or wrongful dispersal of the terms of settlement of the scheme.
21.	I have not, as I have indicated, found the reasons given in paragraph 14 of Mr Jacob’s witness statement as really creating any true concerns that need bother the joint provisional liquidators.  But one thing has emerged that I think they are entitled to bother about, and that is this.  It is said that back in 1996 when the informal creditors committee was set up -- and this is not in evidence but has been said to me on instruction -- that it was made clear to members of the ICC and was minuted at the time that all information that members of the ICC received was confided to them on the footing, presumably accepted by them at the time, that it would be kept confidential.  I have not seen any such terms, and they would be a little surprising were they to exist, but, assuming that they did exist, it seems to me that the joint provisional liquidators would be entitled to insist on that degree of confidentiality being maintained and hence that where information has been confided to Equitas as a member of the ICC on express terms, imposed on Equitas and minuted in the minutes of the ICC in 1996, that information confided to it as such was to be kept confidential, then that confidentiality ought properly to be preserved.
22.	I do not think that it was wrong of the joint provisional liquidators to seek a degree of protection.  Having canvassed the creditors, whether they should have done or not, and having obtained an indication from the creditors that some at least, indeed a majority of the creditors, would prefer not to have their names and amounts made public, it seems to me that the joint provisional liquidators would be running a risk if, taking the attack upon them as being under rule 12.17, they  had gone ahead simply to give the information to Equitas.  I think the joint provisional liquidators were entitled to take the view, for safety’s sake on their own part, that it would be right to put the matter into the hands of the court rather than simply bowing to Equitas’ wish.  So I do not see that it was wrong of the joint provisional liquidators not have to immediately conceded that Equitas were entitled to what they were asking for.
23.	For all that, it does seem to me, for the reasons I have given, and especially having regard to the ordinary practice in a liquidation of having a public statement of affairs and to windings up being invocations of a class right, that Equitas should be entitled to receive the names only of the top 50 creditors in value.  There is no suggestion that that is difficult or expensive or involves delay on the part of the joint provisional liquidators because it is apparent from the papers in front of me that the run-off managers, Chiltington, have devised such a table, a table going beyond 50.  But Miss Hilliard indicated that names only in the top 50 would suffice and it seems to me there is no reason to go beyond that.
24.	A great criticism made by the joint provisional liquidators is this: why is it that Equitas needs this information?  What was it proposing to do with it?  Might it not be harmful?  I have touched on Mr Jacob’s paragraph 14, but there is a rather more broad fear that somehow the information given to Equitas should be used for some collateral or unattractive purpose.  In the course of argument it has been explored whether undertakings could be given to protect the provisional liquidation from any such abuse.  Miss Hilliard on behalf of Equitas, although a little reluctant to give any undertakings, is willing nonetheless to offer an undertaking that I will read:
“… save in so far as otherwise consented to by the JPLs, [Equitas undertakes] not to use the information provided to Equitas pursuant to the terms of this order otherwise than for the purpose of discussing with creditors of the Company:
1.	Equitas’ opposition to the JPL’s application for approval of their remuneration for the period … to 26 September 2004;
2.	Equitas’ views on the conduct of the provisional liquidation and the efficiency of the JPLs;
3.	Prior to publication of the scheme, the identity of the proposed scheme administrators and any powers of removal … contained in the proposed scheme.”  
25.	That, I think, gives an adequate body of protection to the joint provisional liquidators and the joint provisional liquidation generally, provided that something is tacked onto it to maintain the position of confidentiality relating to material acquired in the way that I earlier spoke of.  So it seems to me that what needs to be tacked on to that undertaking is this:
“Provided always that nothing herein enables Equitas to use any information which came to Equitas as a member of the [ICC] and came to it on express terms [imposed on Equitas] and minuted [in the minutes of the ICC] in 1996 that the same was confided to Equitas on the basis that the same would be kept confidential.”
26.	I do not know whether any such minute was made or, whether any such terms were agreed; indeed I am told by Miss Hilliard that Equitas was not even a member of the committee in 1996, but it seems to me that if the undertaking is offered with that addition, that would adequately protect the provisional liquidation against abuse.  There is no suggestion that Equitas is other than a responsible body likely to conduct itself in a responsible way, and, if the undertaking has that addition, then it seems to me I should be willing to order under 135(4) in a form that puts, amongst the many purposes already specified for the provisional liquidator, the carrying out of the function of so distributing to Equitas, and, as I will have to discuss with Mr Tamlyn, whether to other creditors as well, the names only of the top 50 in value of the creditors of the company.  That is an unusual function but I do not see it as being an impossible function and it seems to me that using section 135(4) in that way fills the void which otherwise was not provided for, namely the unusual circumstance of having a petition of 1996 still in being in 2005, not far short, now of nine years after the petition was presented to the court and in the circumstances, which then existed but does not exist now, that the more convenient machinery of administration could not then be resorted to.
27.	I will now have to ask Miss Hilliard whether she is willing to give the undertaking with the additional phrases that I have mentioned and also it will need to be thought about how precisely the function within 135(4) should be defined.
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