Building Societies Act 1986

Section 90.

SCHEDULE 15Application of Companies Winding Up Legislation to Building Societies

PART IGeneral Mode of Application

1The enactments which comprise the companies winding up legislation (referred to in this Schedule as " the enactments ") are the provisions of—

(a)Parts IV, VI, VII and XII of the [1986 c. 45.] Insolvency Act 1986, or

(b)Part XX of the [S.I. 1986/1032 (N.I. 6).] Companies (Northern Ireland) Order 1986,

and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the Insolvency Act 1986 or Article 678 of, and Schedule 23 to, the Companies (Northern Ireland) Order 1986.

2Subject to the following provisions of this Schedule, the enactments apply to the winding up of building societies as they apply to the winding up of companies limited by shares and registered under the [1985 c. 6.] Companies Act 1985 or (as the case may be) the Companies (Northern Ireland) Order 1986.

3(1)The enactments shall, in their application to building societies, have effect with the substitution—

(a)for " company " of " building society " ;

(b)for " the registrar of companies " or " the registrar " of " the central office ";

(c)for " the articles " of " the rules " ; and

(d)for " registered office " of " principal office ".

(2)In the application of the enactments to building societies—

(a)every reference to the officers, or to a particular officer, of a company shall have effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer; and

(b)every reference to an administrator, an administration order, an administrative receiver, a shadow director or a voluntary arrangement shall be omitted.

4(1)Where any of the enactments as applied to building societies requires a notice or other document to be sent to the central office, it shall have effect as if it required the central office to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it.

(2)Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.

5Any enactment which specifies a money sum altered by order under section 416 of the [1986 c. 45.] Insolvency Act 1986, or, as the case may be, Article 614 of the [S.I. 1986/1032 (N.I. 6).] Companies (Northern Ireland) Order 1986, (powers to alter monetary limits) applies with the effect of the alteration.

PART IIModified Application of Insolvency Act 1986 Parts IV and XII

Preliminary

6In this Part of this Schedule, Part IV of the Insolvency Act 1986 is referred to as "Part IV"; and that Act is referred to as " the Act".

Members of a building society as contributories in winding up

7(1)Section 74 (liability of members) of the Act is modified as follows.

(2)In subsection (1), the reference to any past member shall be omitted.

(3)Paragraphs (a) to (d) of subsection (2) shall be omitted ; and so shall subsection (3).

(4)The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.

8Sections 75 to 78 and 83 in Chapter I of Part IV (miscellaneous provisions not relevant to building societies) do not apply.

9(1)Section 79 (meaning of " contributory ") of the Act does not apply.

(2)In the enactments as applied to a building society, " contributory "—

(a)means every person liable to contribute to the assets of the society in the event of its being wound up, and

(b)for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

(c)includes persons who are liable to pay or contribute to the payment of—

(i)any debt or liability of the building society being wound up, or

(ii)any sum for the adjustment of rights of members among themselves, or

(iii)the expenses of the winding up ;

but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.

Voluntary winding up

10(1)Section 84 of the Act does not apply.

(2)In the enactments as applied to a building society, the expression " resolution for voluntary winding up " means a resolution passed under section 88(1) of this Act.

11In subsection (1) of section 101 (appointment of liquidation committee) of the Act, the reference to functions conferred on a liquidation committee by or under that Act shall have effect as a reference to its functions by or under that Act as applied to building societies.

12(1)Section 107 (distribution of property) of the Act does not apply ; and the following applies in its place.

(2)Subject to the provisions of Part IV relating to preferential payments, a building society's property in a voluntary winding up shall be applied in satisfaction of the society's liabilities to creditors (including any liability resulting from the variation to the liquidator's duty effected by section 28 or 31 of this Act) pari passu and, subject to that application, in accordance with the rules of the society.

13Sections 110 and 111 (liquidator accepting shares, etc. as consideration for sale of company property) of the Act do not apply.

14Section 116 (saving for certain rights) of the Act shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.

Winding up by the court

15In sections 117 (High Court and county court jurisdiction) and 120 (Court of Session and sheriff court jurisdiction) of the Act, each reference to a company's share capital paid up or credited as paid up shall have effect as a reference to the amount standing to the credit of shares in a building society as shown by the latest balance sheet.

16Section 122 (circumstances in which company may be wound up by the court) of the Act does not apply.

17Section 124 (application for winding up) of the Act does not apply.

18(1)In section 125 (powers of court on hearing of petition) of the Act, subsection (1) applies with the omission of the words from " but the court" to the end of the subsection.

(2)The conditions which the court may impose under section 125 of the Act include conditions for securing—

(a)that the building society be dissolved by consent of its members under section 87, or

(b)that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or

(c)that the society transfers its business to a company under section 97,

and may also include conditions for securing that any default which occasioned the petition be made good and that the costs, or in Scotland the expenses, of the proceedings on that petition be defrayed by the person or persons responsible for the default.

19Section 126 (power of court, between petition and winding-up order, to stay or restrain proceedings against company) of the Act has effect with the omission of subsection (2).

20If, before the presentation of a petition for the winding up by the court of a building society, an instrument of dissolution under section 87 is placed in the society's public file, section 129(1) (commencement of winding up by the court) of the Act shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.

21(1)Section 130 of the Act (consequences of winding-up order) shall have effect with the following modifications.

(2)Subsections (1) and (3) shall be omitted.

(3)A building society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order to the central office ; and the central office shall keep the notice in the public file of the society.

(4)If a building society fails to comply with sub-paragraph (3) above, it shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and so shall any officer who is also guilty of the offence.

22Section 140 (appointment of liquidator by court in certain circumstances) of the Act does not apply.

23In the application of sections 141(1) and 142(1) (liquidation committees), of the Act to building societies, the references to functions conferred on a liquidation committee by or under that Act shall have effect as references to its functions by or under that Act as so applied.

24The conditions which the court may impose under section 147 (power to stay or sist winding up) of the Act shall include those specified in paragraph 18(2) above.

25Section 154 (adjustment of rights of contributories) of the Act shall have effect with the modification that any surplus is to be distributed in accordance with the rules of the society.

26In section 165(2) (liquidator's powers) of the Act, the reference to an extraordinary resolution shall have effect as a reference to a special resolution.

Winding up: general

27Section 187 (power to make over assets to employees) of the Act does not apply.

28(1)In section 201 (dissolution: voluntary winding up) of the Act, subsection (2) applies without the words from " and on the expiration" to the end of the subsection and, in subsection (3), the word " However " shall be omitted.

(2)Sections 202 to 204 (early dissolution) of the Act do not apply.

29In section 205 (dissolution: winding up by the court) of the Act, subsection (2) applies with the omission of the words from " and, subject" to the end of the subsection ; and in subsections (3) and (4) references to the Secretary of State shall have effect as references to the Commission.

Penal provisions

30Sections 216 and 217 of the Act (restriction on re-use of name) do not apply.

31(1)Sections 218 and 219 (prosecution of delinquent officers) of the Act do not apply in relation to offences committed by members of a building society acting in that capacity.

(2)Sections 218(5) of the Act and subsections (1) and (2) of section 219 of the Act do not apply.

(3)The references in subsections (3) and (4) of section 219 of the Act to the Secretary of State shall have effect as references to the Commission ; and the reference in subsection (3) to section 218 of the Act shall have effect as a reference to that section as supplemented by paragraph 32 below.

32(1)Where a report is made to the prosecuting authority (within the meaning of section 218) under section 218(4) of the Act, in relation to an officer of a building society, he may, if he thinks fit, refer the matter to the Commission for further enquiry.

(2)On such a reference to it the Commission shall exercise its power under section 55(1) of this Act to appoint one or more investigators to investigate and report on. the matter.

(3)An answer given by a person to a question put to him in exercise of the powers conferred by section 55 on a person so appointed may be used in evidence against the person giving it.

Preferential debts

33Section 387 (meaning in Schedule 6 of " the relevant date ") of the Act applies with the omission of subsections (2) and (4) to (6).

PART IIIModified Application Of The Companies (Northern Ireland) Order 1986, Part XX

Preliminary

34In this Part of this Schedule, Part XX of the [S.I. 1986/1032 (N.I. 6).] Companies (Northern Ireland) Order 1986 is referred to as " Part XX ", that Order is referred to as " the Order " and references to " Articles " are references to Articles of that Order.

Members of building society as contributories in winding up

35(1)Article 468 (liability of members) is modified as follows.

(2)In paragraph (1), the references to any past member shall be omitted.

(3)Sub-paragraphs (a) to (d) of paragraph (2) shall be omitted ; and so shall paragraph (3).

(4)The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.

36Articles 469 to 472 and 477 in Chapter I of Part XX (miscellaneous provisions not relevant to building societies) do not apply.

37(1)Article 473 (meaning of " contributory ") does not apply.

(2)In the enactments as applied to a building society, " contributory "—

(a)means every person liable to contribute to the assets of the society in the event of its being wound up, and

(b)for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

(c)includes persons who are liable to pay or contribute to the payment of—

(i)any debt or liability of the building society being wound up, or

(ii)any sum for the adjustment of rights of members among themselves, or

(iii)the expenses of the winding up ;

but does not include persons liable to contribute by virtue of a declaration by the court under Article 583 (imputed responsibility for fraudulent trading).

Voluntary winding up

38(1)Article 529 does not apply.

(2)In the enactments as applied to a building society, the expression " resolution for voluntary winding up" means a resolution passed under section 88(1) of this Act.

39Articles 539, 540 and 551 (liquidator accepting shares, etc. as consideration for sale for company property) do not apply.

40In the application of Article 548 (committees of inspection) to building societies, a committee of inspection shall exercise only those functions conferred by or under the Order as so applied.

41(1)Article 555 (distribution of property) does not apply; and the following applies in its place.

(2)Subject to the provisions of Part XX relating to preferential payments, a building society's property in a voluntary winding up shall be applied in satisfaction of the society's liabilities to creditors (including any liability resulting from the variation to the liquidator's duty effected by section 28 or 31 of this Act) pari passu and subject to that application, in accordance with the rules of the society.

42Article 562 (saving for certain rights) shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.

Winding up by the court

43Article 479 (circumstances in which company may be wound up by the court) does not apply.

44Article 481 (application for winding up) does not apply.

45(1)Article 482 (powers of court on hearing of petition) applies with the omission of the words from " but the court" to the end of the Article.

(2)The conditions which the court may impose under Article 482 include conditions for securing—

(a)that the building society be dissolved by consent of its members under section 87, or

(b)that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or

(c)that the society transfers its business to a company under section 97,

and may also include conditions for securing that any default which occasioned the petition be made good and that the costs of the proceedings on that petition be defrayed by the person or persons responsible for the default.

46Article 483 (power of court, between petition and winding-up order, to stay or restrain proceedings against company) has effect with the omission of paragraph (2).

47If, before the presentation of a petition for the winding up by the court of a building society, an instrument of dissolution under section 87 is placed in the society's public file, Article 486(1) (commencement of winding up by the court) shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.

48(1)Article 487 (consequences of winding-up order) shall have effect with the following modifications.

(2)Paragraphs (1) and (3) shall be omitted.

(3)A building society shall within 15 days of a winding-up order being made in respect of it, give notice of the order to the central office, and the central office shall keep the notice in the public file of the society.

(4)If a building society fails to comply with sub-paragraph (3) above, it shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale ; and so shall any officer who is also guilty of the offence.

49In the application of Article 507 (committees of inspection) to building societies, a committee of inspection shall exercise only those functions conferred by or under the Order as so applied.

50The conditions which the court may impose under Article 510 (power to stay winding up) shall include those specified in paragraph 45(2) above.

51Article 519 (adjustment of rights of contributories) shall have effect with the modification that any surplus is to be distributed in accordance with the rules of the society.

52In Article 556(1) (liquidator's powers), the reference to an extraordinary resolution shall have effect as a reference to a special resolution.

Winding up: general

53(1)Article 610 (power to make over assets to employees) does not apply.

(2)Article 543(5) and Article 553(6) (final meeting and dissolution: voluntary winding up) shall apply without the words from "and on the expiration " to " dissolved ; but".

Penal provisions

54(1)Articles 585 and 586 (prosecution of delinquent officers) do not apply in relation to offences committed by members of a building society acting in that capacity.

(2)Article 585(3) and paragraphs (1) and (2) of Article 586 do not apply.

(3)The references in paragraphs (3) and (4) of Article 586 to the Department of Economic Development shall have effect as references to the Commission ; and the reference in paragraph (3) to Article 585 shall have effect as a reference to that Article as supplemented by paragraph 55 below.

55(1)Where a report is made to the prosecuting authority (within the meaning of Article 585) under Article 585(2) in relation to an officer of a building society, he may, if he thinks fit, refer the matter to the Commission for further enquiry.

(2)On such reference to it the Commission shall exercise its power under section 55(1) of this Act to appoint one or more investigators to investigate and report on the matter.

(3)An answer given by a person to a question put to him in exercise of the powers conferred by section 55 on a person so appointed may be used in evidence against the person giving it.

PART IVDissolution of Building Society wound up (England and Wales, Scotland and Northern Ireland)

56(1)Where a building society has been wound up voluntarily, it is dissolved as from 3 months from the date of the placing in the public file of the society of the return of the final meetings of the society and its creditors made by the liquidator under—

(a)section 94 or (as the case may be) 106 of the [1986 c. 45.] Insolvency Act 1986 (as applied to building societies), or on such other date as is determined in accordance with section 201 of that Act, or

(b)Article 543 or (as the case may be) 553 of the [S.I. 1986/1032 (N.I. 6).] Companies (Northern Ireland) Order 1986 (as so applied), or on such other date as is determined in accordance with that Article,

as the case may be.

(2)Where a building society has been wound up by the court, it is dissolved as from 3 months from the date of the placing in the public file of the society of—

(a)the liquidator's notice under section 172(8) of the [1986 c. 45.] Insolvency Act 1986 (as applied to building societies), or

(b)the notice of the completion of the winding up from the official receiver or the Official Assignee for company liquidations,

or on such other date as is determined in accordance with section 205 of that Act, as the case may be.

57(1)Sections 654 to 658 of the [1985 c. 6.] Companies Act 1985 or Articles 605 to 609 of the Companies (Northern Ireland) Order 1986 (provisions as to corporate property as bona vacantia) shall have the same effect in relation to the property of a dissolved building society (whether dissolved under section 87 or following its winding up) as they have in relation to the property of a dissolved company, but with the following modifications.

(2)Paragraph 3(1) above shall apply to those sections for the purpose of their application to building societies.

(3)Subsection (2) of section 654 and subsections (1) and (3) of section 655 apply without the words " or 653 " ; and the references in those subsections to section 651 shall have effect as references to section 91 of this Act.

(4)Paragraph (2) of Article 605 and paragraph (1) of Article 606 apply without the words " or 604 " ; and references in those paragraphs to Article 602 shall have effect as references to section 91 of this Act.

Insolvency rules and fees: England and Wales and Scotland

58(1)Rules may be made under section 411 of the Insolvency Act for the purpose of giving effect, in relation to building societies, to the provisions of the applicable winding up legislation.

(2)An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the applicable winding up legislation and the performance by the official receiver or the Secretary of State of functions under it.

Insolvency rules and fees : Northern Ireland

59(1)Rules may be made under Article 615 of the Companies (Northern Ireland) Order 1986 for the purpose of giving effect in relation to building societies, to the provisions of the applicable winding up legislation.

(2)Rules made by the Department of Economic Development under paragraph (6) of Article 613 may make provision for fees to be payable under that paragraph in respect of proceedings under the applicable winding up legislation and the performance by the Official Assignee for company liquidations or that Department of functions under it.