256. Payment of preliminary costs, etc. Flashcards
- Payment of preliminary costs, etc.
As to costs when order made on application of company or liquidator
General overview
[256.01] Section 256(1) provides that the applicant shall bear his own costs in prosecuting the winding up application until a liquidator is appointed. However, s 256(4) provides that where the applicant is the company itself or the liquidator, the costs shall, subject to any order of the court, be paid out of the assets of the company. It is the invariable practice to allow as costs of the petition the costs of the company if it appears and consents to a winding up order. Therefore, the costs of the company of the petition down to and including the time when it could have consented to the order, namely, at the first hearing, should be taxed and paid out of the assets of the company and, thereafter, in the exercise of the court’s discretion under rule 195 of the Companies (Winding-up) Rules 1949 (UK), the company’s costs were not to be paid out of the assets of the company in priority to the payment in full of all unsecured creditors of the company
