On 10 September 2021, Chief Justice Smellie QC in Re Premier Assurance Group SPC Ltd. (in Official Liquidation) sanctioned a streamlined adjudication process proposed by the joint official liquidators ("JOLs") of Premier Assurance Group SPC Ltd (in Official Liquidation) (the "Company"), circumventing the requirement for thousands of participants to lodge separate proofs of debt in an insolvent liquidation.
In summary, the JOLs sought Court sanction for an alternative proving process involving more than 11,000 participants who held insurance policies referable to one of the segregated portfolios of the Company. The procedure proposed by the JOLs was akin to that applied in respect of depositors of licensed banks under the Companies Winding Up Rules, 2018. The JOLs proposed admitting the claims of participants based upon the amounts recorded as due to them in the Company's financial records and that sending notice to those participants would stand as their admission to proof. If a participant disagreed with the contents of a notice, the participant would be able to submit a proof of debt in the ordinary way (with the usual rights of appeal).
The Court was satisfied that the JOLs' proposal constituted a valid, cost-efficient and effective alternative format for proofs of debt and held that that it was within the Court's jurisdiction to sanction the JOLs' decision to dispense with the formal proofs of debt pursuant to paragraph 7 of Part I of Schedule 3 of the Companies Act (2021 Revision).
The judgment provides helpful clarification to practitioners in respect of the scope of the Court's jurisdiction to sanction the use of an alternative proving process by liquidators. The judgment also helpfully outlines the principles on which the Court will grant sanction of the exercise of liquidators' powers.