ABSTRACT
Unlike most other common law jurisdictions, the UK provision only permits liquidators to initiate proceedings under s 214. Other common law jurisdictions that have a similar provision generally permit other parties to commence proceedings. In Ireland action can be taken by a receiver, examiner, creditor and a contributory, in addition to a liquidator (Companies Act 1963, s 297A). Under s 424 of the South African Companies Act 1973, creditors and members as well as liquidators are permitted to take action. The same can be said about both the New Zealand provision (Companies Act 1993, s 135) and the Singaporean (Companies Act 1990, s 340(2)). There may be some limit on when proceedings can be brought by some applicants. For example, in Australia before creditors can bring proceedings, they must obtain the consent of the liquidator (Corporations Act 2001, s 588R) or give notice to the liquidator after six months from the commencement of the winding up that it is intended to begin proceedings against a director and asking the liquidator to give to the creditor, within three months, either a consent or a statement of reasons why the liquidator is of the opinion that proceedings should not be initiated (s 588S). If no consent is given within the three months, the creditor may proceed against the director (s 588T(2)).1 If a reason for not proceeding
is given by the liquidator, it must be produced to the court in the action in which proceedings have been or are initiated (s 588T(3)). There has not been a huge number of cases initiated by creditors under the present regime, commenced in 1993, but creditors’ actions do constitute over 40 per cent of all actions.2 The reason for the UK legislation not permitting creditors to bring proceedings is probably in order to avoid a multiplicity of actions.
