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COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 287

Preferential payments.

287.(1) In a winding up there shall be paid in priority to all other debts

(a)the following rates and taxes

(i)all local rates, regional rate and district rate due from the company at
the relevant date, and having become due and payable within twelve months next
before that date;

(ii)all income tax, profits tax, excess profits tax, excess profits levy or
other assessed taxes assessed on the company up to the fifth day of April next
before that date, and not exceeding in the whole one year's assessment;

<(iii)any sums due at the relevant date from the company on account of tax deductions, as defined in sub-section (4) of section 30 of the Finance Act 1952 for the twelve months next before that date;


<(iv)any amount due by way of the general betting duty under section 16 of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 or by virtue of section 24(1) of that Act from the company at the relevant date which became due within twelve months next before that date;


(v)the amount of any value added tax or car tax due at the relevant date from
the company which became due within the twelve months next before that date;

(b)all wages or salary (whether or not earned wholly or in part by way of
commission) of any clerk or servant in respect of services rendered to
the company during four months next before the relevant date;

(c)all wages (whether payable for time or for piece work) of any workman or
labourer in respect of services rendered to the company during four months
next before the relevant date;

(d)any sum ordered under the Reinstatement in Civil Employment Act 1944, Part
II of the National Service Act 1948 or the Reinstatement in Civil Employment
Act 1950 to be paid by way of compensation where the default by reason of
which the order for compensation was made occurred before the relevant date,
whether or not the order was made before that date;

(e)unless the company is being wound up voluntarily merely for the purposes of
reconstruction or of amalgamation with another company, all the debts
specified in section 144(2) of the Social Security (Northern Ireland) Act
1975, Schedule 4 to the Social Security Pensions (Northern Ireland) Order 1975
and any corresponding provisions in force in Great Britain;

(f)all accrued holiday remuneration becoming payable to any clerk, servant,
workman or labourer (or in the case of his death to any other person in his
right) on the termination of his employment with the company before or by the
effect of the winding-up order or resolution.

(2) Notwithstanding anything in paragraphs (b), (c) and (d) of sub-section
(1), but subject to sub-section (3), the sum to which priority is to be given
under those paragraphs respectively shall not, in the case of any one
claimant, exceed #800.

(3) Where a claimant under paragraph (c) of sub-section (1) is a labourer in
husbandry who has entered into a contract for the payment of a portion of his
wages in a lump sum at the end of the year of hiring, he shall have priority
in respect of the whole of such sum, or a part thereof, as the court may
decide to be due under the contract, proportionate to the time of service up
to the relevant date.

(4) Where any payment has been made

(a)to any clerk, servant, workman or labourer in the employment of a company,
on account of wages or salary; or

(b)to any such clerk, servant, workman or labourer or, in the case of his
death, to any other person in his right, on account of
accrued holiday remuneration;

(5) The foregoing debts shall

(a)rank equally among themselves and be paid in full, unless the assets are
insufficient to meet them, in which case they shall abate in equal
proportions; and

(b)so far as the assets of the company available for payment of general
creditors are insufficient to meet them, have priority over the claims of
holders of debentures under any floating charge created by the company, and be
paid accordingly out of any property comprised in or subject to that charge.

(6) Subject to the retention of such sums as may be necessary for the costs
and expenses of the winding up, the foregoing debts shall be discharged
forthwith so far as the assets are sufficient to meet them, and in the case of
debts to which priority is given by paragraph (e) of sub-section (1) formal
proof thereof shall not be required except in so far as is otherwise
prescribed.

(7) For the purposes of this section

(a)any remuneration in respect of a period of holiday or of absence from work
through sickness or other good cause shall be deemed to be wages in respect of
services rendered to the company during that period;

(b)"accrued holiday remuneration" includes, in relation to any person, all
sums which, by virtue either of his contract of employment or of any enactment
(including any order made or direction given under any Act) are payable on
account of the remuneration which would, in the ordinary course, have become
payable to him in respect of a period of holiday had his employment with
the company continued until he became entitled to be allowed the holiday;

(c)references to remuneration in respect of a period of holiday include any
sums which, if they had been paid, would have been treated for the purposes of
the Social Security (Northern Ireland) Act 1975 or the Social Security Act
1975 as earnings paid in that period;

(d)any amount owed by an employer to an employee in respect of

(i)a guarantee payment under Article 3 of the Industrial Relations (No. 2)
(Northern Ireland) Order 1976;

(ii)remuneration on suspension on medical grounds under Article 9 of the said
Order of 1976;

<(iii)any payment for time off under Article 37(4) or 41(3) of the said Order of 1976;


<(iv)remuneration under a protective award made under Article 51 of the Industrial Relations (Northern Ireland) Order 1976;


(d)shall be treated as if it were wages payable by the employer to the
employee in respect of the period for which it is payable;

(e)"the relevant date" means

(i)where a company is ordered to be wound up compulsorily, the date of the
appointment (or first appointment) of a provisional liquidator, or, if no such
appointment was made, the date of the winding-up order, unless in either case
the company had commenced to be wound up voluntarily before that date; and

(ii)where sub-paragraph (i) does not apply, the date of the passing of the
resolution for the winding up of the company;

(f)the value added tax which became due within the twelve months mentioned in
sub-section (1)(a)(v) in respect of any prescribed accounting period (within
the meaning of section [3(1)] of the Finance Act 1972) falling partly within
and partly outside those twelve months shall be taken to be such part of the
tax due for the whole of that accounting period as is proportionate to the
part of the period falling within those twelve months.

(8) For the purposes of section 92, paragraph (f) of sub-section (1) shall
have effect as if for the reference to a winding-up order or resolution there
were substituted a reference to the appointment of a receiver or possession
being taken, by or on behalf of the debenture holders, of the company's
property.

(9) Where the relevant date or, where section 92 has effect, the corresponding
date referred to in sub-section (2) of that section, occurred before the
coming into operation of Article 85 of the Companies (Northern Ireland) Order
1978, the provisions relating to preferential payments which would have
applied if that Order had not been made shall be deemed to remain in full
force.]

(2) In relation to things made or done before the commencement of this Act,
sub-section (1) shall have effect with the substitution, for references to
six months, of references to three months.

(3) Any conveyance or assignment by a company of all its property to trustees
for the benefit of all its creditors shall be void to all intents.

© 1960 Crown Copyright

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