What is a petition search?
To better understand what is a ‘petition search’ it is perhaps first worthwhile exploring the nature of petitions, and then specifically address petitions in context to conveyancing.
The core substance of a petition is the lodging of a written legal document formally requesting/ appealing judicial action of some kind, i.e., that a court case be heard. A case may be petitioned for by individuals, or an organisation against a respondent.
Most broadly speaking a petition to the various courts may arise for a multitude of reasons, i.e., in divorce cases, personal injuries cases, bankruptcy, and so on and so forth. However, without the courts first receiving a petition and pleadings (a formal statement outlining one party’s version of events and legal basis for a lawsuit), and the defendant receiving a copy of those documents, then no case can proceed to trial.
However, in specific context of conveyancing searches, we understand here a petition to be a ‘Petition for the winding-up of a company’, which are heard by the High Court. Such petitions (under The Companies Act 2014) are typically lodged in the Central Office, with a copy of the petition also provided to the chancery court registrar.
It is against these Companies Act matters lodged with the Central Office that a petition search is conducted.
Why should the purchasing solicitor/ conveyancer conduct a petition search when investigating title in a property/ right/ interest purchase?
If a company/ legal entity is involved in the conveyancing/ sale of a property/ right/ interest it is important that a petition search is conducted prior to contracts being signed.
Irrespective of it being either voluntarily or involuntarily, if a petition to ‘wind-up’ or ‘liquidate’ a company is lodged with the Central Office the intended outcome is the same, i.e., the cessation of activities, the disbursement of the entities debts and the legal end of the entity in an orderly manner.
As such a petition search against the High Court records may flag whether a liquidator has, or is potentially about to be, appointed against a company or not. If so, then not dissimilar to the appointment of an assignee of bankruptcy, the powers of the directors may become vested elsewhere, i.e., with the liquidator.
To that end the company as a seller would no longer control (or deal in a sale, mortgage etc of) their real property assets for sale purposes, as they do not have the authority to do so.
For those reasons, solicitors or conveyancers acting on behalf of the purchasers need to be certain that the property in not in liquidation (or potential liquidation) and that the sellers still retain the authority and control over the property for sale.
How and what to search for on the Petitions search?
As mentioned previously, a petition to voluntarily or involuntarily wind up/ liquidate a company results in the same loss (or potential) loss of control on the legal entity being wound-up.
As such it is important to search for Petitions (Companies Act Matters) in the Central office against both the plaintiff (typically but not restricted to a voluntary liquidation) and the defendant (typically but not restricted to an involuntary liquidation) as follows:
Seller Names: In practical terms, a Petitions (Companies Act Matters) search is typically conducted against the name of the entity selling the property (or an interest or a right).
Purchasers Names: Additionally, when there is an undertaking by the solicitor to protect the interest of a lender/ lending institute where there is a mortgage to be issued, searches may be also conducted against the name of the entity purchasing the property/ right/ interest.
For the purchasing solicitor/ conveyancer a matching entry appearing on a petition search can alert them to the loss (or potential loss) of agency of either the selling or purchasing entity of the sale property, and the inconvenience of the premises possibly being saleable only under supervision of a liquidator.
What will the petition search result show me?
As standard Ellis & Ellis petition searches will be conducted against both records for the plaintiffs and the defendants in Companies Act matters and return the following:
MEMBERS’ VOLUNTARY LIQUIDATION: Directors’ voluntary liquidation of a solvent company
CREDITORS’ VOLUNTARY LIQUIDATION: Where a company is insolvent, the creditors’ may pursue a creditors voluntary liquidation to appoint a liquidator or nominate an alternative. A Committee of Inspection may be appointed which will represent both members and creditors’ interests.
COMPULSORY COURT LIQUIDATION: When a creditor has not been paid by its debtor and believes that the company is insolvent and cannot pay the debt owed to them. The High Court may be petitioned to wind up the company. Once the petition is heard, the court may make its decision to wind up. If so, then an Official Liquidator is appointed.
Notice of an appointment of a liquidator will subsequently appear on Companies Registration Office (CRO) records of the entity.
Naturally if a petition search is conducted and no matching entry is found we will clearly state that in our result.
Use a trusted Law Search provider.
Given the serious ramifications set out above of either not conducting a search at all, or worse, conducting an inadequate or erroneous petition search; it is imperative that purchasing solicitors/ conveyancers use a trusted law search provider such as Ellis & Ellis.
With our blend of a quick and easy-to-use ordering platform at www.ellis.ie , over 130 years of professional know-how, and a quality after-sales experience, we provide clients with a superior searching service.
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