Animal charity awarded £22,000 as it sees off winding up order

An animal charity has been awarded £22,000 after an insolvency judge described a winding-up order brought against it as a “flagrant and serious” breach of proceedings.

The petition to wind up Animal Protection Services was presented to the High Court last month by the charity’s previous legal advisers, Parry & Welch.

The firm claims to be a creditor of the charity.

APS said its solicitors had notified the firm of a “substantial dispute” between the two parties in respect of a number of issues related to the quality of advice it had provided to the charity.

Third Sector understands Parry & Welch served the petition because it sought payment of legal fees from the charity after its retainer was terminated in September 2021, a debt the charity disputes.

The termination is also related to a judgement in November last year after which APS said it was considering legal action against Parry & Welch after claims were made that they had both acted improperly in the charity's pursuit of private prosecutions.

The Charity Commission contacted the charity’s trustees after a judge criticised APS, having found that dozens of pet owners might have suffered miscarriages of justice after being unfairly prosecuted by the charity and Parry & Welch.

APS previously denied any allegation that it had acted “improperly or maliciously”.

Horwich Farrelly, an insurance and commercial legal services firm acting on behalf of the charity, said the order was in clear breach of the provisions relating to the progression of winding-up petitions, and advertised the petition in breach of the insolvency rules.

Insolvency and Companies Court judge Clive Jones subsequently dismissed the petition at a hearing last month and awarded interim indemnity costs of £22,000 against Parry & Welch.

Horwich Farrelly said Jones described the breach as “flagrant and serious” and ruled that the early advertisement was an abuse of process and a “complete failure” to observe the requirements of winding-up petitions.

John Lord, the partner who handled the case at Horwich Farrelly, said: “APS strongly refutes that it is liable to pay the costs upon which Parry & Welch founded its winding-up petition. It was very surprising indeed that Parry & Welch elected to advertise the petition in clear breach of the rules.

“APS intends to proceed to assessment in order to recover the balance of its costs from Parry & Welch so that it is able to direct its precious resources in a manner which is consistent with its objectives.”

Parry & Welch did not responds to requests for comment from Third Sector.

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