This note explains what vesting orders are and how they are applied for.
What are vesting orders?
When a company is dissolved and ceases to exist, any property or assets held by the company, or held in trust for the company, is considered to be bona vacantia (or ownerless property) and so belongs to the Crown.
If a company was holding property on behalf of another person immediately before the company was dissolved, the trustee or owner can apply to the court to transfer the property to them rather than to the crown. This application is a vesting order.
A common situation where a vesting order is applied for is when a dissolved company had contracted to sell its assets but the goods were not transferred despite being paid for. The contract and evidence of the payment should be supplied as evidence in any vesting order application. This is a complicated area of law and you should seek legal advice if you are considering applying for a vesting order.
Most vesting order applications are dealt with in the Chancery Division of the High Court, but some are issued out of district registries or county courts. The district registries that have the power to make these judgments are:
A vesting order is a claim being made that property is not bona vacantia and therefore not the property of the Crown. The Attorney General represents the Crown in court as the defendant.
In practice, the Treasury Solicitor considers the evidence on the Attorney General’s behalf. If, after receiving the Treasury Solicitor’s advice, the Attorney General is satisfied that a trust is established, the Treasury Solicitor on behalf of the Attorney General will inform the claimant that the Crown will not claim the property as bona vacantia and will not oppose the vesting order, if the court decides to award one.
If the Attorney General is not satisfied that the evidence establishes a trust, the Treasury Solicitor, on behalf of the Attorney General, will present evidence to the court explaining why they believe the property is bona vacantia. The court will also hear the arguments from the claimant. If the claimant is successful in establishing that the property is not bona vacantia, a vesting order will be made against the Attorney General.
Any applications dealing with property in Scotland are referred to The Queen’s and Lord Treasurer’s Remembrancer If the property is in the Duchy of Cornwall or Lancaster, then the Attorney General for the appropriate Duchy will deal with the matter.
The claimant is required to pay the costs of the Attorney General whether the application is successful or not.
The claimant will also have to pay any costs incurred to the Treasury Solicitor in dealing with the property up to the date of the vesting order.