Seb Oram (instructed by Clarke Willmott ) for the claimant; Guy Adams (instructed by Capital Law ) for the first, second and fourth defendants.
The company had been struck off the register of companies and dissolved. By a Part 8 claim form the claimant applied for the restoration of the company to the register of companies pursuant to section 1032 of the Companies Act 2006. He also sought directions pursuant to section 1032(3). District Judge James subsequently made an order for the restoration of the company to the register, but he adjourned consideration of the directions that ought to be made in conjunction with the restoration of the company. The claimant asserted that he had a claim for damages against the company, arising from what he said was negligent investment advice given to him by the company prior to it being struck off the register. In order to preserve his position against any argument that his claim was statute-barred on account of an earlier date of relevant knowledge, the first direction that he sought (“the limitation direction”) was: “That the period between the striking off of the company and the making of the order for restoration is not to count for the purposes of any enactment, including the Limitation Act 1980, as to the time within which proceedings against the company must be brought.” By itself, however, that direction would not improve the claimant’s position, because the company had neither assets nor the benefit of insurance cover. The claimant alleged that, within the period of two years preceding the dissolution of the company, its assets were distributed to the shareholders, the first and second defendants, although they had reason to be aware that claims such as that which the claimant wished to advance might lie against the company. In order to restore those assets to the company and render it capable of compensating him, he wished to obtain an order for the winding up of the company, so that the liquidator could make use of the transaction-avoidance provisions in the Insolvency Act 1986. As things stood, however, it was too late to make use of those provisions, because any winding up petition would have had to be presented within two years of the relevant transactions. Accordingly the claimant sought a further direction (“the petition direction”): “That if the claimant shall petition for the winding up of the company within 14 days of the making of this order the petition shall be deemed to have been presented on 20 March 2012.”
Application for directions allowed. Prior case law had not made it a requirement that it be shown that the party gaining the benefit of the limitation direction would otherwise have commenced proceedings within the limitation period. The authorities also certainly did not suggest that the discretion under section 1032(3) could properly be used for any purpose other than to put persons “in the same position (as nearly as may be) as if the company had not been dissolved or struck off the register”. The notion that the discretion might, untrammelled by that purpose, be used generally as a means for achieving some kind of justice merely because the claimant had suffered losses and the defendants would otherwise avoid compensating him was too broad and gained no support. However, in the circumstances of this case, both the limitation direction and the petition direction would be made.
Companies Act 2006, s 1032
Limitation Act 1980, s 14A