Davy v Pickering & Ors [2015] EWHC 380 (Ch)

“One example of the use of this limb is in inserting in the order a provision that in the case of creditors who were not statute-barred at the date of dissolution, the period between the date of dissolution and the date of restoration to the register is not to be counted for the purposes of any Statutes of Limitation: see, for example, Re Donald Kenyon Ltd [1956] 1 W.L.R. 1397.Such a direction seems to me to effectuate the general purpose of the concluding limb of the subsection. If a creditor had six years in which to sue the company, and his time ran out after the company had been defunct for five years, he would have had only one year in which he could effectually have sued the company. He may justly say that he ought not to have been deprived of five years. He cannot have the precise five years which he has lost, but he can be given another five years by way of replacement. This will put him ‘in the same position as nearly as may be as if the name of the company had not been struck off’. I may add that Re Huntingdon Poultry Ltd [1969] 1 W.L.R. 204 shows that such a provision will be inserted in the order only if sufficient grounds for doing so appear, and not as a matter of routine …”

“[44] First, the words ‘general effect’ in section 1032(1) cannot be read … as cutting down the otherwise unrestricted language of the subsection. The significance of these words is to signal that the ‘general’ provision in section 1032(1) is subject to what follows in sections 1032(2) and 1032(3). … [46] Third, the sweeping effect of section 1032(1) is illustrated by section 1032(3), which enables the Companies Court to make directions ‘for placing the company and all other persons in the same position (as nearly as may be) as if the company had not been dissolved or struck off the register’. That, as it seems to me, is a powerful and illuminating indication of the policy which Parliament had in mind. As Sir Raymond Evershed MR observed in Tyman’s Ltd v Craven [1952] 2 QB 100, 111, of the corresponding provision in section 353 of the 1948 Act, these words ‘seem to me designed, not by way of exposition, to qualify the generality of that which precedes them, but rather as a complement to the general words so as to enable the court (consistently with justice) to achieve to the fullest extent the ‘as-you-were position’, which, according to the ordinary sense of those general words, is prima facie their consequence.’”

“[S]ome sensible content must be given to the final words of the subsection, and this problem at first seemed to me to create a difficulty in the company’s way. Without, however, attempting to define the scope of the words exhaustively, counsel for the company was able to give instances in answer to the question put to him. During the period of the company’s suspended animation the company, as well as third parties, might well have abstained from taking those steps—a step in the action, or the exercise of some contractual right—for which the proper time might have in the meantime expired. In my judgment, the final words of the subsection can properly and usefully be regarded as intended to give to the court, where justice requires and the general words would or might not themselves suffice, the power to put both company and third parties in the same position as they would have occupied in such cases if the dissolution of the company had not intervened. More generally, the final words of the subsection seem to me designed, not by way of exposition, to qualify the generality of that which precedes them, but rather as a complement to the general words so as to enable the court (consistently with justice) to achieve to the fullest extent the ‘as-you-were position’, which, according to the ordinary sense of those general words, is prima facie their consequence.” ‘seem to me designed, not by way of exposition, to qualify the generality of that which precedes them, but rather as a complement to the general words so as to enable the court (consistently with justice) to achieve to the fullest extent the ‘as-you-were position’, which, according to the ordinary sense of those general words, is prima facie their consequence.’”

“89. Although, for reasons given earlier, I have concluded that there is jurisdiction to give a limitation direction in favour of the company being restored, the scope for giving such a direction must in my judgment be extremely limited. To my mind the jurisdiction ought only to be exercised in exceptional circumstances. My reasons for this conclusion are as follows. 90. So far as I can see, the question whether a limitation direction should be given in favour of the company being restored to the register can only arise in circumstances where the company has an asset in the form of a claim based on a cause of action which was not statute-barred at the date of dissolution. The 1980 Act provides a detailed limitation regime under which, in certain specified circumstances, the running of time may be postponed (see, e.g., ss. 14A, 32 and 33). The effect of a limitation direction under section 65(3) is completely to override that regime. Whilst considerations of essential fairness may justify the giving of a limitation direction in favour of third party creditors (as they did, for example, in Donald Kenyon), the same cannot so readily be said of a limitation direction in favour of the company being restored to the register: indeed, on the face of it, fairness will generally require that the company, like any other claimant faced with a limitation defence, should be left to attempt to meet that defence by recourse to the statutory regime in the 1980 Act. 91. In the instant case, I cannot discern any such exceptional circumstances as might serve to justify the limitation direction …”

“At the date of the dissolution those creditors whose debts were not already statute-barred could have stopped the period of limitation running against them by issuing, and perhaps serving, a writ. Counsel said that after the dissolution a creditor could have applied to have the name of the company restored to the register and then have issued his writ. It seems to me, however, that, when a company has been dissolved and, therefore, nobody can sue it without having its name restored to the register, it is only common fairness that, if the contributories for purposes of their own want to have the company’s name restored to the register years later, the period between the dissolution and the date of the restoration should be disregarded for the purposes of the statutes of limitations. I do not think that counsel really suggested that by doing this I was violating the Limitation Act 1939. He did suggest that I was violating the policy of that Act but, with all respect to him, this case does not seem to have been envisaged by that Act at all. … Common justice requires that some such provision as that which I have suggested should be inserted. … It is, I think, true to say that I am giving perhaps some slight benefit to the creditors as against the company, but it will be observed that s. 352(6) says ‘as nearly as may be’, contemplating that the precise equation may be unattainable. In my judgment, I am much nearer precise equation if I put some stipulation in the order than I should be if I did not.”