Randhawa & Anor v Turpin & Anor [2016] EWHC 2156 (Ch)

[2016] EWHC 2156 (Ch)Case No 8446 of 2013IN THE HIGH COURT OF JUSTICEVenue CHANCERY DIVISION BIRMINGHAM DISTRICT REGISTRYIn the Matter of BW ESTATES LIMITED And in the Matter of the INSOLVENCY ACT 1986Priory Courts33 Bull StreetVenue Birmingham B4 6DSDate 22 nd July 2016
Before
HIS HONOUR JUDGE PURLE, QC(Sitting as a Judge of the High Court)
Between
GURSHARAN RANDHAWA AND SUKHINDER RANDHAWAApplicant1st and 2ndApplicantANDREW TURPIN AND MATTHEW HARDYRespondent1st and 2ndRespondentGURSHARAN RANDHAWA AND SUKHINDER RANDHAWA 1 st and 2 nd Applicants and ANDREW TURPIN AND MATTHEW HARDY 1 st and 2 nd Respondents
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MR. W. EDWARDS (C) instructed by Tenet Compliance & Litigation Ltd. appeared for Applicants.MR. M. WEAVER (C) instructed by Cameron Legal appeared for Respondents.

JUDGMENT APPROVED

JUDGE PURLE:

[1]The Applicants are Judgment creditors, and have been since November 2012, in the sum of £2.4 million approximately of a Mr. Robert Williams.[2]Mr. Robert Williams was found to be the beneficial owner of at least 75 per cent of the issued share capital of BW Estates Limited (“the company”) registered (at the time) in the name of his son, Mr. David Williams. The Applicants obtained a Charging Order over that beneficial interest. It is probable that Mr. Robert Williams is or was also beneficial owner of the remaining 25 per cent. He also became bankrupt following the judgment against him.[3]Having obtained a Charging Order over the 75 per cent of the shares, subsequently in June of last year, by agreement with the Trustees in Bankruptcy of Mr. Robert Williams, the Applicants acquired full legal title to the shares. They, therefore, are the 75 per cent shareholders and are now in control of the company. Mr. David William executed stock transfer forms to transfer his bare legal title to the Applicants.[4]Formerly, the company was or was purportedly in administration. Mr. Robert Williams was a disqualified director and, although the evidence strongly indicates that he was in reality in control of the company, the sole de jure director from 2009 onwards was Mr. David Williams, who as I have said is Mr. Robert Williams’ son.[5]As sole de jure director, Mr. David Williams made what purported to be a directors’ appointment of administrators following a purported meeting of the directors of the company which took place on the 28th August 2013, the appointment finally being made on the 11th September 2013.[6]It is said that the board meeting resolving to proceed in that way was inquorate because under the Articles of Association of the company, a sole director had power merely to convene a general meeting or appoint an additional director. Subject to that, the requisite quorum for a directors’ meeting was two. There is no doubt that as a statement of fact that is a correct description of what the Articles said.[7]In addition, the quorum for a shareholders’ meeting was also two.[8]Belvedere Investment Company Limited (“Belvedere”) was an Isle of Man corporation which was dissolved in October 1996. It became, in succession to Mrs. Williams (the wife of Mr. Robert Williams) the registered shareholder of the remaining 25 per cent of the shares. As, however, it was dissolved, there was no- one who could in practice exercise any of the voting rights attached to the shares.[9]In a judgment given on the 2nd March 2015 (“the Cooke judgment”) in previous proceedings between the same parties, Judge Cooke noted the administrators’ appointment on the 11th September 2013 and the fact that the appointment was made by Mr. David Williams as director, without any application to the Court. The Cooke judgment also recorded that the Applicants “do not now contend that the appointment of the administrators was invalid”.[10]The issue before Judge Cooke related to the administrators’ remuneration. The Applicants brought that application as creditors of the company, having acquired by assignment in July 2014 the debt formerly owed by the company to its solicitors, Lewis Onions. As such creditors by assignment they had standing to challenge the remuneration within the administration.[11]Prior to the Cooke judgment, the same Judge on the 21st May 2014 dealt with two applications, one by the administrators for directions and one brought by the Applicants as interveners. The upshot was that Judge Cooke directed that the administrators convene a meeting of creditors and present revised proposals to bring the administration to an end and pass control back to the directors. Mr. David Williams had by the time of that meeting been removed as a director and the Applicants appointed in his place, so that the company was now under the Applicants’ control. An order in the Applicants’ favour for their costs of the administrators’ application for directions to be paid as part of the costs of the administration was also made.[12]The order made following the Cooke judgment of March 2015 is under appeal. Judge Cooke directed an assessment of the administrators’ remuneration, whereas the Applicants were seeking a direction that the administrators should have no or a substantially reduced remuneration because (it was said) the administrators had not done a satisfactory job and had not earned any remuneration, or remuneration of the order claimed.[13]In advancing those contentions, the Applicants scrutinised in detail the entirety of the conduct of the administration, including the circumstances in which the administrators came to be appointed and how they came to conclude, which was a pre-condition of their appointment, that the administration purpose was likely to be achieved. Criticisms were made about that. Those criticisms are not for me. They were for Judge Cooke to consider and may hereafter be considered by the Court of Appeal.[14]What is striking, and relevant to what I have to decide, is that there was ultimately no challenge to the administration as such.[15]The Applicants before me have changed tack and are now seeking in effect to produce the result they always wanted, which is to disentitle the administrators to remuneration, but by a different route.[16]My instinctive reaction, I am bound to say, is that this smacks at best of an abuse of process. I say “at best”, because it seems to me also that, strictly speaking, the decisions of Judge Cooke, one of which is under appeal, but the other of which, the decision of 21st May 2014, is not, create issue estoppels. They proceed on the basis that the administrators were validly appointed, and costs order were made, including one in the Applicants’ favour, on that basis.[17]Apart from issue estoppel, the Applicants have the difficulty of persuading the court that they should be allowed now to present an argument which was open to them but which they did not previously pursue. It is that element which smacks of abuse, as a party is normally expected to advance all of his case as a whole and not in separate instalments.[18]Accordingly, it seems to me that the Applicants face an enormous hurdle on those grounds alone. However, that has not been the principal basis upon which the Court has heard argument.[19]Mr. Weaver for the former administrators or purported administrators, however one chooses to describe them, contends that as Mr. David Williams had since 2009 been operating as sole de jure director, conducting the entirety of the business of the company, that operated as a variation of or departure from the Articles authorising a sole director to do everything which a board of two directors might do. Factually, that is well-founded and it appears to have been the approach also of Mr. Robert Williams.[20]The Applicants’ case has always been that Mr. Robert Williams was the person calling the shots and therefore the person in accordance with whose directions Mr. David Williams as sole de jure director was accustomed to act, even during the period of Mr. Robert Williams’ disqualification.

Judge Cooke in paragraph 3 of the Cooke Judgment said this:

[21]“It is the Applicants’ position that Mr. Robert Williams has, however, continued to be the effective controlling mind and director of the company throughout”.[22]There can be little doubt that the appointment of administrators in September 2013 occurred with the full consent or acquiescence of Mr. Robert Williams. True it is that the formal documents were executed by Mr. David Williams and that the meeting records him alone of the directors as being present on 28th August 2013. Also present at that meeting, I should mention, was a representative of the solicitors for the company (from whom the Applicants derive their status as creditors) and a representative of the administrators’ firm, as well as (by telephone) one of the administrators, but not Mr. Robert Williams.[23]Nonetheless, there was, as late as the 19th July 2013, a meeting to discuss the financial positon of the company and what should be done, attended by Mr. Robert Williams, along with one of the administrators (Mr. Turpin), the same representative of the company’s solicitors, and Mr. David Williams. At that meeting the prospect of administration as a likely eventuality was raised. The meeting concluded, according to a contemporaneous note of Mr. Turpin: “It is considered appropriate to place the company into administration, to take control of the company’s affairs and protect the interests of all creditors generally”.[24]Accordingly, there is no doubt that Mr. Robert Williams informally approved of the process. It may also be said that as a de facto director, his approval cured any deficiency in the process, there being in reality two directors, as required by the Articles, not one. It is however impossible for me to reach that conclusion, because Mr. Robert Williams was disqualified and therefore incapable of acting in law or under the Articles as a director. The quorum requirement of two directors cannot in my judgment include as a matter of construction of the Articles a director who is disqualified from acting as such.[25]However, I do see great force in Mr. Weaver’s submission that the conduct of Mr. Robert Williams from 2009 onwards as a beneficial shareholder operated as an acquiescence by all the relevant shareholders, sufficient to bind the company under the Duomatic principle. There was also acquiescence by Mr. David Williams as the registered shareholder of 75% of the shares. He was in fact the sole registered shareholder at the material time, given Belvedere’s dissolution.[26]There was also available to Mr. Weaver an alternative submission, though he said he did not need to advance it, namely that by acquiescing, as Mr. Robert Williams clearly did in the actual appointment of an administrator by a sole director, what Mr. Robert Williams was doing as shareholder was effectively passing a special resolution informally, authorising or requiring the sole director, notwithstanding the Articles, to make an appointment acting alone. The same could be said of Mr. David Williams, acting as sole registered shareholder, following Belvedere’s dissolution.[27]That alternative submission is, of course, within the ambit of the broader submission advanced by Mr. Weaver that Mr. David Williams as sole director had by shareholder acquiescence had full powers of the board since 2009. Mr. Weaver does not need the alternative submission if the 2009 proposition is correct.[28]In my judgment, Mr. Weaver is correct in submitting that from 2009 onward there was a consistent course of conduct under which Mr. Robert Williams (and Mr. David Williams himself) informally sanctioned the exercise of all the directors’ powers by one director alone which thereby operated as an informal amendment to or variation of the Articles. On that footing, the appointment of administrators was valid.[29]This, however, requires consideration of the application of the Duomatic principle, named after the decision of Buckley J in In re Duomatic Ltd. [1969] 2 Ch. 365. That case concerned 2 classes of shareholders: ordinary shareholders with a right to vote and preference shareholders with no right to vote. Mr. Justice Buckley held that it was sufficient for all the voting shareholders to reach unanimous agreement in order to bind the company to some matter which a general meeting could carry into effect. The agreement of the non-voting shareholders was not necessary.[30]In the present case, there is no distinction between voting and non-voting shareholders. However, there is a distinction between 75 per cent of the shares, indubitably beneficially owned by Mr. Robert Williams and registered in the name of Mr. David Williams, and the 25 per cent of the shares registered in the name of the Isle of Man company, Belvedere.

Judge Cooke considered the position of Belvedere in the Cooke judgment and said this:

[31]“According to its accounts, at some point in 1988-9, Mrs. Willliams’ shares were transferred to Belvedere Investment Company Limited, a company incorporated in the Isle of Man with No. 014735C. There are no documents to show who was behind that company, but it is assumed to be Mr. Robert Williams. Belvedere Investment Company Limited was, however, dissolved on 23rd October 1996, but any assets it held would have vested in the Crown as bona vacantia”.[32]October 1996 is over 19 years ago, and subsequent enquiries have revealed no trace of anything material in the Isle of Man relating to Belvedere. Also in the Cooke judgment, Judge Cooke went on to note that the company’s accounts showed a liability to Belvedere Investments or Belvedere Investment Company. Some doubt seems to have existed as to whether that was the same entity as the Isle of Man entity. The company’s auditors do not appear to have looked into the matter properly, though Mr. Robert Williams at one point informed the administrators orally that Belvedere was charging a management fee of £15,000 per annum but had never collected payment.[33]As Judge Cooke also recorded, Mr. Robert Williams professed to know little about Belvedere, concluding that “since he was running the company it seems unlikely that any third party management services would have been provided without his knowledge. So the probability must be that Belvedere is either entirely fictitious or some alter ego for Mr. Robert Williams”. Judge Cooke must be speaking there of the Belvedere supposedly carrying out management services, notwithstanding its dissolution, which could not be the same as the dissolved Isle of Man entity.[34]However, the reasoning leading to the finding that Belvedere was either fictitious or an alter ego for Mr. Robert Williams must apply, as regards the alter ego point, to the dissolved Isle of Man entity as well. The Isle of Man company was certainly not a fiction. Everyone agrees that it existed but has now been dissolved. So the probability is, as appeared to be almost common ground before me, that the Isle of Man Belvedere was an alter ego for Mr. Robert Williams, who is therefore beneficially entitled to its 25% shares, subject to restoration to the register, which may now of course be far too late.[35]How, therefore, does that leave the Duomatic principle? As I have said, there is no doubt that Mr. Robert Williams acquiesced in Mr. David Williams exercising in an unrestricted way all the powers of the Board, notwithstanding the apparent lack of a quorum, and there is no doubt also that he acquiesced in the actual appointment of administrators. He was not at the meeting which authorised it, but he stood by knowing it would happen and never objected then, before or afterwards. Nor for that matter did any of the creditors object then, before or afterwards until these proceedings were brought. The only creditor objection now is from the Applicants, whose status as creditors is based upon the assigned debt, which was a debt owed to a firm of solicitors whose representative was actually at the meeting and went along with what took place, though no doubt acting not as creditors but as solicitors endeavouring to ensure that everything was in order.[36]As I have said, in the Duomatic case, the competition was between voting and non-voting shareholders. It was held that the consent of voting shareholders alone is sufficient to trigger the Duomatic principle. In the case of a shareholder who dies or is made bankrupt, standard Articles contain provisions enabling the Trustee in Bankruptcy or the personal representatives to enjoy the rights, sometimes the voting rights too, of the former deceased or bankrupt shareholder. There is however no provision enabling a dissolved corporate shareholder to vote. Only a registered member could vote under this company’s articles. In those circumstances, no-one could have voted Belvedere’s shares, because Belvedere did not exist and no-one else was on the register in its place.[37]The Crown in right of the Isle of Man could not have voted the shares, because it was not a registered shareholder, nor could Mr. Robert Williams, because he was not a registered shareholder either. He was the ultimate beneficial owner and might conceivably have obtained a vesting order against the Crown in right of the Isle of Man and then taken steps to have himself registered. He did none of those things and as, following Belvedere’s dissolution, there was in fact no registered shareholder in respect of the 25% shareholding, Belvedere could not therefore have voted or been entitled to vote those shares. If that is correct (as I think it is) the acquiescence or consent of the 75% shareholder alone (Mr. David William as registered shareholder or Mr. Robert Williams as beneficial owner) ought in my judgment to be sufficient to trigger the Duomatic principle. As they both acted in agreement with each other, I need not, as between those two, decide whether what matters is beneficial ownership or being on the register as a bare trustee for a sole beneficiary. In a case where there is only one beneficial owner and the registered holder is a bare trustee bound to act in accordance with the beneficial owner’s directions, there is much to be said for the view that the wishes of the beneficial owner are those that count, as the registered holder has no say in the matter.[38]It may therefore be that the acquiescence or consent of the ultimate beneficial owner is sufficient to trigger the Duomatic principle, as was assumed (without the point being decided) in Rolfe -v- Rolfe, [2010] EWHC 244 2 BCLC 525 at [43].[39]It may also be said that, where there are voting shares which cannot be voted because of some disqualifying feature affecting the person named on the register (as here, where that person no longer exists) the acquiescence or consent of the beneficial owner is still sufficient (and may be required) for Duomatic purposes. I have already expressed the view that the acquiescence of the 75% shareholder is in those circumstances sufficient. I doubt therefore whether it is necessary to go further than that but, if it is, the requirement of unanimous consent is satisfied because the beneficial owner (Mr. Robert Williams on my findings) of all the voting shares did acquiesce both in the exercise of the board’s powers by the sole director and in the impugned appointments, as of course did Mr. David Williams as registered shareholder of 75% of the shares. There being no registered shareholder in respect of the 25%, only the beneficial owner can count, if it is necessary to look beyond the 75% at all.[40]It is said against that that there is no evidence that Mr. Robert Williams assented in his capacity as beneficial owner (or, I suppose, that Mr. David Williams assented as shareholder). However, the Duomatic principle is very flexible and does not require people to assume any particular capacity: see Re Express Engineering Works Limited, [1920] 1 Ch. 466, where the headnote summarises the relevant position:
“Although the meeting was styled a directors’ meeting, all the five shareholders were present. And they might well have turned it into a general meeting and transacted the same business. In these circumstances the issue of the debentures was not invalid.”
[41]What that case supports is the proposition that the corporators need not specify themselves as acting in any particular capacity, and may even specify the incorrect capacity, as long as they all agree. They were able, whatever they might call themselves, to waive technicalities and meet together and make any contract they chose, a principle which the Court of Appeal noted was supported by Salomon v Salomon [1897] AC 22, 57, which established that a company is bound in a matter which is intra vires by the unanimous consent of all the corporators. What is more, it is clear from cases such as Parker & Cooper Limited -v- Reading, [1926] Ch. 975, that assent given on separate occasions is also sufficient for this purpose.[42]In the present case, if it is right to regard the shareholders entitled to vote as having been two, (Mr. David Williams as registered holder of the 75% holding and Mr. Robert Williams as beneficial owner entitled to direct the voting of the remaining 25%) both of whose consents were required, then there is no problem, because under the Articles for this company a shareholders’ meeting was sufficient if two people were present, so that the informal consent of both should be sufficient, even though no formal shareholders’ meeting took place. If, however, following the dissolution of Belvedere in the Isle of Man, there was only one relevant shareholder entitled to vote, as I am inclined to think is the case, then it still seems to me that the principle that the voting members can bind the company unanimously, waiving all formalities, would apply, because the shareholders could waive the quorum requirements in the Articles, just as they could (say ) have transferred one of the shares to a nominee for the purposes of a formal meeting.[43]If, as the authorities establish, not even a meeting is necessary at which all are present, as in Parker & Cooper -v- Reading, then it is difficult to see why that non-meeting should be subject to any formal requirements, whether as to quorum or otherwise, as manifestly there cannot have been a quorum at a meeting which did not take place.[44]Accordingly, it seems to me that there has been an effective variation or departure from the Articles, either in the broad sense indicated by Mr. Weaver since 2009 onwards, or in the narrow sense of authorising or requiring Mr. David Williams to put the company into administration. Either way is sufficient to defeat the claim in this case.[45]I was also referred to the decision in Re Bailey, Hay & Co Limited [1971] 1 WLR 1357, a decision of Brightman J. That case is particularly pertinent because it touched upon the validity of a winding up. What happened is that short notice was given before the meeting resolving upon the winding up. The meeting was, however attended by all five corporators, and the resolution passed by the votes of two shareholders who between them held 500 shares. Two other shareholders, who together held 300 shares, deliberately abstained from voting and refrained from casting the 200 votes of an associated company, which they controlled.[46]About 3½ years later the liquidator issued an originating summons claiming that the associated company had received a fraudulent preference. As a defence to that claim, the associated company disputed the validity of the liquidation, and the status of the liquidator for the first time was challenged. It was held by Brightman J. that the resolution must be deemed to have been passed with the unanimous agreement of all the companies’ corporators and that those who abstained from voting must be treated as having acquiesced, by their conduct both at the meeting and subsequently, in the company being wound up voluntarily on that day.[47]It seems to me that this approach applies equally to the present case. All those interested in the share capital of the company, which I have hitherto assumed to be Mr. Robert Williams as beneficial owner, and his son Mr. David Williams as registered holder of 75% of the shares, allowed the company to be put into administration knowing it was happening or had happened. Even if Mr. Robert Williams was not the beneficial holder of the shares held by the Isle of Man company, whoever was behind that Isle of Man company did nothing to restore it since 1996 and has plainly been content to let the remaining 75 per cent shareholder run the company as he wishes with the director or directors of his choice, and cannot now be taken to have done anything other than acquiesce in all that was done, including the appointment of administrators.[48]Accordingly, even upon that footing, there has been full acquiescence. In addition, in the Re Bailey, Hay & Co case, Brightman J. held that the associated company was debarred by laches from asserting that the company was not and never had been in liquidation. This was so notwithstanding that no equitable relief was sought.[49]In the present case, discretionary relief is sought in the form of a declaration of invalidity. It is also recognised in Mr. Edwards’ skeleton argument, in paragraph 34, that “in consequence, it will be necessary to unwind the entire course of the administration, including the orders previously made, on the mistaken footing that the company had validly and effectively entered into administration”.[50]Even had I thought that Mr. Weaver could not surmount the hurdle of the initial inquorate meeting, I would not have been attracted to that course.[51]As I have said, the application, coming at this stage, smacks of abuse, and I would, as a matter of discretion, neither grant the declaratory relief sought, nor be minded to set aside the orders that have already been made, one of which is under appeal and the other of which is not. No sufficient reason has been advanced for the point not to have been taken previously in the context of the earlier application to disallow remuneration. It seems to me quite wrong that the Applicant should have a second bite of the cherry in these proceedings.[52]I gain further comfort from that by consideration of the decision of Harman J. in Re Home Treat Limited, [1991] 1 BCLC 705. The headnote sets out the following:
“The consent of all the members of the company was as good as a special resolution. An acquiescence by shareholders with knowledge of the matter was as good as actual consent”
. That, of course, is similar to Bailey, Hay & Co.[53]Harman J. also went on to hold (at page 710) that the shareholders (Mr. and Mrs. Monahan) would have no right to object to it because they were either expressly estopped by their own act, as Mrs. Mohanan was by her own certificate, or by conduct, as her husband, Mr. Mohanan, appeared likely to be.[54]It seems to me that any shareholder - and whether that is Mr. David or Mr. Robert Williams does not matter, as they are in the same position - would be estopped by their own acts and conduct as against the administrators, who took office upon the faith of what they brought about or allowed to happen, and that Mr. Edwards’ clients, claiming as successor shareholders through them can be in no better position. Likewise, the Applicants cannot as creditors be in a better position than Lewis Onions, through whom they claim as assignees of their debt, as they (Lewis Onions) were present at the meeting of 28th July and must have advised on or at least acquiesced in the course which was taken. They could not, it seems to me, themselves be heard to say that the process they indorsed was ineffective. It seems to me, therefore, that the Applicants as creditors are in no better position than Lewis Onions either. In addition, and quite independently of anything done by their predecessors as shareholders and creditors, there is the Applicants’ own conduct in participating in proceedings premised on the basis of valid appointments.[55]No creditor, as I have said, challenged the administration, notwithstanding the production of the requisite administrators’ report and proposals at an early stage, until these proceedings, and these proceedings have only been brought on the back of a failed application to challenge the remuneration in other ways.[56]I do not say that the Applicants knew that this was a valid ground of objection at the time of the Cooke judgment. I could not reach that conclusion without cross-examination, and there has been none. They say that a subsequent review of the papers alerted them to the legal consequences which they now seek to assert in this present application. This seems likely to be true, as the point would surely have been taken had it been spotted earlier.[57]However, the facts were staring them in the face. The Cooke judgment recorded that the appointment was by the sole director. In addition, the Memorandum and Articles of Association of the company are a matter of public record.[58]It seems to me, therefore, that whether the argument is advanced on the basis of estoppel, laches or acquiescence, the Applicants are barred from claiming the relief they seek.[59]The modern approach to laches, acquiescence and estoppel is to be found in the decision of the Court of Appeal in Re Loftus (Deceased) [2007] 1 WLR 191. It is clear from that case that the enquiry is a broad one. The question is whether in all the circumstances it would be unconscionable for a party to be permitted to assert his rights.[60]As was said at [42], “The modern approach to the defences of laches, acquiescence and estoppel was considered by this court in Frawley v Neill, The Times 5 April 1999, to which reference was made in the judgment of Mummery LJ in Patel v Shah [2005] EWCA Civ 157 at [32]. After reviewing the earlier authorities - and, in particular, observations in Lindsey Petroleum v Hurd (1874) LR 5 PC 221, 229, and Erlanger v New Sombrero Phosphate Company (1878) 3 App Cas 1218 at 1279 - Aldous LJ, with whom the other members of the court agreed, said: ‘In my view the more modern approach should not require an enquiry as to whether the circumstances can be fitted within the confines of a preconceived formula derived from earlier cases. The enquiry should require a broad approach, directed to ascertaining whether it would in all the circumstances be unconscionable for a party to be permitted to assert his beneficial right. No doubt the circumstances which gave rise to a particular result in the decided cases are relevant to the question of whether or not it would be conscionable or unconscionable for the relief to be asserted, but each has to be decided on its facts, applying the broad approach’.”[61]Applying that broach approach here, it would, in my judgment, be unconscionable to allow the Applicants to challenge the appointments, claiming as they do through others, whether creditors or shareholders, who brought about or acquiesced in the very state of affairs of which complaint is now made.[62]In addition, and quite independently of the actions of their predecessors as creditors and shareholders, it would also be unconscionable to allow the Applicants to assert the invalidity of the appointments in response to their previous failed application to challenge the administrators’ fees upon the footing that the appointments were valid, and in which they obtained directions and costs orders which could not have been made on any other basis. If the point they now take was going to be taken, it should have been taken much earlier.[63]Accordingly, the application is dismissed, on any footing.