Blenheim Leisure (Restaurants) Ltd and Others v The Registrar of Companies
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nourse,Lord Justice Aldous,Lord Justice Tuckey |
| Judgment Date | 26 July 1999 |
| Judgment citation (vLex) | [1999] EWCA Civ J0726-18 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CHANI 1999/0393/3 |
| Date | 26 July 1999 |
[1999] EWCA Civ J0726-18
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
(Mr Justice Hart)
Royal Courts of Justice
Strand, London WC2
Lord Justice Nourse
Lord Justice Aldous and
Lord Justice Tuckey
CHANI 1999/0393/3
In The Matter of Blenheim Leisure (Restaurants) Limited And In The Matter of The Companies Act 1985
MR C FREEDMAN QC (instructed by Messrs Amhurst Brown Colombotti, London SW1) appeared on behalf of the Appellants.
MR M WARWICK (Mr S Boyd 26.7.99) (instructed by Messrs Jeffrey Green Russell, London W1) appeared on behalf of the Respondent.
Monday, 26th July 1999
This appeal raises an important question on the practice of the Companies Court, which can best be introduced by reading from the judgment of Hoffmann LJ in Stanhope Pension Trust Ltd v. Registrar of Companies [1994] 1 BCLC 628, 630:
"A company is a legal person whose existence is bounded by events analogous to the birth and death of a natural person. It can come into existence by, amongst other things, registration under the Companies Act 1985. It will cease to exist upon, among other things, dissolution after the winding up of its affairs under the Insolvency Act 1986. In the case of a company which has been voluntarily wound up, dissolution ordinarily occurs three months after the liquidator's final account and return has been registered.
Unlike a natural person, however, a company which has ceased to exist may be restored to life. In the case of a company dissolved after winding up, the court has power under section 651 of the Companies Act 1985 to declare the dissolution to have been void."
That was a case where the application was made under section 651 of the 1985 Act. Another event upon which a company will cease to exist is dissolution on its name being struck off the register by the Registrar of Companies (usually for a failure to deliver accounts or make annual returns) and the publication of notice thereof in the Gazette pursuant to section 652 of the 1985 Act. In such a case the court has power under section 653(2) to restore the company's name to the register. A third event, comparable to the second, is dissolution after an application by a private company to the Registrar of Companies for its name to be struck off the register pursuant to section 652A, usually on the ground that it has ceased to trade and is no longer needed. In such a case the court has power under section 653(2B) to restore the company's name to the register. This appeal concerns an application for an order under that subsection. The question, stated in its broadest terms, is whether, on an application under sections 651, 653( 2) or 653(2B), a person other than the applicant and the Registrar of Companies and, in the case of an application under section 651, the former liquidator of the company may be joined as a party.
Just as the coming into existence of a company by registration under the Companies Acts is an administrative process, so too, it might be thought, would be its restoration to life after it has been dissolved. But it is not quite as simple as that. A company which has existed and ceased to exist cannot be treated as if it had never existed at all. For one thing, its restoration to life will or may affect the rights of the Crown to bona vacantia under section 654 of the 1985 Act. For another, the Registrar of Companies may have good grounds for objecting to the restoration. So a company can only be restored to life by an order of the court, for which purpose the court must be satisfied that it is just to make the order. In spite of that, it remains the case that in dealing with applications under sections 651, 653(2) and 653(2B) the court performs an essentially administrative function.
Thus in Re Portrafram Ltd [1986] BCLC 533, 534, Harman J, an experienced judge of the Companies Court, described applications under section 653(2) as follows:
"Such applications are usually determined in chambers and are usually conducted by the applicant on the one side and the Treasury Solicitor on behalf of the Registrar of Companies on the other side. They are proceedings which do not, on the face of them, lead to the determination of any issue at all. They are a curious form of quasi-administrative proceedings whereby the court, on being satisfied of various matters, exercises a power given by Parliament to resuscitate by restoration to the register, a company which is then, by Act of Parliament, deemed to have continued to exist at all times. No orders are made in favour of any person for money, declarations of right, injunctions or other substantive relief of any sort at all. The applications are regularly and frequently made and are habitually decided without the intervention of any extra person."
Similarly, in Steans Fashions Ltd v. Legal and General Assurance Society Ltd [1995] 1 BCLC 332, 335, I myself referred to an application under section 653(2) in this way:
"While not suggesting that such an application is a formality, far less that success is a foregone conclusion, I rely on my own experience as a judge of the Companies Court for believing that the practice is to make the order if a real advantage will accrue to the contributories or creditors of the company from its revival and if all defaults are remedied, the costs of the Registrar of Companies are provided for and the Treasury Solicitor has stated that no objection is taken on behalf of the Crown in right of bona vacantia; see also the notes to the predecessor provision to sections 652 and 653, section 353 of the Companies Act 1948 in Buckley on the Companies Acts (14th edn, 1981) vol. I, p. 808, under the heading: 'Going company'."
I should add that, except where a winding-up of the company is also sought, orders under 653(2) and (2B), like orders under section 651, are habitually made by the registrar of the Companies Court and not by the judge.
As will appear, section 652A and its associated provisions were not enacted until 1994. However, provisions similar to sections 651 and 653 are of long standing in the companies legislation. I have not traced the predecessor of section 651 further back than section 223 of the Companies (Consolidation) Act 1908, in which there were no provisions similar to sections 652 and 653. The latter provisions were introduced by section 295 of the Companies Act 1929, which was in the same form as section 353 of the Companies Act 1948, the immediate predecessor of sections 652 and 653. Notwithstanding their long history, counsel have been unable to find any reported decision before Re Portrafram Ltd in 1986 in which an application to intervene in proceedings under sections 651 or 653 or their predecessors has been made. Speaking from my own experience as a judge of the Companies Court between 1980 and 1985, I cannot remember one. I think it would have been assumed at that time that no such application could be entertained.
Against that background I turn to the facts of the present case. For reasons which will appear, it is necessary to state them in greater detail than would normally be necessary. Blenheim Leisure (Restaurants) Ltd ("the Company") was incorporated in 1988 under the name Blenheim Leisure Ltd. It assumed its present name in September 1994. Under two written management agreements made on or about 8th November 1991, the form and contents of which have not been made known to us, the Company entered into occupation of premises at 7/9 Swallow Street, London W1 known as Chaplins Club and of premises at 99/101 Regent Street, London W1 known as the Stork Club. Under an oral management agreement entered into in or about December 1995 the Company entered into occupation of premises also at 99/101 Regent Street known as the Crazy Horse Club. At all material times the leasehold owner of Chaplins Club and the Stork Club has been Oscar Manuel Owide and the leasehold owner of the Crazy Horse Club has been a company called Fordingstone Ltd. I will refer to Mr Owide and Fordingstone Ltd collectively as the Landlords. The Company claims that on entering into occupation of each of the three premises it became a subtenant thereof, the subtenancy being protected by part II of the Landlord and Tenant Act 1954.
Until the beginning of 1998 the directors of the Company and the shareholders therein were Simon Langer and Carlo Cura, who were also the liquor licence holders for the three clubs. In 1997 the Metropolitan Police brought licence revocation proceedings against Mr Langer and Mr Cura on the ground that two managers of the clubs had allowed various illegal activities to take place there, it is said without their knowledge. In September 1997 that application was withdrawn on condition that Mr Langer and Mr Cura gave undertakings to transfer the liquor licences to others and to take no part, directly or indirectly, in the administration, management or conduct of the clubs, or to permit Mr Owide to do so, for which purpose taking part directly or indirectly was defined to include being a director or shareholder in any company owning or operating the three clubs. In the result, the licences were transferred to others and on 4th February 1998 Nicholas Adamou and Cheun Ken Cho were appointed to be the directors of the Company in place of Mr Langer and Mr Cura, who transferred their shares therein to their respective wives, Helen Flora Langer and Yvonne Cura.
At this stage it is convenient to refer to some of the material provisions of the...
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