Graham Frank Davy v Brian Michael Pickering and Others
| Jurisdiction | England & Wales |
| Judge | H.H. Judge Keyser |
| Judgment Date | 19 February 2015 |
| Neutral Citation | [2015] EWHC 380 (Ch) |
| Docket Number | Claim No: 3CF30187 |
| Court | Chancery Division |
| Date | 19 February 2015 |
[2015] EWHC 380 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
CARDIFF DISTRICT REGISTRY
Cardiff Civil Justice Centre
2 Park Street, Cardiff, CF10 1ET
His Honour Judge Keyser QC
sitting as a Judge of the High Court
Claim No: 3CF30187
Seb Oram (instructed by Clarke Willmott) for the Claimant
Guy Adams (instructed by Capital Law) for the 1 st, 2 nd & 4 th Defendants
Hearing date: 30 January 2015
H.H. Judge Keyser Q.C.:
Introduction
On 20 March 2012 Heather Moor & Edgecomb Limited ("the Company") was struck off the register of companies and dissolved.
By a Part 8 claim form issued on 28 November 2013, the claimant, Mr Graham Davy, 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).
On 1 July 2014 District Judge James made an order for the restoration of the Company to the register. (Upon restoration the Company was given the new name 1000654 Limited, as its former name was no longer available.) But he adjourned consideration of the directions that ought to be made in conjunction with the restoration of the Company. That matter came before me on 30 January 2015.
Mr Davy asserts that he has a claim for damages against the Company, arising from what he says was negligent investment advice given to him by the Company in 2001. He also says that he first had the knowledge required for bringing an action for damages in respect of the relevant damage, for the purposes of section 14A of the Limitation Act 1980, when he received advice from another financial adviser on 19 July 2011. After the Company had been restored to the register, on 17 July 2014 the parties concluded a stand-still agreement in respect of the applicable limitation period. Mr Davy commenced a claim against the Company on 16 January 2015, which I am informed was within the currency of the stand-still agreement. However, in order to preserve his position against any argument that his claim is statute-barred on account of an earlier date of relevant knowledge, the first direction that he seeks ("the Limitation Direction") is:
"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 will not improve Mr Davy's position, because the Company has neither assets nor the benefit of insurance cover. Mr Davy says that, within the period of two years preceding the dissolution of the Company, its assets were distributed to the shareholders, Mr and Mrs Pickering, the first and second defendants, although they had reason to be aware that claims such as that which he wishes to advance might lie against the Company. In order to restore those assets to the Company and render it capable of compensating him, he wishes to obtain an order for the winding up of the Company, so that the liquidator can make use of the transaction-avoidance provisions in the Insolvency Act 1986. As things stand, however, it is 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 Mr Davy seeks a further direction ("the Petition Direction") as follows:
"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."
Mr and Mrs Pickering did not oppose the restoration of the Company to the register, but they do oppose the directions sought by Mr Davy.
I am grateful to Mr Oram and Mr Adams for their helpful submissions, to which I have had regard, though I shall summarise them only briefly.
The facts in more detail
The Company was incorporated in 1971. At all relevant times until 2010, Mr and Mrs Pickering were the two directors and the only personal shareholders in the Company (the other shareholder being the Company retirement scheme) and Mrs Pickering was the secretary of the Company. The Company carried on business in the financial services industry. Mr Pickering was actively involved in the advising of clients. Mrs Pickering was not so involved; she provided administrative services to the Company.
Mr Davy, who is now 65 years old, was employed as a pilot by British Airways ("BA"). He left BA's employment on 15 October 2001, and shortly thereafter he transferred £610,398 out of BA's occupational pension scheme and into a private pension plan. He says that he did so in reliance on negligent advice given by Mr Pickering on behalf of the Company in 2001 and that as a result he has suffered very significant loss.
It does not appear to be seriously in issue that Mr Davy suffered loss by reason of his decision to transfer out of the occupational pension scheme, but Mr and Mrs Pickering deny that any advice given by the Company was negligent, and they also deny that Mr Davy relied on any such advice. It is not for me to adjudicate on the merits of Mr Davy's claim against the Company. However, in the light of his evidence in this case and of the determination of the Financial Services Compensation Scheme ("FSCS") mentioned below, the claim appears at present to have realistic prospects of success, subject to questions of limitation.
In mid June 2010 Mr and Mrs Davy caused the Company to sell its business (that is, its client list, but not its fixed assets) to a third party. I do not know what consideration was received for that sale or what became of any moneys received. The decision to sell the business appears to have been taken as part of Mr and Mrs Pickering's retirement planning and, perhaps, on account of Mr Pickering's significant health problems. A few days after the business was sold, the real property belonging to the Company was transferred to Mr and Mrs Pickering and a pension trust company. Mr Pickering resigned as a director of the Company on 15 July 2010; Mrs Pickering remained as director and secretary. No run-off insurance was obtained for the Company.
As I have said, it is Mr Davy's case that he first knew that he had a potential claim against the Company on 19 July 2011. By 28 July 2011 he had made a complaint to the Financial Ombudsman Service ("FOS").
On 28 July 2011 FOS wrote to Mr Pickering to inform him that it had received a complaint from Mr Davy against the Company regarding the mis-selling of a drawdown pension. The letter said that further information about the complaint could be obtained when the Company wrote to Mr Davy to confirm receipt of the complaint, and that the Company should issue a final response within eight weeks of receipt of the letter.
A file note from the FOS shows that on 4 August 2011 Mrs Pickering made a telephone call to the FOS, asking for details of its conversation with Mr Davy.
On 21 September 2011 Mr Pickering wrote to Mr Davy, confirming that the Company had received the complaint and that it was looking into it, which would involve retrieving the files from "deep freeze".
On 18 October 2011 Mr Pickering wrote again to Mr Davy, saying that the files had been retrieved and asking on what grounds the complaint had been made.
On 26 October 2011 the FOS wrote to Mr Pickering in respect of the complaint, enclosing a copy of the complaint form and requesting that the Company submit a statement of its case, documentation and any evidence on which it wished to rely before 9 November 2011.
It does not appear that the Company responded to that request.
On 17 November 2011 Mrs Pickering on behalf of the Company applied to the Registrar of Companies for the Company to be struck off the register pursuant to section 1003 of the Companies Act 2006. Mr Davy says—and there is no contrary evidence—that he was not provided with notice of the application as a creditor of the Company under section 1006(1) of Act. The application was advertised in the Gazette, but Mr Davy says, plausibly enough, that the advertisement did not come to his attention and that, if he had known of the application to strike the Company off the register, he would have objected.
Pursuant to the application, the Company was struck off the register under section 1003 and on 20 March 2012 was dissolved.
The papers show the following relevant information regarding the financial position of the Company.
• The Company's balance sheet as at 31 January 2010 showed a surplus of £256,410 and a figure of £580,633 in respect of tangible assets. The notes showed that the figure for tangible assets included £577,287 in respect of freehold land.
• On or about 26 June 2010 it transferred its freehold land as mentioned above.
• The Company's last filed accounts, for the year ended 31 January 2011, showed that the Company had no fixed assets and that its current assets were valued at only £6731. There was a net deficiency on the balance sheet of £96,201. No provision was made for creditors with claims falling due after one year.
A point made on behalf of Mr Davy is that, although he had not intimated a claim against the Company by the time it disposed of its assets, Mr and Mrs Pickering had good reason to anticipate that such a claim might result, because a very similar claim had already been brought against the Company by a Mr Simon Lodge and had been upheld by the FOS. The facts of that earlier claim appear from the judgments in the Court of Appeal, refusing the Company's application for judicial review of the FOS's decision, in R (Heather Moor &...
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