Paul Charles Frandsen v Aaron Cabarle Mulligan
| Jurisdiction | England & Wales |
| Judge | Mr Justice Fancourt |
| Judgment Date | 01 October 2021 |
| Neutral Citation | [2021] EWHC 2685 (Ch) |
| Docket Number | Case No: CR-2021-001757 |
| Court | Chancery Division |
[2021] EWHC 2685 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY & COMPANIES LIST (ChD)
Rolls Building
7 Rolls Buildings
Fetter Lane, London
EC4A 1NL
THE HON. Mr Justice Fancourt
Case No: CR-2021-001757
In the Matter of Inter Global Surgical LLP (No. OC371890)
And in the Matter of the Companies Act 2006
James Mather and Max Marenbon (instructed by Peters & Peters LLP) for the Applicants
Andrew de Mestre QC (acting pro bono under the CLIPS scheme) for the First and Second Respondents
Hearing dates: 30 September, 1 October 2021
Approved Judgment
GGAPPT Ltd (“the Company”) has been struck off the Register of Companies for failure to file statutory returns and the first and second applicants (the Frandsens) apply urgently to this court, by claim form as yet unissued, to restore it to the Register pursuant to s.1029(1) Companies Act 2006. The Company is controlled and owned by the Frandsens. The relief sought is opposed by the first respondent, Mr Mullligan, who has nothing to do with the Company itself; and the Treasury Solicitor on behalf of the Registrar of Companies does not consent to an order for restoration being made.
By application notice dated 23 September 2021, all three applicants (the Frandsens and the Company) purport to apply for an interim injunction restraining the first and second respondents (Mr Mulligan and his company, ARCHMM Ltd), from interfering with or being concerned in the management of Inter Global Services LLP (“the LLP”), alternatively the appointment of a receiver and manager of the LLP.
The members of the LLP are the Company, as to 80% of the value of the LLP, and ARCHMM as to 20 % of the value of the Company. ARCHMM is controlled and owned by Mr Mulligan.
The dispute between the parties is about which of the members – the Company and ARCHMM — has the right to control the affairs of the LLP going forwards. While it remains struck off the Register, the Company cannot; and, as things stand, ARCHMM — in practice Mr Mulligan — has taken over control of the LLP. That has happened since the striking off and dissolution of the Company.
There are existing proceedings in the Queen's Bench Division of the High Court in which the LLP alleges that that Mr Mulligan has acted dishonestly and unlawfully in seeking to divert the business of the LLP to a limited company with a similar name that he owns, and other depredations are alleged. In these proceedings, Mr Mulligan makes serious allegations of dishonesty and unlawful conduct of the LLP's affairs against the Frandsens.
Mr Mulligan became aware that the Company was at risk of being struck off. He was aware of the implications of that for his control of the LLP and, on his own evidence, watched with interest and growing excitement to see if the Frandsens would deal with the outstanding filings in time. They did not. On 17 August 2021 the company was dissolved and stuck off – it appears that the applicants did not receive the warning notices from the Registrar of Companies. How that came about is a matter in dispute. The Frandsens consider that it is likely that Mr Mulligan diverted the warning letters from them; Mr Mulligan denies that.
At all events, Mr Mulligan knew immediately that the Company had been struck off and seized his opportunity. He has sought to take control of the LLP's affairs, including its IT, its business and its banking arrangements, and to exclude the Frandsens entirely. He (correctly) claims that, as things stand, ARCHMM is the only person that can be entitled to control the LLP, because the Company does not exist. That will of course change if and when the Company is restored to the Register.
At that time, there will be (and there is already, as between the Frandsens and Mr Mulligan) a serious dispute about whether, as majority owner and/or by reason of an oral agreement allegedly made at the time that Mr Mulligan's 20% share was conferred on him, the Company has sole control of the LLP's affairs, subject to its duties to ARCHMM as an owner; or whether, by reason of the default position for members of a limited liability partnership under the Limited Liability Partnership Regulations 2001, control is shared between the members and so, in practice, the LLP is deadlocked. The only basis on which ARCHMM can have sole control of the LLP is while the Company remains struck off. Hence, I have no doubt, why Mr Mulligan seeks to oppose its restoration to the Register.
There are two questions for me to decide today.
First, whether at this stage I should order the restoration of the Company's name to the Register of Companies.
Second, in any event, whether I should grant the interim injunction that the applicants seek or appoint a receiver pending a full hearing of the application, which it is common ground will require a full day's hearing.
The materials that have been put before me include a lengthy skeleton argument on behalf of the applicants, lengthy evidence from Mr Frandsen and equally lengthy evidence from Mr Mulligan (which was served 2 days ago), and a skeleton argument from Mr Mulligan in person, which I adjourned the hearing in order to read. It is not possible for me, in the limited time that I had to hear the matter in the vacation applications list, to reach any clear conclusion on the detail of the factual dispute between the parties. Both sides have apparently cogent allegations against the other, which by delving into the underlying documents it may be possible to cut through, to some extent, in a longer hearing. I am satisfied that the applicants have an arguable case that the Company, when restored, is entitled to manage the LLP, but I am equally satisfied that Mr Mulligan has an arguable case that, in those circumstances, both members are entitled jointly to manage the LLP. That is an issue that can only be resolved at a trial because it involves evidence about what was said and agreed in 2015.
Restoration
On the first question, the position is that the Company was plainly active at the time when it was struck off. It was, at that time, the corporate vehicle through which the LLP's affairs were being managed by the Frandsens and it was pursuing remedies against Mr Mulligan in the Queen's Bench proceedings. The Crown has indicated by letter dated 31 August 2021 that it has no objection to restoration, as regards bona vacantia, and the applicants say that all necessary accounts and filings to bring the company's affairs up to date have been sent by post to the Treasury Solicitor and to the Registrar. No dispute was raised on behalf of Mr Mulligan as to any of these threshold requirements. Clearly, an undertaking could be given, if necessary, to file the outstanding documents within a short period after any order restoring the Company's name to the Register.
The Treasury Solicitor has not confirmed that the documents are satisfactory. It opposes the restoration on the basis that the Registrar of Companies has not been served with...
To continue reading
Request your trial