Peaktone Ltd v Joddrell
| Jurisdiction | England & Wales |
| Judge | Lord Justice Munby,Lord Justice Lewison,Lord Justice Etherton |
| Judgment Date | 26 July 2012 |
| Neutral Citation | [2012] EWCA Civ 1035 |
| Docket Number | Case No: B3/2011/3312 |
| Court | Court of Appeal (Civil Division) |
| Date | 26 July 2012 |
[2012] EWCA Civ 1035
Lord Justice Etherton
Lord Justice Munby
and
Lord Justice Lewison
Case No: B3/2011/3312
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANCHESTER COUNTY COURT
HIS HONOUR JUDGE STEWART QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Ms Catherine Foster (instructed by Clyde & Co Claims LLP) for the appellant
Mr James Malam (instructed by Recompense Limited) for the respondent
Hearing date: 19 July 2012
This appeal raises as the central issue a short point on the meaning and effect of section 1032(1) of the Companies Act 2006. Specifically, it raises the question whether an order made pursuant to section 1029 of the 2006 Act has the effect of retrospectively validating an action purportedly commenced against a company during the period of its dissolution. His Honour Judge Stewart QC, from whom this appeal is brought, has held that it does. In my judgment be was right to do so. Section 1032(1) has that effect.
The facts
The respondent, Kenneth Joddrell (Mr Joddrell), was employed by the appellant, Peaktone Limited (Peaktone), between 1986 and 2003/2004. He claims to have suffered noise induced hearing loss which he alleges is attributable to that employment. In his Particulars of Claim (see below) he pleads that he first became aware of a hearing loss "in 2006" when he received certain advice. He further pleads that this is his "date of knowledge."
On 31 March 2009 Peaktone was struck off the Register of Companies and dissolved pursuant to section 652 of the Companies Act 1985.
On 24 August 2009 Mr Joddrell purportedly issued proceedings against Peaktone in the Torquay and Newton Abbot County Court claiming damages for personal injury. His Particulars of Claim followed on 23 December 2009. The Claim Form and the Particulars of Claim were purportedly served on Peaktone by a letter dated 23 December 2009 posted to what had been Peaktone's registered office immediately prior to its dissolution. The letter and its contents came to the attention of accountants who had previously acted for Peaktone. In a letter dated 4 January 2010 addressed to Mr Joddrell's solicitors, they pointed out that Peaktone had been dissolved and that it was therefore unable to complete the forms enclosed in the letter of 23 December 2009.
On 29 April 2010 Mr Joddrell applied to the Companies Court for an order pursuant to section 1029 of the 2006 Act that Peaktone be restored to the Register of Companies. On 10 June 2010 Mr Registrar Nicholls made the order sought.
Two things about the proceedings in the Companies Court should be noted. First, that the evidence in support of the application made no reference to the fact that the personal injury proceedings had already been issued. On the contrary, the evidence indicated that the order under section 1029 was being sought because Mr Joddrell wished to "commence" proceedings against Peaktone. Second, that no application for directions under section 1032(3) was made (see below). It is suggested that, if he had known the true facts, Mr Registrar Nicholls would have declined to make any direction advantageous to Mr Joddrell and, indeed, would have required him to bring a fresh claim. It is said that, given the inaccurate and misleading presentation of the circumstances to the Companies Court, Judge Stewart ought to have concluded that the circumstances in which the restoration was achieved amounted to an abuse of process. As matters stand, however, all this seems to me to be neither here nor there. Quite apart from the fact that none of it is raised in Peaktone's grounds of appeal, the order made by Mr Registrar Nicholls stands. It has never been appealed. No application has ever been made to set it aside. We cannot go behind it. The question for us is what it means and what its effect is.
On 18 June 2010 Peaktone issued an application in the Manchester County Court (to which the proceedings had by then been transferred) seeking an order striking out the claim under CPR 3.4(2)(b) and (c), that is, on the grounds that it was an abuse of the court's process and that there had been a failure to comply with a rule (this being identified in an accompanying skeleton argument as a failure to comply with CPR 7.5(1)). The application was heard by District Judge Jones on 18 January 2011. He delivered a reserved judgment on 25 January 2011 and ordered that the action be struck out pursuant to CPR 3.4(2)(b). He gave permission to appeal. His order is dated 10 May 2011, the day after he had given a supplemental judgment dealing with costs.
On 26 May 2011 Mr Joddrell filed his appellant's notice. The appeal came on before Judge Stewart on 27 July 2011. On that occasion Judge Stewart dealt with and gave judgment on what he called the main issue on the appeal. On 28 November 2011 Judge Stewart dealt with and gave judgment on the remaining issues. In the upshot the order he made on the latter date was that the appeal be allowed and the order of District Judge Jones striking out the claim be set aside.
Peaktone's appellant's notice dated 4 January 2012, seeking the reinstatement of the order made by District Judge Jones, was considered by Ward LJ on 8 March 2012. He gave permission to appeal, observing that "this is an amusing enough point of just enough importance to justify a second appeal." On 17 April 2012 Mr Joddrell filed a respondent's notice.
Mr Joddrell has been represented throughout by Mr James Malam. Peaktone was represented before us, as before Judge Stewart, by Ms Catherine Foster (another counsel had appeared before District Judge Jones). At all three stages the arguments on each side have remained essentially the same. Before turning to those arguments it is convenient first to refer to the relevant statutory provisions.
The statutory framework
The 2006 Act effected a significant change in the statutory framework. Prior to that, and for many years, successive Companies Acts had distinguished between two different routes to a judicial restoration of a dissolved or struck off company.
The first, which originated in 1900 and thereafter appeared successively in section 242 of the Companies (Consolidation) Act 1908, section 295 of the Companies Act 1929, section 353 of the Companies Act 1948 and section 653 of the Companies Act 1985, conferred on the court a power in defined circumstances, though exercisable for up to twenty years after dissolution, to order the restoration to the register of a company previously struck off by the Registrar of Companies. The effect of such an order was stated as being that the company is "deemed to have continued in existence as if its name had not been struck off."
The other, which originated in 1907 and thereafter appeared successively in section 223 of the 1908 Act, section 294 of the 1929 Act, section 352 of the 1948 Act and section 651 of the 1985 Act, conferred on the court a general power, though exercisable only within two years of the date of dissolution of the company, to "make an order…declaring the dissolution to have been void". The statute provided that "thereupon such proceedings may be taken as might have been taken if the company had not been dissolved." Importantly, the 'deeming' provision was not included.
I should add that section 651 of the 1985 Act was amended by section 141 of the Companies Act 1989 so as to remove the two year limitation where the purpose of the application was to enable personal injury proceedings to be brought against a dissolved company.
As Judge Stewart noted, the 2006 Act replaced these two separate procedures with a new single procedure. Section 1029(1) of the 2006 Act provides that an application can be made to the court to restore to the register a company which has been dissolved or struck off. Section 1029(2) provides that an application can be made by various specified persons including "any person with a potential legal claim against the company" and "any other person appearing to the court to have an interest in the matter." Section 1030 so far as material for present purposes provides that:
"(1) An application to the court for restoration of a company to the register may be made at any time for the purpose of bringing proceedings against the company for damages for personal injury.
…
(4) In any other case an application to the court for restoration of a company to the register may not be made after the end of the period of six years from the date of the dissolution of the company, subject as follows."
I need not set out the following sub-sections. Section 1030(6) provides a definition of "personal injury" which there is also no need to set out. Nor need I set out section 1031.
So far as material for present purposes, section 1032 provides as follows:
"(1) The general effect of an order by the court for restoration to the register is that the company is deemed to have continued in existence as if it had not been dissolved or struck off the register.
(2) The company is not liable to a penalty…for failure to deliver accounts…for a financial year [which] ended—(a) after the date of dissolution or striking off, and (b) before the restoration of the company to the register.
(3) The court may give such directions and make such provision as seems just 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."
This later power includes, as section 1030(3) recognises:
"power…to direct that the period between the dissolution (or...
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