Re A Company (no 1344/03)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE HART |
| Judgment Date | 07 November 2003 |
| Neutral Citation | [2003] EWHC 2807 (Ch) |
| Docket Number | Case No: 1344 of 2003 |
| Date | 07 November 2003 |
| Court | Chancery Division |
[2003] EWHC 2807 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
The Strand
London WC2A 2LL
Mr Justice Hart
Case No: 1344 of 2003
Tape Transcript of Smith Bernal Wordwave Limited 190 Fleet Street London EC4A 2AG Tel No: 020 7404 1400 Fax No: 020 7831 8838 (Official Shorthand Writers to the Court)-
Friday 7th November 2003
This is an appeal against a decision of Mrs Registrar Derritt made on 16 th July this year, the reasons for which were handed down in a written form on 6 th August of this year, whereby she refused to extend the time for an application for rescission of a winding up order pursuant to Rule 7.47(4) of the Insolvency Rules 1986.
The history of the matter is fraught with mishaps of various kinds and it is necessary for me to set it out in some detail. I am assisted in doing so by a chronology which has been helpfully prepared for my assistance by Miss Stubbs, who has appeared on behalf of the respondents, the Commissioners of Customs & Excise. Unhappily the papers otherwise in relation to this appeal have been presented to the court in a thoroughly indigestible way since those responsible for preparing the appeal bundle chose, for whatever reasons, to exclude from it the evidence which was in fact before Mrs Registrar Derritt but that omission has been supplied by those instructing Miss Stubbs. In addition, for reasons which I explained in the judgment given earlier today I, subject to a limited exception, refused the applicant's leave to adduce additional evidence on this appeal.
The story begins with a revocation by the Customs & Excise of its approval to the company, Oakwood Storage Services Ltd, of its bonded warehouse status. That took place in November 2001 as a consequence of which the company's trade as a bonded warehouse was brought to an end, a fact recognised by Ouseley J when he had to consider in the late Autumn of 2001 an application by the company for permission to seek judicial review of the revocation of the approval. That application was unsuccessful but in the course of it, I am told that Ouseley J recognised that the statutory machinery available for the company to challenge the withdrawal of the approval, namely the obtaining by the company of a review decision by the Commissioners followed by an appeal against such a review decision to the Tribunal, inevitably took so long that the company's trade as a bonded warehouse would be fatally injured as a consequence. In particular, it is submitted to me today by Mr Andrew Young, who has appeared on behalf of the company, that the effect was exacerbated having regard to the fact that the disruption in the trade occurred over the period immediately prior to Christmas, a period which is generally the best period in the company's trading cycle.
The application for permission to seek judicial review was unsuccessful and the Commissioners on their subsequent review upheld their original decision and the company duly appealed to the VAT and Duties Tribunal in relation to that withdrawal of approval. It also appealed at about the same time in relation to an assessment which had been raised against it in respect of a failure to discharge an Administrative Accompanying Document ("AAD") and procedurally it appears that those two appeals proceeded together before the Tribunal during the course of 2002.
A consequence of the company's ceasing to trade or a consequence of the revocation of the approval was, according to the evidence filed before Mrs Registrar Derritt, that the Customs in fact took over the premises from which the company had been trading and again, according to that evidence, advised the directors not to attend upon the premises or otherwise they would be subject to arrest.
Whether in connection with that or whether as a result of that or not, it does not appear, those in control of the company's affairs, while keen to pursue their remedy in the Tribunal, were not equally astute to look after the corporate affairs of the company, since they allowed the registered office of the company to remain at the premises to which they no longer had access and they allowed a situation also to arise under which the company was struck off the register on 5 th June 2002, presumably for failure to comply with some statutory requirement as to returns. Again the evidence, or at any rate the evidence to which I have had my attention drawn, does not indicate the precise reason for that striking off.
It appears that there was failure by the Customs in relation to the proceedings before the Tribunal to comply with procedural requirements imposed by the Tribunal in connection with the appeals, in consequence of which an unless order in those proceedings came to be made which itself was not eventually complied with, with the result that, I am told, the Tribunal allowed the company's appeals and in that connection, made an order that the Customs should pay the costs of the appeal. It is not entirely clear when the order to pay the costs was made but it is accepted on behalf of the Customs that the consequence of the Tribunal's order was to give rise to a liability by the Customs to the company in respect of the company's costs of the appeal. At one point in the correspondence it appears that the Customs were taking a point that that liability would not extend to any period of the appeal during which the company had not been on the register, unless and until at any rate that it was restored to the register, but nothing, I think for present purposes, turns on that.
The position then was that in February the Customs were acknowledging to the company a liability to pay costs in respect of the appeal. However, it would appear, probably because the left hand of the Customs was not fully conscious of what the right hand was doing, that the Enforcement Division of the Customs found itself in a position where an assessment to Value Added Tax had been raised on the company in respect of the period January to April 2002. That being an estimated assessment, no return by the company having been made for that period and, be it noted, that being in respect of a period in which the bonded trade of the company could no longer have been being lawfully carried on.
The position thus was that during February, a correspondence was being carried on between the Customs and the company, represented for this purpose by its VAT consultant, a Mr Curly, in relation to the company's liability to pay costs and at the same time, Customs was sending a letter before action to the company at its registered office in respect of the sums due on the assessment. That letter before action was followed very quickly on 25 th February by the presentation of a petition based on the assessment, namely an assessment in the sum of £18,304. The petition was served on 4 th March 2003 by a process server who purported to serve it at the registered office of the company, namely the building from which it had previously, but was no longer, trading. The petition was advertised on 19 th March and on 9 th April the company was restored to the register, which was one of the items of relief sought by the petition, and then wound up.
In the meantime, in connection with the correspondence that had been contemporaneously going on between the Customs and Mr Curly in relation to costs, the directors of the company had been taking steps through the company's accountants, O'Connor & Co, to have the company restored to the register. This was all done in complete ignorance of the fact that a petition had been presented for the restoration of the company and its winding up. The application made by the directors to restore the company to the register was made on 12 th March 2003 and was granted by Registrar Jaques by an order of 25 th April 2003.
At about the same time but probably a little earlier, it appears...
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