The Welsh Ministers v Haydn Price and Another
| Jurisdiction | England & Wales |
| Judge | Sir Terence Etherton MR,Lord Justice Longmore,Lord Justice Irwin |
| Judgment Date | 07 November 2017 |
| Neutral Citation | [2017] EWCA Civ 1768 |
| Docket Number | Case No: A3/2016/4256 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 November 2017 |
[2017] EWCA Civ 1768
THE MASTER OF THE ROLLS
Lord Justice Longmore
and
Lord Justice Irwin
Case No: A3/2016/4256
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
HHJ BEHRENS QC (sitting as a Judge of the High Court)
Royal Courts of Justice
Strand, London, WC2A 2LL
Michael Todd QC and Jack Rivett (instructed by Geldards LLP) for the Appellant
Christopher Buckley (instructed by the Government Legal Department) for the Second Respondent
The First Respondent appeared in person
Hearing date: 17 October 2017
This appeal raises a point of practice as to the circumstances in which it is permissible and, where permissible, appropriate to join a third party to proceedings for restoration of a dissolved company to the register of companies.
The proceedings concern Pablo Star Limited ("Pablo Star"), which was struck off the register of companies on 18 February 2014 on the application of the first respondent, Haydn Price, a director and the sole shareholder. It was restored to the register by order of Registrar Derrett on 13 June 2014 ("the Restoration Order"), on the application of Mr Price. The Restoration Order contained undertakings by Mr Price. The Restoration Order was varied by a further order of Registrar Derrett dated 18 June 2015 ("the Variation Order"), which contained new undertakings from Mr Price and released him from his undertakings in the Restoration Order.
The purpose of restoring Pablo Star to the register was to enable proceedings for breach of copyright to be brought against various persons, including the appellants, the Welsh Ministers. The Welsh Ministers have applied to be joined to the restoration proceedings in order to argue, among other things, that the Restoration Order and the Variation Order should be revoked or the purported restoration be declared invalid and of no effect because of non-disclosure or misrepresentation leading to the making of the Restoration Order and the Variation Order or because of breaches of the undertakings given to the court by Mr Price.
By order dated 2 March 2016 Registrar Barber joined the Welsh Ministers. This is an appeal from the order dated 24 October 2016 of His Honour Judge Behrens QC, sitting as a High Court Judge in the Chancery Division, allowing the appeal from Registrar Barber's order, setting aside her order and dismissing the Welsh Ministers' application to be joined to the proceedings.
The background
The following is a brief summary of the factual background, in part taken from the judgment of Judge Behrens.
As I have said, Mr Price is the director and sole shareholder of Pablo Star.
In August 2011 Mr Price, acting on behalf of Pablo Star, purported to enter into an agreement with Gwendoline Watkins, pursuant to which Ms Watkins allegedly assigned to Pablo Star the copyright in a photograph of Dylan Thomas and Caitlin Thomas known as "Just Married" ("the Photograph").
On 18 February 2014 Pablo Star was struck off the register of companies on the application of Mr Price, in his capacity as director of Pablo Star.
By a claim form issued on 10 April 2014 Mr Price applied for Pablo Star to be restored to the register pursuant to section 1029 of the Companies Act 2006 ("CA 2006"). As is the usual practice, the Registrar of Companies, who is the second respondent to this appeal, was made the sole defendant. Mr Price's witness statement in support of the application stated that the sole reason for the application was to allow Pablo Star to pursue litigation for breach of copyright, which had a good chance of success. The witness statement said that it was not otherwise intended that Pablo Star would trade, and, once the litigation had been concluded, Pablo Star would be struck off the register.
In the usual way, the Treasury Solicitor wrote to Mr Price outlining the terms on which the Registrar of Companies would not oppose the application for restoration. Those terms included an undertaking by Mr Price that the company:
"will not carry on business or operate in any way other than to take the necessary steps to: (i) pursue a claim against ………… seeking damages for alleged breach of copyright referred to [in Mr Price's witness statement]"
The letter stated that the undertakings were required in view of the evidence in support of the application which indicated that the sole purpose for seeking restoration was to make a claim against a third party.
On 21 May 2014 Mr Price, on behalf of Pablo Star, purported to execute an assignment ("the assignment") of, among other things, the copyright in the Photograph to Pablo Star Media Limited ("Media"), a company also owned and controlled by Mr Price. The assignment reserved to Pablo Star the right to sue New Directions Publishing Inc ("New Directions"), VisitWales. com ("the Welsh Ministers") and Nancy Galbraith ("Ms Galbraith"). VisitWales. com is the trading name of the administrative division of the Welsh Government that promotes tourism in Wales. It is not a separate legal entity. The Welsh Ministers are legally accountable for it.
On 13 June 2014 Registrar Derrett ordered, by consent and on undertakings being given by Mr Price, that Pablo Star be restored to the register of companies. Among the undertakings given by Mr Price was an undertaking not to carry on business or operate in any way other than to take the necessary steps to pursue claims against New Directions, the Welsh Ministers and Ms Galbraith seeking damages for the alleged breach of copyright referred to in Mr Price's witness statement.
Since July 2014 Media has commenced proceedings for alleged breach of copyright in the Photograph against many different parties.
In February 2015, contrary to the undertakings given to the court by Mr Price on Pablo Star's restoration, Pablo Star issued proceedings in New York not only against the Welsh Ministers but also against Tribune Media Service, Pittsburgh Post Gazette, E W Scripps Co, Colorado Newsfeed, Travel Squire, Richmond Times Dispatch and Miami Herald Media Co; and it commenced proceedings in Ireland for alleged defamation by Ms Watkins.
On 26 May 2015 Mr Price applied to the court to amend his undertakings. The Welsh Ministers were unaware of that application. In his witness statement in support of that application Mr Price said that:
"new facts have come to light not originally known when I first made my undertakings and some of my subsequent actions may have needed the courts permission".
In paragraph 8 of that witness statement he said that on 18 March 2015 he had written to Companies House and explained that:
"Since filing my claim/undertakings to the court, further copyright infringements have come to light in relation to Visit Wales and third parties Visit Wales supplied with our images (without my knowledge before I had submitted my application to the court and in most case [sic] the infringements occurred after that application was submitted). As these parties are directly related to the Visit Wales claim, I have allowed our New York attorney to include some of these parties as co-defendants in [one of the actions]. I hope that the court accepts that this was the right course of action for us to take and I did not feel that I needed the prior permission of the court to do so
…
When Pablo Star Limited was restored to the register it recovered various copyrights and other property rights from the crown … In order to put the company's affairs in order now, so that its on-going sole purpose can be to pursue the claims above, I have also sold these items to a new standalone company Pablo Star Media Limited".
He also stated in the witness statement that, once Pablo Star was restored to the register:
"It seemed logical to me that… the company could dispose of its assets and assign its rights to a third party like any other company on the register. I therefore established a new company to own these ongoing rights and the new owners could deal with any new infringements. This allowed the original company to continue for the solo [sic.] purposes of pursuing the agreed previous litigation. With the rights to sue any newly identified infringements assigned to a new company there would be not [sic.] affect [sic.] on the speedy resolution of the original matter for which the company was restored to address".
By a consent order made on 18 June 2015 Registrar Derrett acceded to the application and made an order specifying new undertakings by Mr Price and releasing him from the undertakings in the Restoration Order. The new undertakings included an undertaking that Pablo Star would not carry on business or operate in any way other than to take the necessary steps to (1) transfer from its ownership all copyrights and trademarks held in its name mentioned in paragraph 8 of his witness statement, and (2) pursue claims against 14 named entities, including "Visit Wales", seeking damages for breach of copyright.
Mr Price subsequently commenced further proceedings against The Welsh Ministers in the name of Media rather than Pablo Star.
On 4 August 2015 Pablo Star and Media executed an addendum to the assignment, which amended clause 4 of the assignment reserving the right to sue New Directions, VisitWales. com and Ms Galbraith to Pablo Star. So far as concerned VisitWales. com, the clause was amended to read as follows:
"This agreement shall also not affect the Assignors potential actions in America and Canada against (3) Visitwales. com or the so called "Welsh Ministers" (for which the Assignors rights, remedies and potential actions are not transferred and its copyright ownership as far as it relates to...
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