England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
MRS. JUSTICE ANDREWS
HC13B01684

		Royal Courts of Justice Strand, London, WC2A 2LL
		04/12/2015

Lord Justice Briggs :

Introduction

1. This appeal from the Order of Andrews J in the Companies Court dated 11^th April 2014 concerns the principles applicable to the court's discretion, when making an order for the restoration to the register of a dissolved company, to order that the running of time for the bringing of claims by the company for the purposes of the Limitation Act 1980 should be suspended during all or part of the period when the company was dissolved. An order made in the exercise of that discretion is commonly called a "limitation direction".
2. Sections 1029 and following of the Companies Act 2006 confer power on the court to order the restoration of a company to the register where it has been dissolved (or deemed to be dissolved) at the conclusion of an insolvency process or struck off after becoming defunct, or voluntarily. In the insolvency context, the court may order restoration of the company to the register if it considers it just to do so: see section 1031(1)(c).
3. Section 1032 provides, so far as is relevant, 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.

…

(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."

It is by means of the discretion conferred by Section 1032(3) that limitation directions are made.

4. There is nothing new in these provisions. The first limitation direction made in any reported case was in Re Donald Kenyon Limited [1956] 1 WLR 1397, when the discretion was conferred in virtually identical terms by section 353(6) of the Companies Act 1948. That was a case where the discretion was exercised, in effect, against the company, for the benefit of creditors in respect of whose claims the limitation period had expired during the company's dissolution. Roxburgh J said, at page 1401:

"… When a company has been dissolved and therefore nobody can sue it without getting it restored to the register, it is only common fairness that, if the contributories for purposes of their own, want to get it restored to the register years afterward, the period between the dissolution and the restoration to the register should be disregarded for the purposes of the Statute of Limitations."

Earlier, he had explained that he was only considering creditors who had not been statute-barred at the date of dissolution. He considered that, by doing so, he was fulfilling what had earlier been described by this court as the purpose of the provision now to be found in section 1032(3), namely to achieve both for the company and third parties an "as-you-were position" where justice required it: see Tyman's Limited v Craven [1952] 2 QB 100, per Evershed MR at page 111.

5. The only reported case (other than the present) in which the question whether the discretion should be exercised in favour of a restored company, so as to enable it to pursue claims against third parties which would otherwise be statute-barred, is Regent Leisuretime v Natwest Finance Limited [2003] EWCA Civ 391, when the relevant discretion was conferred by section 653(3) of the Companies Act 1985. Having rejected a submission that the court had no jurisdiction to make a limitation direction in favour of (rather than against) the restored company, Jonathan Parker LJ continued as follows, at paragraphs 89-90:

"89. Although, for reasons given earlier, I have concluded that there is jurisdiction to give a limitation direction in favour of the company being restored, the scope of giving such a direction must in my judgment be extremely limited. To my mind, the jurisdiction ought only to be exercised in exceptional circumstances. My reasons for this conclusion are as follows.

90. So far as I can see, the question whether a limitation direction should be given in favour of the company being restored to the register can only arise in circumstances where the company has an asset in the form of a claim based on a cause of action which was not statute-barred at the date of dissolution. The 1980 Act provides a detailed limitation regime under which, in certain specified circumstances, the running of time may be postponed (see, e.g., sections 14A, 32 and 33). The effect of a limitation direction under section 653(3) is completely to override that regime. Whilst considerations of essential fairness may justify the giving of a limitation direction in favour of third party creditors (as they did, for example, in Donald Kenyon), the same cannot so readily be said of a limitation direction in favour of the company being restored to the register: indeed, on the face of it fairness will generally require that the company, like any other claimant faced with a limitation defence, should be left to attempt to meet that defence by recourse to the statutory regime in the 1980 Act."

Keene and Schiemann LJJ agreed. The Court of Appeal affirmed the decision of the judge (HHJ Overend) to delete a limitation direction earlier made in the company's favour by the District Judge, upon the basis that no exceptional circumstances for doing so had been demonstrated.

6. In the present case the Judge made a limitation direction in favour of the Company. After citing the relevant passages from the judgment of Jonathan Parker LJ in the Regent Leisuretime case, she continued, at paragraph 18:

"Those observations, drawing a distinction between those cases in which the application for restoration is a third party creditor and those in which the applicant is acting on behalf of the company itself, were all obiter. With the greatest of respect, I am not sure that I follow the logic of that distinction. … If five of the six years of the limitation period had expired at the date of dissolution, the limitation direction would give the creditor the further year to which he was entitled under the Limitation Act, by not counting the period of dissolution. Surely, in principle, the same approach should be applied to the company which was unable to bring a claim within time because it had ceased to exist before the limitation period expired."

7. There is an obvious tension between the clear distinction which the Court of Appeal identified in the Regent Leisuretime case, between limitation directions in favour of a company's creditors, and in favour of the restored company itself, and the Judge's view that, in principle, the two were broadly comparable. It is evident that she did not apply that distinction to the request for a limitation direction in the Company's favour, considering, since the dicta in the Regent Leisuretime case were in her view obiter, that she was at liberty not to do so.
8. It is therefore necessary to consider both whether the dicta of Jonathan Parker LJ which I have quoted were indeed obiter and, even if they were, whether the principles outlined in Regent Leisuretime are nonetheless correct. If they are, then the question arises whether the present case is sufficiently exceptional to justify the making of the limitation direction in favour of the Company.

The facts

9. The Company, formerly known as Michael Green Plant Limited but called Telerate Limited by the time of its dissolution, was formed in 1976 and carried on the business of demolition and clearing works. Mr. Hawkes, the first Respondent, was its sole director and shareholder. By 2004 the Company was in serious financial difficulty and in October of that year, HMRC petitioned to wind it up by reason of a debt of about £312,000. The petition was due to be heard on 17^th November 2004.
10. Being anxious if possible to extract the Company's business from its impending ruin, Mr. Hawkes obtained the assistance of Mr. Andrew Kirkpatrick the third Appellant and Mr. Gordon Cook, the fifth Appellant, in constructing a transaction whereby the Company would sell its assets including in particular forty-five acres of potential development land to the second Appellant, County Leasing Limited ("CLL") of which Mr. Kirkpatrick was a director, for £225,000, on the basis that CLL would then lease the assets back to two new companies formed by Mr. Hawkes, namely MGP 2 Limited and Quotepool Limited, with their liabilities under the leaseback agreements being guaranteed by Mr. Hawkes. The transaction was in part funded by the first appellant County Leasing Asset Management Limited ("CLAM"). Mr. Cook's business called Chard Wallis was to be appointed as an advisor to the Company in relation to the transaction.
11. The sale and leaseback went ahead in late 2004 (presumably under the protection of a validation order) and the Company was placed into administration in late January 2005. A Mr. Robert Valentine was appointed as administrator. In December 2005 the Company passed from administration into liquidation, with Mr. Valentine taking office as liquidator.
12. Of the £225,000 which was to have been the purchase price for the sale by the Company of its assets, it appears that Mr. Valentine received no more than about £40,000. Substantial sums appear to have been paid to or for the benefit of Mr. Kirkpatrick and Mr. Cook.
13. Mr. Valentine began investigating the sale and leaseback transaction, and the destination of the proceeds of sale, as early as April 2005, in correspondence with both Mr. Cook and Mr. Kirkpatrick, but he achieved no tangible result for the Company before it was dissolved on 29^th April 2009, nearly four and a half years after time for the pursuit by proceedings of any causes of action of the Company against Mr. Cook, Mr. Kirkpatrick, CLL and CLAM would ordinarily have started running, subject to any statutory provisions for postponement.
14. By that time, Mr. Hawkes' attempt to continue the former business of the Company had itself failed, with the result that CLL and CLAM commenced proceedings in the Northampton County Court against MGP 2 and Quotepool for rental arrears, and against Mr. Hawkes upon his guarantees.
15. There had in 2008 been some negotiations with a view to a possible assignment by Mr. Valentine to Mr Hawkes of the Company's causes of action against CLL, CLAM, Mr. Kirkpatrick and Mr. Cook, but these went nowhere, according to Mr. Hawkes because he could not afford the price of £10,000 demanded by Mr. Valentine. Having heard him give evidence, the Judge accepted Mr. Hawkes' explanation.
16. In September 2010 Mr. Hawkes applied for the restoration of the Company to the register. In December, just as the primary limitation period for the Company's claims was expiring, he applied for a limitation direction. On 16^th December, judgment was handed down in the Northampton County Court proceedings, upholding his defence and counterclaim on the ground that both he and his new companies had entered into the December 2004 transactions in reliance upon misrepresentations for which CLL and CLAM were responsible.
17. It took until October 2011 for the restoration order to be made. The Company was restored for the purpose of the continuation of its liquidation under a new liquidator, Mr. Nicholson, and he assigned the Company's causes of action against CLL, CLAM and Mr. and Mrs. Kirkpatrick in September 2012, and against Mr. and Mrs. Cook in February 2013. The application for a limitation direction in favour of the Company and its assignee Mr. Hawkes was heard only in April 2014, and granted on 11^th April.
18. It is common ground both that the causes of action against the Appellants have a real (in the sense of more than fanciful) prospect of success, and that the primary limitation period in respect of all of them expired roughly two years before they were assigned by Mr. Nicholson on behalf of the Company to Mr. Hawkes and nearly one year before the order for restoration was made.

Limitation Directions in favour of the restored company – the law

19. The first question, as I have said, is whether the observations of Jonathan Parker LJ in the Regent Leisuretime case, quoted above, were or were not obiter dicta. Counsel were in apparent agreement that this depended on whether the causes of action which the company in that case wished to pursue had become statute-barred by the time of its dissolution. If they had, then it is common ground that, as Jonathan Parker LJ himself noted, there could be no basis for the making of a limitation direction. As he put it, the question whether to do so would simply not arise. This is because a limitation direction postponing the running of time from the onset of dissolution could not rescue a claim which was by then already statute-barred.
20. Miss Williamson for the Respondents submitted, correctly, that the primary limitation period for the contemplated claims in that case had indeed expired by the time of the company's dissolution. The claim was for damages against the respondent bank for negligence and fraudulent misrepresentation and the primary six-year limitation period began to run in respect of it on 1^st April 1992 (see paragraph 98). The company was struck off pursuant to an order made on 17^th November 1998, by which time the primary limitation period had expired.
21. But at paragraph 46, Jonathan Parker LJ said this:

"The judge accepted Mr. Sutcliffe's submission (on behalf of the bank) that Mr. Amos (and hence the Company) knew all the facts relevant to the cause of action in September 1993, and that in consequence (and absent any limitation direction) the cause of action became statute-barred not later than September 1999."

It appeared therefore to be common ground before the judge that the primary limitation period had been extended pursuant to section 32 of the Limitation Act 1980 so as to expire during rather than before the period of the company's dissolution.

22. The issues for the Court of Appeal were:

i) Whether there was jurisdiction to make a limitation direction in favour of the company;

ii) If so, whether the discretion to do so should be exercised in the company's favour;

iii) Whether, if not, the company could show that the limitation period had been extended not only until September 1999, but until after the company, by then restored to the register, issued proceedings against the bank in April 2001, so that it needed no limitation direction.

See paragraph 50.

23. Jonathan Parker LJ dealt with those issues in the order described. He resolved the jurisdiction issue in favour of the company, but the discretion issue and the limitation issue in favour of the bank.
24. In my judgment, his decision on the discretion issue was part of the ratio decidendi, for two reasons. First, as I have said, the case had proceeded before the judge on the basis of a concession that the primary limitation period had been extended so as to expire during the period of the company's dissolution. That concession does not appear to have been withdrawn, and the close analysis of the limitation issue in the concluding part of Jonathan Parker LJ's judgment was addressed only to the question whether under section 32 or section 14A of the Act the limitation period had been extended until after the company actually commenced proceedings. The second reason arises from the structure of his judgment, pursuant to which he arrived at the analysis of the limitation issue only by a route which required him to decide the jurisdiction and discretion issues first. Had he concluded that there had been no extension of the primary limitation period into the period of dissolution, then it would have been sufficient for him to conclude his analysis of the discretion issue by saying that, the claim having become statute-barred before dissolution, the discretion issue did not arise.
25. The result is that this court is in my view bound by the dicta about the exercise of the discretion to make a limitation direction in favour of a company, to the effect that (i) it may only be exercised in exceptional circumstances, (ii) that its effect is completely to override the statutory limitation regime, and (iii) that fairness will generally require that the company, like any other claimant faced with a limitation defence, should be left to attempt to meet that defence by recourse to the statutory regime in the 1980 Act.
26. It was not necessary for this court in the Regent Leisuretime case to delve further into the principles underlying the question whether exceptional circumstances might be demonstrated, in any particular case, sufficient to justify the making of a limitation direction in favour of the company. It was sufficient in that case for the court to conclude that no exceptional circumstances had been disclosed.
27. For my part, a rule requiring the presence of exceptional circumstances does not on its own provide much assistance, beyond making it clear that the burden of demonstrating the existence of such circumstances must lie squarely on the company seeking the limitation direction. I have however derived considerable assistance from reflecting upon the essential features of the limitation regime established by the 1980 Act, and upon a closer inspection of the words in section 1032(3) which identify the purpose for which the general discretion (not limited of course to limitation directions) was conferred by Parliament.
28. The limitation regime exists mainly to serve the public interest in the prohibition of stale claims. It confers a statutory defence to such claims by reference to an essentially mechanical computation of time, without regard to the merits of the claim, to any question whether the defendant deserves protection (otherwise than by reference to the elapse of time) and applies regardless of the reasons for a claim not having been brought earlier, such as the impecuniosity of the claimant or, in the case of a corporate claimant, negligence, laziness, or even disloyalty on the part of those fiduciaries or stakeholders responsible for its affairs. Both originally and by amendment, the regime does confer limited assistance to claimants, in cases of fraud, concealment or mistake, in cases whether there has been a receipt by the defendant of trust property, and in cases of latent damage. There are various other forms of relief available, for example in defamation or personal injuries proceedings, but those are of no relevance. There is of course provision for extension of time limits where the claimant suffers from a disability. Although this might appear to be slightly analogous to the incapacity which affects a dissolved company, I consider that the better view is that the incapacity which afflicts a company because of its dissolution arises because persons of sound mind, responsible for the company's affairs, have put it there, either by failing to cause the company to comply with its obligations to make returns to the registrar or, as in the present case, deliberately at the conclusion of the company's liquidation. By contrast, individuals do not ordinarily deliberately succumb to a relevant disability.
29. It will therefore frequently happen that a company loses the ability to pursue a valuable claim because it lacks the means with which to do so or because, having those means, it fails to do so due to some breach of duty by its directors or (if in administration or liquidation) its insolvency office holders. Those circumstances give rise to no postponement or extension of the running of time under the limitation regime.
30. By contrast, the discretion conferred by section 1032(3) is to:

"give such directions and make such provisions 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."

The starting point for the achievement of this purpose in relation to limitation is to recognise that time would have run against the company if it had not been dissolved in exactly the same way as it did in fact run, while it was dissolved. In a case such as the present where a limitation period expires while the company is in fact dissolved, the court must therefore ask itself whether, had it not been dissolved, the company (or any assignee of the cause of action) would have commenced the relevant proceedings within time which, ex hypothesi, continued to run against the company. Putting it another way, the question is whether the dissolution of the company was the real cause of its being disabled from pursuing its claim. If, had it not been dissolved, the court concludes that it would probably have failed to pursue its claim in time anyway then the causative prerequisite implied in the language of section 1032(3) seems to me to be missing.

31. Even if an applicant for a limitation direction (whether the company or its assignee) can demonstrate that, had the company not been dissolved, the claim probably would have been brought in time, the court must still ask itself whether it would be just to provide that opportunity, after the event, by a limitation direction. In a case such as the present, where the company has been deliberately dissolved by its liquidator at the conclusion of its liquidation, it is, without more, by no means clear why it should be just to provide the company with a further opportunity, to the prejudice of the persons who would thereby be deprived of the limitation defence, and to the detriment in the public interest that stale claims should be prevented. The company's dissolution is not some accident which has befallen it, like an illness affecting a potential claimant under a disability, but the consequence of a deliberate decision by the company's responsible officer.
32. The need for the court to consider whether, had the company not been dissolved, the claim would have been brought in time, is one which I derive from a simple application of the language of section 1032(3). To some extent the same analysis may be identified in some of the few authorities relevant to this discretion. Tyman's Limited v Craven [1952] 2 QB 100 was a decision of this court, although the company in question was not dissolved following liquidation, nor did any limitation issue arise. The question was only whether the mere restoration of the company to the register (under section 353(6) of the Companies Act 1948) without any discretionary direction, was sufficient retrospectively to validate proceedings issued on behalf of the company for the grant of a new lease at a time when it was in fact dissolved. This court held that it was. Nonetheless, referring to the words now to be found in section 1032(3), Lord Evershed MR said this, at page 111:

"In my judgment, the final words of the sub-section can properly and usefully be regarded as intended to give to the court, where justice requires and the general words would or might not themselves suffice, the power to put both company and third parties in the same position as they would have occupied in such cases if the dissolution of the company had not intervened. More generally the final words of the sub-section seem to me designed, not by way of exposition, to qualify the generality of that which proceeds them, but rather as a complement to the general words so as to enable the court (consistently with justice) to achieve to the fullest extent the "as-you-were position", which, according to the ordinary sense of those general words, is prima facie their consequence."

The "general words" to which the Master of the Rolls referred are those now to be found in section 1032(1).

33. I consider that this dictum is broadly consistent with the causation-based analysis which I have described above. It is not simply a question of putting back the clock to the date of dissolution, but requires the court to ask what would have happened thereafter, during the period of dissolution, if dissolution had not occurred.
34. The same analysis is implicit in Jonathan Parker LJ's judgment in the Regent Leisuretime case, at paragraph 91. He said:

"The fact that Mr. Amos took no step to initiate a claim by the Company, despite the fact that (as he has told us) he did not learn that the Company had been struck off until the Spring or Summer of 2000 by which date time had in any event expired, seems to me to reinforce that conclusion."

The conclusion was that there were no exceptional circumstances sufficient to justify the giving to the company of a limitation direction. Again, Jonathan Parker LJ was asking himself what would have happened if the company had not been dissolved, and he concluded that the claim would not in any event have been brought in time.

35. The same approach is, I consider, implicit in the analysis of the Outer House of the Court of Session in Whitbread (Hotels) Limited, Petitioners [2002] SLT 178, at paragraph 16 and 17. That was an application for a limitation direction by creditors of a dissolved company, in which the fact that the creditors had taken no steps to pursue their claims against the company during part of the period of its dissolution, while unaware that it had been dissolved, was central to the court's analysis. At paragraph 17, Lord Eassie said this:

"It appears to me that to make a direction in the terms sought would indeed confer a benefit on the present petitioners and confer a corresponding prejudice on the company – and its insurers – by removing from the calculation of limitation periods a substantial tract of time after the dissolution of WM in which no steps were taken by the petitioners to prosecute their claims against it. I recognise of course that, as counsel for the petitioners stated, during that period the petitioners could not in fact have sued WM because it had been dissolved. However, there is nothing to suggest the petitioners made any attempt to sue WM during that period, or indeed that they were aware of the dissolution of the company until a date after they had raised the current proceedings respecting the Swansea hotel."

Later, he said:

"… There is no particular reason why the petitioners should have the consequences of their inactivity in the period between the dissolution of the company and the raising of proceedings respecting the Swansea hotel undone."

36. I acknowledge that a requirement for the court to consider whether proceedings would have been brought in time if the company had not been dissolved is one which, perhaps, ought not to be slavishly applied in every case. It is a good servant, but it may be a poor master. For example, in the Donald Kenyon case [1956] 1 WLR 1397, it appears to have been unlikely that the creditors would have pursued the company, had it not been dissolved, before the limitation period expired. But that was a special case in which the unexpected late accrual to the company of an asset (namely a surplus after the sale of its property by a mortgagee) would upon its restoration unjustly have accrued to its contributories rather than to its creditors, such that, in the words of Roxburgh J, "common fairness" and "common justice" required that the creditors be entitled to their share. The creditors' claims were not of the type that would have led to contested litigation. Both the creditors and the contributories thought, wrongly as it turned out, that the company was simply not worth powder and shot. The unfairness arose from the fact that time ran against the creditors, but not against the contributories.
37. I must admit to some doubt whether the outcome in the Donald Kenyon case, however subjectively just on its own facts, really did implement the statutory purpose of the discretion now conferred by section 1032(3). But it was not criticised in the Regent Leisuretime case, nor by counsel on this appeal. I would therefore leave the question whether it should be followed to a case where it matters, on the facts.

The reasoning of the Judge

38. I have described how the Judge considered what she regarded as the obiter dictum of Jonathan Parker LJ in the Regent Leisuretime case, and disagreed with it. At paragraph 20 she reminded herself that a limitation direction would always cause prejudice to defendants who were thereby deprived of a defence, and that it was nothing to the point that the claim might be in respect of behaviour on their part that was utterly reprehensible. She rightly regarded the merits of the claim as relevant only to the extent that a limitation direction would not be given to allow the pursuit of an obviously unmeritorious claim. At paragraph 22 she described the discretion as a flexible one, to be exercised in a manner which the court considered would suit the justice of the case, and accepted that the company's attitude toward the claim at the time of its dissolution was a very important factor to take into account. At paragraph 30, she said that:

"it therefore seems to me that the essential question to focus on is why it was that the company did not bring those claims, when it was still in a position to have done so, via the liquidator, and that is the key point in this case."

39. Evidence in support of Mr. Hawkes' application as assignee (specifically, his own fourth witness statement) alleged that Mr. Valentine's failure to pursue the claims before the dissolution of the company was the result of an improper conspiracy between him, Mr. Kirkpatrick and Mr. Cook, but counsel for Mr. Hawkes firmly disclaimed any such case at the beginning of the hearing before the Judge. Counsel may have done so at an earlier CMC, but that makes no difference for present purposes. Nonetheless, the case was vigorously advanced on Mr. Hawkes' behalf, both to the Judge and on this appeal, that Mr. Valentine may have been inhibited from pursuing the claim, either because of threats by Mr. Cooke to report him to his professional regulator, or because of an over-cosy relationship between them.
40. At paragraph 41, recognising that this court had described the discretion to make a limitation direction in favour of the company as "an exceptional jurisdiction" the Judge started from the proposition that:

"had the Court been satisfied that this was a case in which the liquidator's decision was not open to any form of criticism, I would have refused to make the direction sought unhesitatingly…"

But she continued, at paragraph 42:

"There is, however, a serious concern in this case about Mr. Valentine."

She then conducted a detailed examination of the evidence relevant to this concern, which I need not describe, because she concluded as follows, at paragraphs 49 and 50:

"Having considered this matter long and hard, it seems to me that the Court cannot reach a conclusion on the evidence before it that Mr. Valentine has done anything wrong. On the other hand, there is still sufficient concern about his position and his independence, or lack of it, that the Court cannot discount the possibility that concerns about his own involvement in the transaction and the consequences for him personally had some bearing upon the decision not to pursue the litigation before the Company was dissolved.

This is not a straightforward case, but it does seem to me that it has exceptional and unusual features. I therefore have to ask myself, what would be the just thing to do if there is a real possibility that Mr. Valentine's decision not to pursue the claims was in some way, even subconsciously, influenced by the fact that he did not want to get into litigation with Mr. Cooke because of the fear for his own personal position were he to do so? Although he was not inhibited from reporting the matter to the DTI and to the police, a DTI investigation, or a police investigation, would not necessarily carry with it the same risks. That may be a completely distorted view of the position, but the possibility is there. Therefore this is not a straightforward case of saying the Company deliberately decided not to pursue the claim for good reason on the basis of independent legal advice, and on that basis only.

There is a danger that if the decision was taken for motives that were unconnected with the discharge of the liquidator's proper statutory duties, an injustice will have been done to the Company. For that reason, because that possibility is very much alive, despite the strong arguments, and having weighed up all of the factors in terms of prejudice, and considered all of the arguments that have been put forward so persuasively by Mr. Boardman, and echoed by Mr. Peachey in this case, I am going to exercise my discretion to the make the limitation direction that is sought."

Analysis

41. There are, in my judgment, a number of serious difficulties with the Judge's approach. Firstly, she concentrated almost exclusively on an analysis of the reasons why the Company had not pursued the claims by the time of its dissolution, to the exclusion of any analysis whether the claims would probably have been pursued, had the Company not been dissolved, either by the Company or Mr. Hawkes as its assignee, before the expiry of the relevant limitation periods.
42. Secondly, the Judge found (and this is not challenged by the Respondents) that Mr. Hawkes had not established, on the balance of probabilities, that Mr. Valentine had done anything wrong. There was, in her view as to the facts, no more than a possibility that he might have misconducted himself.
43. Thirdly, although the relevant possibility included the sub-possibility that misconduct by Mr. Valentine might have been improperly influenced by Mr. Cook, the Judge gave no consideration to the question whether it was therefore just to deprive Mr. Kirkpatrick, CLL and CLAM of a litigation defence, even though no allegation that Mr. Cook and he had acted upon Mr. Valentine in combination had been pursued.
44. The starting position was therefore that, as the Judge acknowledged, the Company appeared to have been put into dissolution by its liquidator after a decision that a claim could not longer be pursued and where, for the reasons which I have given, the burden must lie firmly on the Company or its assignee to demonstrate why it would be just to enable that abandoned claim to be pursued with the benefit of a limitation direction. A conclusion that there was only a possibility that Mr. Valentine had misconducted himself is in my judgment a wholly inadequate basis upon which to found a conclusion that a limitation direction in favour of the Company or its assignee should be made. A party seeking to discharge the burden of showing why it would be just to enable it (or him) to avoid the consequences of the limitation regime must do better than that. The court is concerned with probabilities, not possibilities.
45. It may be that, although she acknowledged the need to identify some exceptional circumstances, the Judge was led astray by her disagreement with the dicta in Regent Leisuretime that a company faces an altogether tougher burden than a creditor when seeking a limitation direction. Be that as it may, the combined effect of what I consider to have been those shortcomings in the Judge's analysis, both by giving no consideration to an important question, and placing inappropriate weight upon a mere possibility, compel a conclusion that the Judge's exercise of what was undoubtedly her discretion cannot stand. The question must therefore be reconsidered by this court, on the basis of the facts found (and not found) by the Judge, as to which there is no challenge by any of the parties.
46. I begin therefore with the question whether, had Mr. Valentine not put the Company into dissolution in April 2009, proceedings would have been brought either by the Company, Mr. Hawkes or some other assignee before the expiry of the relevant limitation periods in December 2010. The starting point is that Mr. Valentine had apparently exhausted all the possibilities available to him (after taking legal advice) to pursue the claim, either by litigating it himself as liquidator, or by assigning it for value. For his part, Mr. Hawkes had been offered but rejected an assignment of the claim in 2008, because of his impecuniosity. I have looked in vain for any evidence from him to the effect that he would have been in a position to pay for an assignment of the claims and undertake their litigation earlier than in fact he did, which was after the expiry of the relevant limitation periods. On the contrary, the burden of his evidence in support of his application for restoration of the Company to the register was that he wanted some liquidator other than Mr. Valentine to investigate the company's claim against Mr. Kirkpatrick, his companies and Mr. Cooke, with the benefit, so he hoped, of a favourable judgment in the Northampton County Court proceedings, if that could be obtained. In fact Mr. Hawkes obtained that favourable judgment only on 16^th December 2010 after the expiry of one of the relevant limitation periods, and only a few days before the expiry of the other. It was, as far as I can ascertain, Mr. Hawkes' success in those proceedings that reignited his hopes of pursuing them himself but only if, after enquiry by a new liquidator, they were not pursued on behalf of the Company. The second of the limitation periods would probably have expired before such an investigation by a new liquidator could have got off the ground.
47. On the necessarily hypothetical assumption that the company had not been dissolved, there is nothing in the evidence to suggest that Mr. Hawkes would have brought about the institution of proceedings, whether on behalf of the Company or by himself after assignment, before they became statute-barred in December 2010. Accordingly, I consider that the application for a limitation direction falls at the first hurdle. Putting the Company and all interested parties in the position which they would have enjoyed if there had been no dissolution would not, probably, have led to these claims being pursued in time.
48. But even on the alternative hypothesis that they might have been, nothing in the evidence, still less the facts found by the Judge, discloses circumstances which would make it just to give the Company or Mr. Hawkes as its assignee a second chance, after expiry of the limitation periods. The proper conclusion from the Judge's findings of fact is that Mr. Valentine was probably not guilty of any breach of duty in concluding his winding up of the Company and in putting it into dissolution when he did. He was not disabled by any lack of knowledge of the relevant facts. He had obtained competent legal advice, and done everything he could to pursue or alternatively sell the Company's causes of action. To the extent that he was inhibited by lack of funds under his control, by an inability to obtain litigation funding on a CFA or by the absence of any stakeholder both willing and able to take an assignment of the claims, these were exigencies for which the limitation regime provides no relief and for which the discretion under section 1032(3) should not be used as a substitute.
49. The position might have been otherwise had Mr. Hawkes been able to prove, to the usual standard, that the Company's dissolution without first pursuing or assigning its claims had been brought about by some nefarious conduct of one or more of the Appellants, but this Mr. Hawkes failed to establish to the satisfaction of the Judge.
50. For those reasons I would therefore set aside the limitation direction made by the Judge, and allow this Appeal.

Lady Justice King:

51. I agree.

Lord Justice Jackson:

52. I also agree.