England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
CARDIFF DISTRICT REGISTRY

		Cardiff Civil Justice Centre 2 Park Street, Cardiff, CF10 1ET
		19 February 2015

H.H. Judge Keyser Q.C.:

Introduction

1. On 20 March 2012 Heather Moor & Edgecomb Limited ("the Company") was struck off the register of companies and dissolved.
2. By a Part 8 claim form issued on 28 November 2013, the claimant, Mr Graham Davy, applied for the restoration of the Company to the register of companies pursuant to section 1032 of the Companies Act 2006. He also sought directions pursuant to section 1032(3).
3. On 1 July 2014 District Judge James made an order for the restoration of the Company to the register. (Upon restoration the Company was given the new name 1000654 Limited, as its former name was no longer available.) But he adjourned consideration of the directions that ought to be made in conjunction with the restoration of the Company. That matter came before me on 30 January 2015.
4. Mr Davy asserts that he has a claim for damages against the Company, arising from what he says was negligent investment advice given to him by the Company in 2001. He also says that he first had the knowledge required for bringing an action for damages in respect of the relevant damage, for the purposes of section 14A of the Limitation Act 1980, when he received advice from another financial adviser on 19 July 2011. After the Company had been restored to the register, on 17 July 2014 the parties concluded a stand-still agreement in respect of the applicable limitation period. Mr Davy commenced a claim against the Company on 16 January 2015, which I am informed was within the currency of the stand-still agreement. However, in order to preserve his position against any argument that his claim is statute-barred on account of an earlier date of relevant knowledge, the first direction that he seeks ("the Limitation Direction") is:

"That the period between the striking off of the Company and the making of the order for restoration is not to count for the purposes of any enactment, including the Limitation Act 1980, as to the time within which proceedings against the Company must be brought."

5. By itself, however, that direction will not improve Mr Davy's position, because the Company has neither assets nor the benefit of insurance cover. Mr Davy says that, within the period of two years preceding the dissolution of the Company, its assets were distributed to the shareholders, Mr and Mrs Pickering, the first and second defendants, although they had reason to be aware that claims such as that which he wishes to advance might lie against the Company. In order to restore those assets to the Company and render it capable of compensating him, he wishes to obtain an order for the winding up of the Company, so that the liquidator can make use of the transaction-avoidance provisions in the Insolvency Act 1986. As things stand, however, it is too late to make use of those provisions, because any winding-up petition would have had to be presented within two years of the relevant transactions. Accordingly Mr Davy seeks a further direction ("the Petition Direction") as follows:

"That if the claimant shall petition for the winding up of the Company within 14 days of the making of this Order the petition shall be deemed to have been presented on 20 March 2012."

6. Mr and Mrs Pickering did not oppose the restoration of the Company to the register, but they do oppose the directions sought by Mr Davy.
7. I am grateful to Mr Oram and Mr Adams for their helpful submissions, to which I have had regard, though I shall summarise them only briefly.

The facts in more detail

8. The Company was incorporated in 1971. At all relevant times until 2010, Mr and Mrs Pickering were the two directors and the only personal shareholders in the Company (the other shareholder being the Company retirement scheme) and Mrs Pickering was the secretary of the Company. The Company carried on business in the financial services industry. Mr Pickering was actively involved in the advising of clients. Mrs Pickering was not so involved; she provided administrative services to the Company.
9. Mr Davy, who is now 65 years old, was employed as a pilot by British Airways ("BA"). He left BA's employment on 15 October 2001, and shortly thereafter he transferred £610,398 out of BA's occupational pension scheme and into a private pension plan. He says that he did so in reliance on negligent advice given by Mr Pickering on behalf of the Company in 2001 and that as a result he has suffered very significant loss.
10. It does not appear to be seriously in issue that Mr Davy suffered loss by reason of his decision to transfer out of the occupational pension scheme, but Mr and Mrs Pickering deny that any advice given by the Company was negligent, and they also deny that Mr Davy relied on any such advice. It is not for me to adjudicate on the merits of Mr Davy's claim against the Company. However, in the light of his evidence in this case and of the determination of the Financial Services Compensation Scheme ("FSCS") mentioned below, the claim appears at present to have realistic prospects of success, subject to questions of limitation.
11. In mid June 2010 Mr and Mrs Davy caused the Company to sell its business (that is, its client list, but not its fixed assets) to a third party. I do not know what consideration was received for that sale or what became of any moneys received. The decision to sell the business appears to have been taken as part of Mr and Mrs Pickering's retirement planning and, perhaps, on account of Mr Pickering's significant health problems. A few days after the business was sold, the real property belonging to the Company was transferred to Mr and Mrs Pickering and a pension trust company. Mr Pickering resigned as a director of the Company on 15 July 2010; Mrs Pickering remained as director and secretary. No run-off insurance was obtained for the Company.
12. As I have said, it is Mr Davy's case that he first knew that he had a potential claim against the Company on 19 July 2011. By 28 July 2011 he had made a complaint to the Financial Ombudsman Service ("FOS").
13. On 28 July 2011 FOS wrote to Mr Pickering to inform him that it had received a complaint from Mr Davy against the Company regarding the mis-selling of a drawdown pension. The letter said that further information about the complaint could be obtained when the Company wrote to Mr Davy to confirm receipt of the complaint, and that the Company should issue a final response within eight weeks of receipt of the letter.
14. A file note from the FOS shows that on 4 August 2011 Mrs Pickering made a telephone call to the FOS, asking for details of its conversation with Mr Davy.
15. On 21 September 2011 Mr Pickering wrote to Mr Davy, confirming that the Company had received the complaint and that it was looking into it, which would involve retrieving the files from "deep freeze".
16. On 18 October 2011 Mr Pickering wrote again to Mr Davy, saying that the files had been retrieved and asking on what grounds the complaint had been made.
17. On 26 October 2011 the FOS wrote to Mr Pickering in respect of the complaint, enclosing a copy of the complaint form and requesting that the Company submit a statement of its case, documentation and any evidence on which it wished to rely before 9 November 2011.
18. It does not appear that the Company responded to that request.
19. On 17 November 2011 Mrs Pickering on behalf of the Company applied to the Registrar of Companies for the Company to be struck off the register pursuant to section 1003 of the Companies Act 2006. Mr Davy says—and there is no contrary evidence—that he was not provided with notice of the application as a creditor of the Company under section 1006(1) of Act. The application was advertised in the Gazette, but Mr Davy says, plausibly enough, that the advertisement did not come to his attention and that, if he had known of the application to strike the Company off the register, he would have objected.
20. Pursuant to the application, the Company was struck off the register under section 1003 and on 20 March 2012 was dissolved.
21. The papers show the following relevant information regarding the financial position of the Company.

The Company's balance sheet as at 31 January 2010 showed a surplus of £256,410 and a figure of £580,633 in respect of tangible assets. The notes showed that the figure for tangible assets included £577,287 in respect of freehold land.

On or about 26 June 2010 it transferred its freehold land as mentioned above.

The Company's last filed accounts, for the year ended 31 January 2011, showed that the Company had no fixed assets and that its current assets were valued at only £6731. There was a net deficiency on the balance sheet of £96,201. No provision was made for creditors with claims falling due after one year.

22. A point made on behalf of Mr Davy is that, although he had not intimated a claim against the Company by the time it disposed of its assets, Mr and Mrs Pickering had good reason to anticipate that such a claim might result, because a very similar claim had already been brought against the Company by a Mr Simon Lodge and had been upheld by the FOS. The facts of that earlier claim appear from the judgments in the Court of Appeal, refusing the Company's application for judicial review of the FOS's decision, in R (Heather Moor & Edgecomb Limited) v Financial Ombudsman Service [2008] EWCA Civ 642 (11 June 2008). Mr Lodge was a BA pilot who was approaching compulsory retirement with BA but hoping to continue working for some years with another airline. In 1999 Mr Pickering advised him to leave the BA pension scheme on his retirement and invest in an equities fund in a personal pension plan. The advice was backed up with some very positive assessments of the growth likely to be achieved in the equities fund. Mr Lodge followed Mr Pickering's advice, but the anticipated growth was not achieved and the value of the pension fund actually fell by 23%, leaving Mr Lodge by his own estimate in the position of needing £340,000 to obtain the benefits he would have received if he had remained in the BA occupational pension scheme. The Company rejected his complaint, but on 23 November 2006 the FOS upheld the complaint and directed that the Company arrange an assessment of Mr Lodge's loss and pay the amount of that loss up to the sum of £100,000, the maximum amount in respect of which the FOS could make a direction. The FOS recommended that the Company compensate Mr Lodge for any loss exceeding £100,000.
23. At all events, on 12 April 2012 the FOS wrote again to Mr Pickering concerning Mr Davy's complaint. It is probable that the reason why the letter was written was that no substantive response had been obtained from the Company, and that it was as a result of the letter that it came to FOS's attention that the Company had been struck off.
24. The FOS could take things no further; its remit was to direct or recommend compensation, but it could not itself pay compensation. Accordingly the FOS passed the matter to the FSCS, which on 27 June 2012 acknowledged receipt of Mr Davy's completed application form.
25. On or about 18 December 2012 FSCS made an offer of compensation to Mr Davy. It was based on an assessment that his Eligible Loss was £617,507.42; but the offer was of £50,000, which was the statutory maximum payment under the Scheme. Mr Davy accepted the offer on 25 February 2013.
26. The award of compensation under the Scheme had the effect of assigning Mr Davy's rights against the Company to the FSCS. By a Deed of Reassignment dated 31 October 2013, the FSCS reassigned those rights to Mr Davy.
27. By 2 November 2013 Mr Davy had made enquiries with the Treasury Solicitor regarding the possible restoration of the Company to the register. He commenced the present claim on 28 November 2013.

Part 31 of the Companies Act 2006

28. Before the Companies Act 2006 ("the Act") came into force, there were two distinct routes for the restoration of companies that had been struck off the register. One route, found previously in section 353(6) of the Companies Act 1948 and latterly in section 653 of the Companies Act 1985, gave the court a power in specified circumstances and exercisable for up to twenty years after the company had been dissolved to order the restoration to the register of a company that had previously been struck off by the Registrar of Companies. The effect of such an order was that the company was deemed to have continued in existence as if it had not been struck off the register; there was an ancillary power, in materially similar terms to those of section 1032(3) of the Act, to give directions. The other route, found latterly in section 651 as amended of the Companies Act 1985, gave the court a power to declare the dissolution of the company to have been void. This power was exercisable only within two years of the dissolution of the company. The effect of exercise of the power was that such proceedings might be taken as might have been taken if the company had not been dissolved.
29. Those former routes have been replaced by a new single procedure for the restoration to the register of companies that have been struck off, contained in Part 31 of the Act. For present purposes the following provisions of the Act are relevant.

"Section 1003

(1) On application by a company, the registrar of companies may strike the company's name off the register.

(2) The application—(a) must be made on the company's behalf by its directors or by a majority of them, …"

"Section 1006

(1) A person who makes an application under section 1003 (application for voluntary striking off) on behalf of a company must secure that, within seven days from the day on which the application is made, a copy of it is given to every person who at any time on that day is … (c) a creditor of the company."

"Section 1011

In this Chapter [sections 1000 to 1011] 'creditor' includes a contingent or prospective creditor."

"Section 1029

(1) An application may be made to the court to restore to the register a company … (c) that has been struck off the register … (ii) under section 1003 (voluntary striking off), whether or not the company has in consequence been dissolved.

(2) An application under this section may be made by … (f) any person with a potential legal claim against the company, … (i) any person who was a creditor of the company at the time of its striking off or dissolution."

"Section 1030

(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.

(2) No order shall be made on such an application if it appears to the court that the proceedings would fail by virtue of any enactment as to the time within which proceedings must be brought.

(3) In making that decision the court must have regard to its power under section 1032(3) (power to give consequential directions etc) to direct that the period between the dissolution (or striking off) of the company and the making of the order is not to count for the purposes of any such enactment.

(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 …"

"Section 1031

(1) On an application under section 1029 the court may order the restoration of the company to the register … (b) if the company was struck off the register under section 1003 (voluntary striking off) and any of the requirements of sections 1004 to 1009 was not complied with; (c) if in any other case the court considers it just to do so."

"Section 1032

(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."

Discussion

30. The discretion under section 1032(3) is a wide one. It is confined only by the touchstone of justice ("as seems just") and by the express purpose that the directions must serve ("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").
31. Dicta in three cases may serve to illustrate the courts' general approach to the exercise of the power in section 1032(3). (Two of the cases concerned the final limb of section 353(6) of the Companies Act 1948, which was in materially identical terms.) In Re Lindsay Bowman Limited [1969] 3 All ER 601, 603E-G, Megarry J said:

"One example of the use of this limb is in inserting in the order a provision that in the case of creditors who were not statute-barred at the date of dissolution, the period between the date of dissolution and the date of restoration to the register is not to be counted for the purposes of any Statutes of Limitation: see, for example, Re Donald Kenyon Ltd [1956] 1 W.L.R. 1397. Such a direction seems to me to effectuate the general purpose of the concluding limb of the subsection. If a creditor had six years in which to sue the company, and his time ran out after the company had been defunct for five years, he would have had only one year in which he could effectually have sued the company. He may justly say that he ought not to have been deprived of five years. He cannot have the precise five years which he has lost, but he can be given another five years by way of replacement. This will put him 'in the same position as nearly as may be as if the name of the company had not been struck off'. I may add that Re Huntingdon Poultry Ltd [1969] 1 W.L.R. 204 shows that such a provision will be inserted in the order only if sufficient grounds for doing so appear, and not as a matter of routine …"

In Jodrell v Peaktone Ltd [2013] 1 WLR 784, Munby LJ, with whom Etherton and Lewison LJJ agreed, gave his reasons for dismissing the appeal and added some further observations, among them the following:

"[44] First, the words 'general effect' in section 1032(1) cannot be read … as cutting down the otherwise unrestricted language of the subsection. The significance of these words is to signal that the 'general' provision in section 1032(1) is subject to what follows in sections 1032(2) and 1032(3).

…

[46] Third, the sweeping effect of section 1032(1) is illustrated by section 1032(3), which enables the Companies Court to make directions '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'. That, as it seems to me, is a powerful and illuminating indication of the policy which Parliament had in mind. As Sir Raymond Evershed MR observed in Tyman's Ltd v Craven [1952] 2 QB 100, 111, of the corresponding provision in section 353 of the 1948 Act, these words

'seem to me designed, not by way of exposition, to qualify the generality of that which precedes 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.'"

It is convenient to set out slightly more of that dictum of the Master of the Rolls in Tyman's Ltd v Craven:

"[S]ome sensible content must be given to the final words of the subsection, and this problem at first seemed to me to create a difficulty in the company's way. Without, however, attempting to define the scope of the words exhaustively, counsel for the company was able to give instances in answer to the question put to him. During the period of the company's suspended animation the company, as well as third parties, might well have abstained from taking those steps—a step in the action, or the exercise of some contractual right—for which the proper time might have in the meantime expired. In my judgment, the final words of the subsection 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 subsection seem to me designed, not by way of exposition, to qualify the generality of that which precedes 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."

32. Before me, Mr Adams accepted that the court had jurisdiction to make both the Limitation Direction and the Petition Direction; his submission was that the discretion ought not to be exercised to make those directions on the facts of this case. A tentative submission that a limitation direction was inappropriate on the ground that it is always possible to commence invalid proceedings against a dissolved company and have them retrospectively validated by the restoration of the company to the register (Tyman's Ltd v Craven [1952] 2 QB 100 and Jodrell v Peaktone Ltd [2013] 1 WLR 784) was not maintained with vigour; rightly so, because it is inconsistent with the way in which the courts have approached limitation directions since 1952 and because it would threaten to penalise the practically sensible and legally commendable course of not commencing invalid proceedings.
33. The Limitation Direction and the Petition Direction, though distinct, are closely related for practical purposes. The ability of the damages claim to withstand a limitation challenge is necessary to establish Mr Davy's status as a creditor of the Company. But the Petition Direction is the only route by which that status can be given practical significance by making it possible to restore the Company to solvency. Argument at the hearing focused primarily on the Limitation Direction, no doubt because it is logically prior and is a direction of a kind that has been considered by the courts in other cases (I was not referred to any case in which a direction such as the Petition Direction had been considered). There is, at all events, a large degree of overlap between the issues applicable to the two directions.
34. Mr Adams submitted that the Limitation Direction was unnecessary, because Mr Davy had in fact commenced proceedings within what is, on his case, the relevant limitation period. That does indeed seem to me to be a relevant matter. However, it is not determinative. Mr and Mrs Pickering and the Company do not accept that Mr Davy's date of knowledge for the purposes of section 14A of the Limitation Act 1980 is as late as 19 July 2011. They must therefore acknowledge the possibility that it will be found to be earlier than that date. Indeed, there is clearly scope for an argument on this matter, because it appears to be Mr Davy's case that it was on 19 July 2011 that he was told of Mr Simon Lodge's earlier claim and was told that he too might have a similar claim to compensation from the Company. However, section 14A provides that the knowledge that will start the alternative limitation period running involves knowledge of the material facts about the damage suffered and knowledge that the damage was attributable to the acts or omissions complained of against the Company, but that it does not include knowledge that those acts or omissions involved negligence as a matter of law. I am not concerned to determine the limitation issue. But it is necessary to consider whether, beyond the simple order for restoration, a further direction is required to achieve the purpose mentioned in section 1032(3).
35. Mr Adams submitted that a direction such as the Limitation Direction was only to be made in exceptional circumstances. He sought to draw support for that submission from the judgment of Jonathan Parker LJ, with whom Schiemann and Keene LJJ agreed, in Regent Leisuretime Ltd v NatWest Finance Ltd [2003] BCC 587, a case under section 653 of the Companies Act 1985. At 603 Jonathan Parker LJ said:

"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 for 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., ss. 14A, 32 and 33). The effect of a limitation direction under section 65(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.

91. In the instant case, I cannot discern any such exceptional circumstances as might serve to justify the limitation direction …"

36. In my view, the judgment of Jonathan Parker LJ does not lay down any test of "exceptional circumstances" that is applicable to the present case. (I very much doubt whether he was intending to lay down any legal test at all; his remarks seem rather by way of observation as to the infrequency with which a direction of the kind sought in that case would be justified.) As the passage makes clear, the Court of Appeal was concerned with a different situation from that which is before me. The company, Regent, had been restored to the register on the application of its directors, pursuant to section 653 of the Companies Act 1985, for the purpose of enabling it to bring a claim against the bank, which they said had caused Regent loss and damage by making fraudulent misrepresentations. As Jonathan Parker LJ observed, "considerations of essential fairness" may more readily justify interference with the limitation regime in the interests of adversely affected third-party creditors than in those of the company that itself has both failed to bring its claim and allowed itself to be struck off the register.
37. Nonetheless, I consider that Mr Adams is correct to submit that the logic of Jonathan Parker LJ's dictum requires that, in the case of third-party creditors as in that of the company itself, one have proper regard to the regime in the Limitation Act 1980. The dictum makes clear that any limitation direction, if it has any effect, will tend to override the statutory limitation regime. The fact that this result may be more readily justified by considerations of common fairness when the interests of third parties are concerned does not detract from the need to show proper grounds why such a direction should be made. The dictum of Megarry J in Re Lindsay Bowman Limited (above) also makes clear that a limitation direction must be justified in each case and is not a matter of routine.
38. An example of a limitation direction, in that case made under section 353(6) of the 1948 Act, is in Re Donald Kenyon Ltd [1956] 1 W.L.R. 1397, [1956] 3 All ER 596. The company's assets had been taken by its mortgagee, and some years later the company had been dissolved, at a time when it was possible that it had debts that were not statute-barred. Much later, the sole director and shareholder applied for the restoration of the company, with a view to recovering a surplus of proceeds of sale held by the mortgagee and distributing them to himself, any possible debts of the company by then being statute-barred. In the face of opposition from the director, Roxburgh J held that a limitation direction ought to be included for the protection of creditors whose debts had not become statute-barred at the date of the dissolution. At 599 in the All England report, he explained his decision as follows:

"At the date of the dissolution those creditors whose debts were not already statute-barred could have stopped the period of limitation running against them by issuing, and perhaps serving, a writ. Counsel said that after the dissolution a creditor could have applied to have the name of the company restored to the register and then have issued his writ. It seems to me, however, that, when a company has been dissolved and, therefore, nobody can sue it without having its name restored to the register, it is only common fairness that, if the contributories for purposes of their own want to have the company's name restored to the register years later, the period between the dissolution and the date of the restoration should be disregarded for the purposes of the statutes of limitations.

I do not think that counsel really suggested that by doing this I was violating the Limitation Act 1939. He did suggest that I was violating the policy of that Act but, with all respect to him, this case does not seem to have been envisaged by that Act at all. … Common justice requires that some such provision as that which I have suggested should be inserted. … It is, I think, true to say that I am giving perhaps some slight benefit to the creditors as against the company, but it will be observed that s. 352(6) says 'as nearly as may be', contemplating that the precise equation may be unattainable. In my judgment, I am much nearer precise equation if I put some stipulation in the order than I should be if I did not."

In Regent Leisuretime at 598 Jonathan Parker LJ referred with approval to part of the judgment in Re Donald Kenyon Ltd, including part of the passage set out above, and expressed the view that Roxburgh J's decision was plainly right. As Mr Adams pointed out, the facts of that case were very different from those of the present case. But the approach of Roxburgh J seems to me to be instructive nonetheless.

39. Mr Oram submitted that the dissolution of the Company deprived Mr Davy both of the period from dissolution to restoration during which an earlier claim, less liable to fail on limitation grounds, could have been issued, and of the period from March to June 2012 during which the presentation of a petition for the winding up of the Company would have been at a "relevant time" so as to enable a liquidator to recover assets into the Company under sections 238 and 239. Mr Davy suffered this deprivation in circumstances where the directors procured the dissolution of the Company when they well knew of Mr Davy's complaint and did not give the required notice of the application to strike the Company off the register, and where the failure of the Company to respond substantively to the complaint and its subsequent dissolution caused a delay in establishing the validity of the claim.
40. In reliance on Megarry J's dictum in Re Lindsay Bowman Ltd (above) and the decision of the Court of Appeal in Re Forte's (Manufacturing) Ltd [1994] B.C.C. 84, Mr Oram submitted that what mattered was not whether Mr Davy would have petitioned for the winding up of the Company but whether he had been deprived of the opportunity to do so, and that it was no objection to the directions sought that they would put Mr Davy in a better position than he would have been in if the Company had not been dissolved. I accept both of those submissions but with significant caveats, which are necessary because in oral argument Mr Oram tended to slip dangerously close to suggesting that, in the exercise of the statutory discretion, the touchstone of justice could cut loose of its moorings in the statutory purpose.
41. As to the first submission, it is better not to superimpose any additional test on the statutory provision. And the courts have not made it a requirement that it be shown that the party gaining the benefit of the limitation direction would otherwise have commenced proceedings within the limitation period (cf. Re Donald Kenyon Ltd, where admittedly the third-party creditors were not present). However, Megarry J was clearly not intending to say that the mere loss of a period when a claim could be commenced against an extant defendant was a loss of opportunity that established the right to a limitation direction. In Regent Leisuretime at [91] Jonathan Parker LJ found additional support for the inappropriateness of a limitation direction in the fact that the applicant had not in fact taken any steps to procure the company to bring an action during the limitation period, although he had been unaware that the company had been struck off the register.
42. As to the second submission, the judgment of Roxburgh J in Re Donald Kenyon Ltd, cited above, provides a neat illustration of the correct approach to directions that might put the recipient of the limitation direction in a better position than it would ever have occupied. I do not think that the decision or judgment in Re Forte's (Manufacturing) Ltd advances the matter greatly. The facts, somewhat simplified, were as follows. The claimant owned premises, of which it was the landlord and the company was the original tenant. The company assigned its lease to A1, who assigned to A2, who assigned to A3. A3 went into insolvent liquidation and the liquidators disclaimed the lease. At more or less the same time, the company was dissolved upon the conclusion of a members' voluntary winding up. The landlord did not prove in the company's winding up; if it had done so, it would have been only a contingent creditor, because at that time A3 was still trading and paying the rent, and its claim would not have been worth much. But now that A3 had become insolvent, the landlord wanted to restore the company, so that the liquidator could enforce the company's right to be indemnified in respect of rent by A1. The judge refused to make an order under section 651 because such an order would place the landlord (who would stand to recover all its rent) in a better position than it would have been in if it had proved as a contingent creditor in the members' voluntary winding up. The Court of Appeal reversed that decision. Hoffmann LJ, with whom Henry LJ and Sir Thomas Bingham M.R. agreed, noted at 89 that a creditor might submit a proof or amend an existing proof at any time during the liquidation, that the finality of the dissolution upon conclusion of the winding up was qualified by section 651, and that the liquidation could be reopened and new or increased claims made upon the exercise of the section 651 jurisdiction. Therefore the judge had been wrong to rule out the exercise of the jurisdiction on principle. None of this seems greatly to illuminate the present application, and it certainly does not suggest that the discretion under section 1032(3) may properly be used for any purpose other than to put persons "in the same position (as nearly as may be) as if the company had not been dissolved or struck off the register". The notion that the discretion may, untrammelled by that purpose, be used generally as a means for achieving some kind of justice merely because Mr Davy has suffered losses and Mr and Mrs Pickering would otherwise avoid compensating him is too broad and gains no support from Re Forte's (Manufacturing) Ltd.
43. Consideration of what is required to place persons in the same position, as nearly as may be, as if the Company had not been dissolved or struck off the register is made more difficult, particularly in a case such as the present, by the unavoidable element of the counterfactual that is involved. It does seem to me, however, that Mr Oram is correct to say that there was a window of opportunity, if only a small one, in which Mr Davy might have established the merits of his claim to the satisfaction of the FOS and been able to present the petition that he now seeks to present and bring the claim that would underpin such a petition. It is quite impossible to know whether he would have achieved those steps; that impossibility, however, arises out of the conduct of Mr and Mrs Pickering in bringing about the dissolution of the Company. If justice requires that the effects of the striking-off of the Company be undone by restoring to Mr Davy his lost opportunity, the risk that his position will be improved over what it might have been—perhaps because he is better able to take advantage of the opportunity—seems to me to be the price of seeking the best attainable equation of positions under section 1032(3).
44. Mr Adams objects that the Petition Direction would not achieve its intended goal, because even if the period of dissolution were disregarded a period of more than two years has elapsed since the transactions in June 2010. However, section 1032(3) does not limit in this way the power of the court to give directions. If it is required by the purpose of the subsection, a direction may be given in terms such as that sought by Mr Davy (paragraph 5 above). Further, the present case is somewhat unusual, because the order for restoration of the Company to the register was made significantly before the application for directions was heard.
45. Accordingly I shall make the Limitation Direction and the Petition Direction. Whether these will ultimately avail Mr Davy is not for me to say. I have already identified a potential issue regarding the applicable date of knowledge for the damages claim. As regards the insolvency route, there is an initial question as to whether Mr Davy can establish that he is a creditor of the Company entitled to a winding-up order; I need say only that his case in that regard seems to be properly arguable. If he obtains a winding-up order, there will still be the question whether the liquidator can establish any entitlement under the transaction-avoidance provisions of the Insolvency Act 1986.
46. I distributed this judgment in draft and indicated that I intended to hand it down, in the absence of the parties, some time during this week. As the parties have not been able to agree the appropriate terms of the order, even on matters other than costs and permission to appeal, I shall adjourn further consideration of the terms of the order to a telephone hearing.