Scottish Court of Session Decisions

This is a petition brought in terms of section 653 of the Companies Act 1985. The petitioner seeks an order under that section, restoring the name of a company to the Register of Companies in Scotland. The company in question, Management Strategy Limited, was incorporated in Scotland, in 1984, and was struck off the Register, in terms of section 652(5) of the 1985 Act, in July 1991. By interlocutor of 2 October 1998, the Lord Ordinary sustained two preliminary pleas-in-law for the respondents and dismissed the petition. The petitioner reclaims.

The circumstances surrounding the striking off of the company, and those giving rise to the request for restoration, are somewhat complicated, and indeed obscure. But the Lord Ordinary's dismissal of the petition, and this reclaiming motion, turn upon a single issue, of limited scope.

Section 653(2) of the 1985 Act empowers the Court in certain circumstances to order that a company's name be restored to the Register. In terms of sub-section (1), sub-section (2) applies if a company or any member or creditor of it "feels aggrieved" by the company "having been" struck off the Register. In the present case, the petitioner claims to be a person who is aggrieved by the company having been struck off the Register. The respondents aver that he is not, and their first two pleas-in-law are pleas seeking dismissal, on the basis of want of title and interest and irrelevancy. It is upon this basis that the Lord Ordinary has dismissed the petition.

Despite the complexities and obscurity which I have mentioned, which are reflected in the petitioner's pleadings, I think that the historical background relied upon by the petitioner can be expressed fairly baldly. In 1989, the company became entitled to payment of a substantial sum of money by a bank, Banque Leu Genève SA, subject to certain suspensive conditions. In terms of a letter to the bank, the company transferred its right to payment, to another company, Kimble International SA. The suspensive conditions were satisfied only after the company had been struck off and dissolved. The company having been dissolved, the bank refuses to make payment to the transferee Kimble, but would apparently make payment if the company were restored to the Register. Restoration is sought in order that this may come about.

The petitioner is an individual, Fabrizio Conti. The respondents are a Swiss company, the name of which was UeberseeBank AG until 15 December 1998, but is now AIP Private Bank Limited. The respondents' interest in this matter, put shortly, is that if the bank can avoid paying the sum of money owed by them to either the company or Kimble, the respondents would have a claim in respect of that sum against the bank. If the bank's debt to the company has not been validly transferred to Kimble, the respondents thus have interest in the original creditor, the company, remaining "dead", so that payment cannot be made to it.

The petitioner's involvement is also at one remove. If the transfer of the company's right to Kimble is invalid by reason of the company's dissolution (a matter currently subject to arbitration) then Kimble will have lost the benefit of that transfer, and it is averred that they have intimated to the petitioner that in that event, they will seek damages from him for that loss. That claim for damages would evidently be based upon what is in any event a crucial fact in relation to this petition. The striking off of the company was in response to an application by the company, seeking to be struck off, and it was the petitioner who both chaired the meeting of the company's board of directors which resolved to apply to the Registrar, and who wrote to the Registrar applying for the company to be struck off. If as a result of the arbitration proceedings, the bank are held liable to pay the sum of money to Kimble, the petitioner would apparently no longer have anything to worry about. But unless or until the arbitration has that favourable outcome from his point of view, he is subject to this potential claim and a possible liability in damages.

The Court's power to order restoration of the company's name in terms of section 653(2) arises, inter alia, if the Court is satisfied "that it is just that the company be restored to the Register". The petitioner's position is that in the foregoing circumstances, it would indeed be just that the company be thus restored, the consequence of which in terms of section 653(3) would be that the company would be "deemed to have continued in existence as if its name had not been struck off".

As I have indicated, the fundamental issue arises in relation to section 653(1) of the 1985 Act. Is the petitioner (or has he relevantly averred that he is) a member of the company who "feels aggrieved by the company having been struck off the Register"? The submissions advanced on behalf of both parties in relation to this question were somewhat bewilderingly numerous. But in my opinion they can be regarded, without any real unfairness, as reducible to two general matters of dispute, together with two specific points of relevancy.

Of the two general issues, one is a quite broad question as to whether one must be aggrieved at the time of the dissolution, or may become aggrieved subsequently. The other relates to the specific position of someone who, like the petitioner, was responsible for the striking off, so that he is perhaps not entitled to "feel aggrieved", or say that he is aggrieved, by something which he effectively did himself.

Before turning to these matters which require consideration, I should mention certain matters which, in my opinion, do not. First, there was an argument advanced before the Lord Ordinary to the effect that the remedy provided by this section was one which would only be granted in the last resort, it being contended that that was not the position in this case. The Lord Ordinary did not dispose of that matter, it being accepted that if the petitioner had relevant averments supporting his claim to be a person aggrieved, the appropriate procedure would be for the case to go to proof before answer. Secondly while it was to the company that the bank came under an obligation to pay the money in question, it appears that the company's right to the money was not a simple beneficial right of its own, since the company was in a fiduciary role, with the beneficial interest being vested in Kimble. The assignation, if valid and effective, would thus apparently merely remove the company, as a fiduciary intermediary, and create a direct obligation by the bank, owed to Kimble beneficially. There may be some uncertainty as to whether this is the position; and it certainly seems to me that there is some obscurity as to why, in the first place, the company was interjected so as to be the bank's creditor. These matters may perhaps have some bearing upon the question which would arise after proof, as to whether it was "just" that the company should be restored to the Register. But they do not appear to me to have any useful bearing upon the question of whether the petitioner is a person who falls within the scope of sub-section (1). I therefore say no more about them and turn to the issues which arise in relation to that sub-section.

It is not disputed that the petitioner was a member of the company prior to and at the time of its removal from the Register. While, in a sense, it can be said that he is no longer a member of the company once the company is no longer on the Register, I find it both natural to describe anyone who was a member of a company which has been removed from the Register as a "member", and obvious that the word is being used in that way in sub-section (1). As regards the expression "feels aggrieved" which is perhaps suggestive of a merely subjective dissatisfaction, it is not disputed that this is not the effect of the word "feels"; it is accepted that the word "feels" can be read as if it was "is", and moreover that in order to be aggrieved for the purpose of this sub-section, subjective dissatisfaction is not enough: there must be something which can fairly be regarded as an objective grievance.

The first general issue is as to the date at which such a grievance must exist for the purposes of section 653(1). The removal of the company from the Register occurred after the constitution of the bank's debt to the company, and after the transfer of that debt to Kimble. Moreover, it appears that the factual history upon which any relevant liability by the petitioner to Kimble would depend (including, for example, any inefficacy of the transfer resulting from the removal of the company from the register) must have reached their completion, and indeed, culmination, with the removal of the name from the Register. Subsequent to the removal of the name, certain parties have adopted or asserted certain positions, as to the legal consequences of events up to and including the removal. And there have perhaps been changes, subsequent to the removal, in knowledge or understanding. Moreover, the suspensive conditions which qualified the bank's obligation were satisfied, as I have said, only after the removal. But that apart it does not appear to me that any substantive new event has occurred since the removal, which could be seen as bearing upon the question of whether the petitioner can be said to be aggrieved.

In concluding that the petitioner could not properly be regarded as a person who "feels aggrieved" by the company having been struck off the Register, the Lord Ordinary proceeded upon the basis that the issue had to be considered as at the date of the striking off, and that, having regard to the admitted facts concerning the striking off, the petitioner was instrumental in engineering the striking off, and therefore could not be an aggrieved person. In reaching his decision on these issues, the Lord Ordinary relied substantially upon certain authorities, in particular Harrop v Bayley etc. (1856) 25 LJ (MC) (CA) 107; In re AGA Estate Agencies Ltd 1986 PCC 258; and In re New Timbiqui Gold Mines Limited [1961] 1 Ch. 319.

In submitting that the Lord Ordinary was in error, and that the petitioner had relevant averments in terms of section 653(1), Mr Williamson for the petitioner contended that in considering the meaning of that subsection, one should start by looking at its terms, and in particular the tenses of the verbs used. The remaining provisions of the section apply if a company or any member or creditor of it "feels" (in the present tense) aggrieved by the company "having been" struck off. The fact that application for restoration could be made, in terms of section 653(2), at any time over a period of 20 years indicated that allowance was being made for the emergence of new facts or new knowledge at some time during that period. One would therefore expect that the grievance must exist at the time of the application, and not necessarily at some earlier date. This expectation was confirmed by the terminology and tenses of subsection (1). In looking at an application, the Court would have to ask itself questions about the position at the time of the application. Does subsection (2) apply, now? Is the petitioner a member who feels aggrieved, now? And is he aggrieved by the company (now) having (previously) been struck off the Register? It is the fact of having been stuck off that is important: there is no indication that the date of striking off is important. One could not be aggrieved by a company having been struck off until it was struck off. But at least usually, the bare fact of striking off was unlikely, in itself, to constitute a grievance. The grievance would almost always flow from a combination of striking off with some other circumstances. These could of course be prior circumstances. But as regards subsequent or emergent circumstances, it would always be for the court to decide whether the relationship between the striking off and those circumstances was such that it would be proper to say that the petitioner in question was aggrieved "by" the company having been struck off. For that to be a correct description of the situation, it was not essential for the striking off to be the last relevant event to occur.

Leaving aside for the moment the authorities to which reference was made, and ignoring for the moment any speciality that may arise from a petitioner having some responsibility for the striking off having occurred, it did not appear to me that counsel for the respondents advanced any substantive argument in reply to these contentions made on behalf of the petitioner. It appeared to be suggested that "feels aggrieved by the company having been...." could or should be read as, or as having the same effect as, "felt aggrieved by the company being..." - a form of words which would indicate that one was to look at the past date of striking off, rather than the present date of the court considering the matter. But it did not seem to me that any argument was advanced, on the basis of either ordinary language or the statutory provisions, which would support the equiparation of the two forms of expression, or the substitution of the latter hypothetical form for the former actual one. Nor was there any explanation as to why a period of 20 years should be allowed for the making of the application, if the existence of the grievance was to be determined purely by looking at events prior to or at the time of the striking off. Indeed, senior counsel for the respondents, speaking last, conceded that it would be appropriate in certain cases to look at the up-to-date position at the time of the application, and that a petitioner who had played no part in the original striking off would be entitled, in submitting that he had a grievance at the time of the application, to found, at least in some cases, upon events or knowledge which had emerged after the striking off.

Upon the language of the provisions, and indeed in terms of what one would expect, I am satisfied that these concessions were correctly made, and that the petitioner is well-founded in contending that the date when the grievance must exist is the date of the application, and that in determining whether there is a grievance one is not necessarily limited to a consideration of the situation as it was at the date of striking off. Some of the authorities cited to us are concerned with this question of the tempus inspiciendum, and when the grievance must come into existence. However, since the present case, like some of the cases cited, also raises the issue of whether a person can be "aggrieved" if he was involved in the striking off, and since that issue may interrelate with questions as to the tempus inspiciendum, I find it convenient to leave over consideration of other cases, until after a discussion of the general contentions of the parties in relation to this second main issue.

I did not understand Mr Williamson, on behalf of the petitioner, to be submitting that a person who deliberately had the company struck off could claim to be aggrieved, if at the time when he did so he appreciated that the effect of striking off would be as it turned out to be. In such circumstances, he would be responsible not merely for the striking off, but also for its known or expected consequences. But as with the issue relating to the dates, Mr Williamson emphasised that any grievance would be brought about not by the bare fact of the company having been struck off, but the combination of that fact with other circumstances, prior or subsequent. One might bring about or engineer the striking off, which could thus be seen as one's deliberate act; but in ordinary terms, that would not debar one from saying that one was aggrieved by its having been struck off, if the combination of the striking off with subsequent, or subsequently discovered, circumstances produced some kind of detriment. The most obvious example would be someone who had a company struck off, in the reasonable belief that it had no assets, and subsequently either discovering that there had been assets all along, or that some benefit had arisen to which the company would have become entitled, if only it had not been struck off. In such cases, it would be entirely natural to say that one was aggrieved. And one would be aggrieved not by the fact that there were assets after all, nor by the benefit which would have gone to the company it if had not been struck off. One would be aggrieved, in the circumstances by the company having been struck off. (And in such circumstances, other things being equal, it would indeed be "just" that the company be restored to the register, if a member or creditor could thus be allowed to take a benefit which would have been his but for the company having been struck off.) The considerations which established that a member or creditor who had taken no part in the striking off could rely upon subsequent or supervening circumstances, in showing that he was aggrieved by the company having been struck off, applied equally to a person who had deliberately or intentionally been involved in having the company struck off, but had not, in so doing, intended to deprive the company (or members or creditors) of benefits which, as things turned out, would have accrued but for the company having thus been struck off.

The contention advanced on behalf of the respondents, to the effect that one could not be aggrieved by the company having been struck off if one had a responsibility for the striking off was founded primarily upon what was said to be the ordinary meaning of the words. Whether or not later circumstances could in general be considered, in support of a submission that a person was aggrieved, such later circumstances had no bearing upon the question of whether it was that same person who had decided to have the company struck off, and had acted in order to have it struck off. That decision, and that action, remained the same. And as a matter of ordinary English, a person could not be aggrieved by his own decision or his own act. Like anyone else, a person who had thus decided upon and brought about the striking off might be able to say, in the light of emerging circumstances, "the striking off has turned out to be detrimental to me, in a way which I did not foresee". But the fact that the striking off might thus have been discovered to be a mistake, or unwise, and to have unintended and perhaps unforeseeable consequences, did not bear upon the fundamental point, which was that the striking off was effectively his own act, and thus an act by which he could not claim to be aggrieved. He might well be dissatisfied, or disappointed, but unless one gave "aggrieved" an unnatural and special meaning, he could not in these circumstances be "aggrieved".

I do not doubt that as matter of ordinary language, one cannot naturally speak of being aggrieved by one's own act. But the submissions by the respondents upon this issue seem to me to rest eventually upon the same unsound basis as their general submission that one must look only at the time of striking off. It may be that if one was concerned with the question of whether a person could say, at the time of effecting or engineering the striking off, that he was thereby aggrieved, the answer would be that it did not lie in his mouth to say so. But if, after he had thus effected or engineered the striking off, by what in itself could in itself be described as an intentional or deliberate act, and if at a subsequent date it emerged in some way that there was a benefit which would otherwise have accrued to him, it does not appear to me to be contrary to the ordinary use of language to say that at that later date he is aggrieved - not by his original act of striking off the company, but by the fact that, at the date of the new event, the company "has been" struck off and no longer exists. The respondents' argument appeared to me to ignore what one may call the present sense of the perfect tense. It would always be a matter of circumstances, in my opinion, but if an unexpected benefit is discovered, which would have accrued to a member or creditor but for the company having been struck off, then I think it may be, and often will be, appropriate to hold that he has not only in broad terms a legitimate grievance, but that this grievance is so directly related to the fact that the company has been struck off, and in consequence no longer exists, that the member or creditor in question is indeed aggrieved "by" the company having been struck off. Unless persuaded or obliged by authority to take a different view, I would thus reject the contentions advanced by the respondents not only as to the tempus inspiciendum, but also as to the petitioner falling outside the scope of section 653(1) because of the part he played in the original striking off.

I turn to the authorities. I have not found them to be of any great assistance. In re AGA Estate Agencies Limited was a case in which the debt in question had been incurred after the company had been struck of the register. In such a situation, one might well say that the creditor was not aggrieved "by" the company having been struck off, without deciding more broadly that there must have been a grievance at the time of the striking off. In any event, however, the judge in that case followed the decision in New Timbiqui Gold Mines Limited, without (so far as I can see) casting further light on the problem.

In the Timbiqui case, it was held that a member of a company could not say that he was aggrieved by the company having been struck off, unless he was a member of the company at the material time. Again, that is a specific matter which does not arise in the present case, and which could result in a petitioner falling outside the scope of the subsection in question, without any broader decision as to the date when the grievance must come into existence. The Lord Ordinary of course notes that Timbiqui does not in any event bear directly upon the issue of whether a person "feels aggrieved" by a company having been struck off the register. And he refers to a passage in the opinion of Buckley, J. at page 327, dealing with the point that the question for the court is not whether a person says that they are aggrieved, but whether they may properly be said to be aggrieved. But again, that is a rather different question, which can be resolved without a wider decision as to the tempus inspiciendum; and I am not satisfied that the case demonstrates, as the Lord Ordinary concluded, that in considering an application such as the present, attention is to be focused on the state of affairs existing at the time when the company was struck off the register. I am not persuaded that anything in these cases really goes against, far less outweighs, the contrary indications which I have already discussed.

In relation to the submission that a petitioner could not be "aggrieved" by the company having been struck off the register, if he had himself been instrumental in achieving the striking off, reference was made to Harrop v Bayley etc. In the opinion of Lord Campbell, CJ, which was relied upon, his Lordship says: "It is not enough for a party to say he thinks himself aggrieved, but he must show that he is fairly to be considered as aggrieved." That general proposition is not disputed in the present case. But his Lordship goes on to say "How can this be so in the case of a person who complains of that which he himself personally authorised to be done?" But the facts of the case were very different. They turned inter alia upon the fact that at the crucial meeting, the question was debated whether certain expenses should be incurred, and "everybody present knew they could only be paid out of" certain police funds. The court took the view that the appellant had authorised the expenditure and that the maxim volenti non fit injuria applied. There is no real consideration in Harrop of the crucial question of whether responsibility for an act, such as striking off, entails such responsibility for unintended consequences, as to debar a person from being aggrieved by the company "having been" struck off. In any event, I am not satisfied that the ratio of the case covers that situation. While quite a number of other cases were referred to, none of them appears to me to be sufficiently close in fact and law to the present case or to contain findings at the level of principle which are clearly enough in point, for reference to them to be necessary, or for real assistance to be gained from them. I would accordingly find in favour of the appellant on these two general issues.

Dismissal is nonetheless sought by the respondents, as I have mentioned, upon two grounds of relevancy. First, this is not a case where but for the fact of the company having been struck off, the petitioner would obtain some benefit or avoid some damage: the mere threat of a claim by Kimble, with no explanation of the basis for such a claim, did not constitute a grievance, particularly as the arbitration might remove all basis for such a claim. Secondly, since the matter was before the Lord Ordinary, averments had been made by the respondents and not met by the petitioner, which at least suggest that the beneficial owner of both the company and Kimble is the same person (and perhaps the petitioner). On the former point, I think that a threat of legal action could in principle constitute the type of grievance with which section 653(1) of the Act is concerned; and that there is enough in the Petitioner's pleadings on this matter to justify leaving the issue open until after proof. And the second point, arising essentially from the respondents' pleadings, should in my opinion likewise await proof. I acknowledge that the pleadings reveal uncertainties; but I am satisfied that proof before answer is appropriate, leaving both of the first two pleas-in-law for the respondents standing at this stage.

As to the meaning of section 653(1) of the Companies Act 1985 my sentiments are precisely those which were enunciated by Megarry J. in relation to the identical wording of section 353(6) of the earlier Act of 1948 in In re Court Lodge Development Co. Ltd. [1973] 1 W.L.R. 1097 at p. 1100:

Although Mr. Justice Megarry was there dealing with an application for restoration to the Register by the company, itself, and in a situation where an unexpected asset of the company had come to light, it seems to me that his reasoning applies equally, mutatis mutandis, to the circumstances of the present case. Indeed, as I understand it, that, in essence, is also the reasoning of your Lordship in the chair and, in these circumstances, albeit without much enthusiasm, I concur with your Lordship's disposal of this part of the case. It should, however, be noted that the dicta of Mr. Justice Megarry to which I have referred were not before the Lord Ordinary.

For the rest, I confess to having a good deal of reservation as to whether the petitioner has sufficiently specified the nature and basis of his present "grievance" but I do not dissent from your Lordship's view that on these and other matters the case should be sent to proof before answer.

I agree with the opinion of your Lordship in the chair and have nothing to add.