joddrell v peaktone ltd

8/13/2019 Joddrell v Peaktone Ltd

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[2013] 1 All ER 13

Joddrell v Peaktone Ltd

[2012] EWCA Civ 1035

COURT OF APPEAL, CIVIL DIVISION

ETHERTON, MUNBY AND LEWISON LJJ

19, 26 JULY 2012

Company Restoration to register Effect of court order

for restoration to register Company being struck off register and dissolved

Subsequent order restoring company to register Whether effect of statutory

deeming provision retrospectively to validate action commenced by or against

company during period of dissolution Companies Act 2006, s 1032(1).

In 2009 the defendant company was struck off the Register of Companies and dissolved

pursuant to s 652of the Companies Act 1985. In 2010 the registrar granted the

claimant's application for the defendant to be restored to the register pursuant to s

1029aof the Companies Act 2006. The claimant had been employed by the defendant

and had issued proceedings against the defendant claiming that he had suffered noise

induced hearing loss which he claimed was attributable to his employment. The

defendant issued an application seeking an order striking out the proc eedings on the

ground that they were an abuse of process. The defendant submittedthat the

proceedings werea nullity when they were issued, and the order restoring the

defendant to the register did not validate the proceedings retrospectively. The districtjudge held that it was not possibleto issue proceedings against a company that had

been struck off and then seek to validate those proceedings by a later successful

application to restore the company. Accordingly, the claim was struck out. That

decision was overturned on appeal. The judge held that the jurisprudence in relation to

the construction of s 353 of the Companies Act 1948 and s 653 of the 1985 Act dealing

with the effects of restoration of a company, shouldnot be departed from when

construing the terms of s 1032(1)bof the 2006 Act, which provided that the general

effect of an order by the court for restoration to the register was that the company

was deemed to have continued in existence as if it had not been dissolved or struck off

the register. The result was that the defendant was precluded from relying on the fact

that the company was dissolved when the proceedings were issued. The defendant

appealed. The claimant contended that, on the true construction of s 1032(1) of the

2006 Act, the words 'deemed to have continued in existence as if' had the effect that

the defendant was capable of being sued because the provision applied to every case

of restoration to the register, in contrast to the previous analogous statutory provision

which had applied only where the relevant application had been made pursuant to s 653

of the 1985 Act and not where it had been made pursuant to s 651 of that Act. The

defendant submitted that the judge had been wrong to conclude that a claimant could

properly issue proceedings against a dissolved company which could subsequently be

validated by an order made

a Section 1029, so far as material, is set out at [15], below

b Section 1032, so far as material, is set out at [16], below

[2013] 1 All ER 13 at 14

pursuant to s 1029 of the 2006 Act. What the claimant should have done, the

defendant submitted, was to seek to restore the defendant to the register before
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commencing proceedings against it.

Held The effect of s 1032(1) of the 2006 Act was retrospectively to validate an

action purportedly commenced by or against a company during the period of its

dissolution. A clear distinction emerged from the jurisprudence between the

consequences of the order depending upon whether the order was made pursuant to s

651 of the 1985 Act or its statutory predecessors or pursuant to s 653 of the 1985 Act

or its statutory predecessors. In the first case, the order had no retrospective effect

except to restore the company's corporate existence. It did not validate any actions or

activities that had taken place during the period of dissolution. In particular it did notrestore to life an action which, having been commenced before the company was

dissolved, had abated on the company's dissolution, nor did it bring to life an action

which, purportedly commenced while the company was dissolved, was a nullity. In the

other case, by contrast, the effect of the deeming provision was to validate

retrospectively what had happened while the company was dissolved, so that once the

restoration order was made the company was to be regarded as never having been

dissolved. Prior to the 2006 Act, there had been two different procedures in place. The

2006 Act had assimilated those procedures into a single composite procedure found in s

1032(1). The fact that in all material respects Parliament had chosen to use precisely

the same language in s 1032(1) of the 2006 Act as had previously appeared in s 653 of

the 1985 Act and its predecessors could not have been fortuitous. Parliament had

plainly been seeking to carry forward, albeit with a wider application, the principle which

had, in a narrower context, been repeatedly used in successive Companies Acts.

Accordingly, there had been no reason for thinking that the previous jurisprudence

should not have applied to s 1032(1) of the 2006 Act. That jurisprudence applied to

elucidate and explain the meaning and effect of s 1032(1) of the 2006 Act in just the

same way as it had elucidated and explained the meaning and effect of s 353 of the

1948 Act and s 653 of the 1985 Act. Accordingly, the appeal would be dismissed (see[1], [29], [40][42], [49], [53], [54], below).

Tymans Ltd v Craven[1952] 1 All ER 613applied.

Morris v Harris[1927] AC 252 considered.

Notes

For the effect of court order for restoration to the register see 15 Halsbury's Laws(5th

edn) (2009) para 1538.

For s 1032of the Companies Act 2006, see 8 Halsbury's Statutes(4th edn) (2008reissue) 1482.

Cases referred to in judgments

Dixon (CW) Ltd, Re[1947] 1 All ER 279, [1947] Ch 251.

Eastern Capital Holdings Ltd v Fitter(19 December 1991, unreported), QBD.

Global Multimedia International Ltd v Ara Media Services (Abu-Aljadail and ors, Pt 20

defendants)[2006] EWHC 3612 (Ch), [2007] 1 All ER (Comm) 1160.

Hoddinott v Persimmon Homes (Wessex) Ltd[2007] EWCA Civ 1203, [2008] 1 WLR806.

Lewis and Smart Ltd, Re[1954] 2 All ER 19, [1954] 1 WLR 755.

Mixhurst Ltd, Re[1994] 2 BCLC 19.

Morris v Harris[1927] AC 252, HL.

[2013] 1 All ER 13 at 15

Smith v White Knight Laundry Ltd[2001] EWCA Civ 660, [2001] 3 All ER 862, [2002]
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1 WLR 616.

Steanes Fashions Ltd v Legal and General Assurance Society Ltd[1995] 1 BCLC 332,

CA.

Tymans Ltd v Craven[1952] 1 All ER 613, [1952] 2 QB 100, CA.

Uphill v BRB (Residuary) Ltd[2005] EWCA Civ 60, [2005] 3 All ER 264, [2005] 1 WLR

2070.

Workvale Ltd (in dissolution), Re[1992] 1 WLR 416, CA.

Appeal

Peaktone Ltd (Peaktone), appealed from the decision of Judge Stewart QC,

sitting in the Manchester County Court, on 27 July 2011, allowing the appeal of

Kenneth Joddrell from the decision of District Judge Jones, on 18 January 2011,

granting Peaktone's applicat ion for Mr Joddrell's personal injury ac tion against it

to be struck out as an abuse of the process of the court under CPR 3.4(2)(b).

The facts are set out in the judgment of Munby LJ.

Catherine Foster (instructed by Clyde & Co Claims LLP, Manchester) for Peaktone.

James Malam (instructed by Recompense Ltd, Totnes) for Mr Joddrell.

Judgment was reserved.

26 July 2012. The following judgments were delivered.

MUNBY LJ

(giving the first judgment at the invitation of Etherton LJ).

[1]This appeal raises as the central issue a short point on the meaning and effect of s

1032(1)of the Companies Act 2006. Specifically, it raises the question whether an order

made pursuant to s 1029 of the 2006 Act has the effect of retrospect ively validating an

action purportedly commenced against a company during the period of its dissolution.

Judge Stewart QC, from whom this appeal is brought, has held that it does. In my

judgment he was right to do so. Section 1032(1) has that effect.

The facts

[2] The respondent, Kenneth Joddrell (Mr Joddrell), was employed by the appellant,

Peaktone Ltd (Peaktone), between 1986 and 2003/2004. He claims to have suffered

noise-induced hearing loss which he alleges is attributable to that employment. In his

particulars of claim (see below) he pleads that he first became aware of a hearing loss

'in 2006' when he received certain advice. He further pleads that this is his 'date of

knowledge'.

[3]On 31 March 2009 Peaktone was struck off the Register of Companies and dissolved

pursuant to s 652of the Companies Act 1985.

[4]On 24 August 2009 Mr Joddrell purportedly issued proceedings against Peaktone in

the Torquay and Newton Abbot County Court c laiming damages for personal injury. His

particulars of claim followed on 23 December 2009. The claim form and the particulars ofclaim were purportedly served on Peaktone by a letter dated 23 December 2009 posted

to what had been Peaktone's registered office immediately prior to its dissolution. The

letter and its contents came to the attention of accountants who had previously actedfor Peaktone. In a letter dated 4 January 2010 addressed to Mr Joddrell's solicitors,
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[2013] 1 All ER 13 at 16

they pointed out that Peaktone had been dissolved and that it was therefore unable to

complete the forms enclosed in the letter of 23 December 2009.

[5]On 29 April 2010 Mr Joddrell applied to the Companies Court for an order pursuant to

s 1029 of the 2006 Act that Peaktone be restored to the Register of Companies. On 10

June 2010 Mr Registrar Nicholls made the order sought.

[6]Two things about the proceedings in the Companies Court should be noted. First,that the evidence in support of the application made no reference to the fact that the

personal injury proceedings had already been issued. On the contrary, the evidence

indicated that the order under s 1029 was being sought because Mr Joddrell wished to

'commence' proceedings against Peaktone. Second, that no application for directions

under s 1032(3) was made (see below). It is suggested that, if he had known the true

facts, Mr Registrar Nicholls would have declined to make any direction advantageous to

Mr Joddrell and, indeed, would have required him to bring a fresh claim. It is said that,

given the inaccurate and misleading presentation of the circumstances to the

Companies Court, Judge Stewart ought to have concluded that the circumstances in

which the restoration was achieved amounted to an abuse of process. As mattersstand, however, all this seems to me to be neither here nor there. Quite apart from the

fact that none of it is raised in Peaktone's grounds of appeal, the order made by MrRegistrar Nicholls stands. It has never been appealed. No application has ever been

made to set it aside. We cannot go behind it. The question for us is what it means and

what its effec t is.

[7]On 18 June 2010 Peaktone issued an application in the Manchester County Court (to

which the proceedings had by then been transferred) seeking an order striking out the

claim under CPR 3.4(2)(b) and (c), that is, on the grounds that it was an abuse of the

court's process and that there had been a failure to comply with a rule (this being

identified in an accompanying skeleton argument as a failure to comply with CPR

7.5(1)). The application was heard by District Judge Jones on 18 January 2011. He

delivered a reserved judgment on 25 January 2011 and ordered that the action be

struck out pursuant to CPR 3.4(2)(b). He gave permission to appeal. His order is dated

10 May 2011, the day after he had given a supplemental judgment dealing with costs.

[8] On 26 May 2011 Mr Joddrell filed his appellant's notice. The appeal came on before

Judge Stewart on 27 July 2011. On that occasion Judge Stewart dealt with and gave

judgment on what he called the main issue on the appeal. On 28 November 2011 Judge

Stewart dealt with and gave judgment on the remaining issues. In the upshot the order

he made on the latter date was that the appeal be allowed and the order of District

Judge Jones striking out the claim be set aside.

[9] Peaktone's appellant's notice dated 4 January 2012, seeking the reinstatement of

the order made by District Judge Jones, was considered by Ward LJ on 8 March 2012.He gave permission to appeal, observing that 'this is an amusing enough point of just

enough importance to justify a second appeal'. On 17 April 2012 Mr Joddrell filed a

respondent's notice.

[10] Mr Joddrell has been represented throughout by Mr James Malam. Peaktone was

represented before us, as before Judge Stewart, by Ms Catherine Foster (another

counsel had appeared before District Judge Jones). At all three stages the arguments on

each side have remained essentially the same. Before turning to those arguments it is

convenient first to refer to the relevant statutory provisions.

[2013] 1 All ER 13 at 17

The statutory framework

[11] The 2006 Act effec ted a significant change in the statutory framework. Prior to

that, and for many years, successive Companies Acts had distinguished between two

different routes to a judicial restoration of a dissolved or struck off company.


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[12] The first, which originated in 1900 and thereafter appeared successively in s 242

of the Companies (Consolidation) Act 1908, s 295 of the Companies Act 1929, s 353 of

the Companies Act 1948 and s 653 of the 1985 Act, conferred on the court a power in

defined circumstances, though exercisable for up to 20 years after dissolution, to order

the restoration to the register of a company previously struck off by the Registrar of

Companies. The effect of such an order was stated as being that the company is

'deemed to have continued in existence as if its name had not been struck off'.

[13] The other, which originated in 1907 and thereafter appeared successively in s 223

of the 1908 Act, s 294 of the 1929 Act, s 352 of the 1948 Act and s 651 of the 1985Act, conferred on the court a general power, though exercisable only within two years

of the date of dissolution of the company, to 'make an order declaring the dissolution

to have been void'. The statute provided that 'thereupon such proceedings may be

taken as might have been taken if the company had not been dissolved'. Importantly,

the 'deeming' provision was not included.

[14] I should add that s 651 of the 1985 Act was amended by s 141of the Companies

Act 1989 so as to remove the two-year limitation where the purpose of the application

was to enable personal injury proceedings to be brought against a dissolved company.

[15] As Judge Stewart noted, the 2006 Act replaced these two separate procedures

with a new single procedure. Section 1029(1) of the 2006 Act provides that anapplication can be made to the court to restore to the register a company which has

been dissolved or struck off. Section 1029(2) provides that an application can be made

by various specified persons including 'any person with a potential legal claim against

the company' and 'any other person appearing to the court to have an interest in the

matter'. Section 1030 so far as material for present purposes provides that:

'(1) An application to the court for restoration of a company to the register may be made at any timefor the purpose of bringing proceedings against the company for damages for personal injury

(4) In any other case an application to the court for restoration of a company to the register may notbe made after the end of the period of six years from the date of the dissolution of the company,subject as follows.'

I need not set out the following subsections. Section 1030(6) provides a definition of

'personal injury' which there is also no need to set out. Nor need I set out s 1031.

[16] So far as material for present purposes, s 1032 provides as follows:

'(1) The general effect of an order by the court for restoration to the register is that the company isdeemed to have continued in existence as if it had not been dissolved or struck off the register.

(2) The company is not liable to a penalty for failure to deliver accounts for a financial year[which] ended(a) after the date of dissolution or striking off, and (b) before the restoration of thecompany to the register.

[2013] 1 All ER 13 at 18

(3) The court may give such directions and make such provision as seems just for placing thecompany and all other persons in the same position (as nearly as may be) as if the company had notbeen dissolved or struck off the register.'

This later power includes, as s 1030(3) recognises:

'power to direct that the period between the dissolution (or striking off) of the company and themaking of the order is not to count for the purposes of any [enactment as to the time within whichproceedings must be brought].'

[17] For present purposes there are three things to be noted about this new statutory

regime. First, as I have already mentioned, that there is now a single procedure.

Second, that the previous time limits of two years and 20 years have been replacedwith a single period of six years (albeit subject to the exception in relation to personal

injury proceedings which had been introduced by the 1989 Act). Third, and most

significant, that the crucial words 'deemed to have continued in existence as if', which

had previously applied only where the application was made pursuant to s 653 of the
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1985 Act, and not where the application was made pursuant to s 651, now apply by

virtue of s 1032(1) in every case.

The case law

[18] We were helpfully taken through a number of authorities on the old law. I can start

with Morris v Harris[1927] AC 252 where Lord Sumner (at 257), having drawn attention

to the differing language of ss 223 and 242 of the 1908 Act, continued:

'The words to have been void, in s. 223, appear, it is true, so far as they go, to have someretrospective effect, and tend to some extent to support the respondent's argument. On the otherhand, the remaining words, which define the order, point rather to a declaration removing a bar tosuch action as might otherwise have been taken, than to one validating past proceedings, taken sincethe dissolution through ignorance or disregard of it and consequently invalid. The remaining words,and thereupon such proceedings may be taken, as might have been taken if the company had notbeen dissolved, seem to me to point conclusively in the same direction. They describe an authoritygiven to the parties concerned to do, thereupon and accordingly thereafter, things which they mighthave done but obviously had not done theretofore, and, but for the order, could not have done afterthe dissolution. I think these words do not affect the validity or the contrary of steps taken during thatinterval. They must still depend on the facts existing and the rights arising before and independently ofthe order.'

[19]Lord Blanesburgh (at 268269) said:

'I cannot myself doubt that both the words of s. 223 empowering the Court to make an orderdeclaring the dissolution to have been void, and the following words expository of the result, andthereupon such proceedings may be taken as might have been taken if the company had not beendissolved, were in each case designedly chosen to produce the precise result which my noble andlearned friend has attributed to them. It is true that a declaratory order under the section unqualifiedin terms does,

[2013] 1 All ER 13 at 19

and it was in my judgment essential, if many difficulties which readily occur to the mind were to beavoided, that such an order should have the effect of restoring to the revived company its corporateexistence as from the very moment of the dissolution thereby declared to have been void. But theexpository words which follow carefully and, as I think, advisedly refrain from adding that such anorder is to have the effect of restoring to the company from the same moment, not its corporate

existence only, but its corporate activity also. On the contrary, these expository words import, as Ithink, that it is only after the order has been madeit is thereupon but not beforethat any activeconsequences are to ensue. I think, my Lords, that the terms in which these consequences aredescribed are exhaustive and emphatic. They are intended to show that an order under the sectionmade, it may be, as long as two years after a dissolution which up to that moment was completelyeffective, is not at once and as of course to ratify acts done during the interval, which, if done at all,must necessarily have been acts of mere usurpation, by a liquidator or other pretended agent with nooffice knowingly done on behalf of a company which had no existence. On consideration, it appears, Ithink, clear that automatically to validate such acts as being the acts of a duly constituted officer onbehalf of a duly incorporated company might involve consequences too disastrous to be evenenvisaged. They are avoided by the terms of the section. The company is restored to life as from themoment of dissolution but, continuing a convenient metaphor, it remains buried, unconscious, asleepand powerless until the order is made which declares the dissolution to have been void. Then, and onlythen, is the company restored to activity.'

[20]In Re CW Dixon Ltd [1947] 1 All ER 279, [1947] Ch 251, the issue was whether a

restoration order under s 294 of 1929 Act had the effect of automatically revesting in

the company, without the need for a vesting order, property which had vested in the

Crown on dissolution as bona vacantia. Vaisey J held that the effect of dec laring the

dissolution 'to have been void' was to avoid the dissolution ab initio, and that

accordingly there was no need for a vesting order. In reaching his decision, Vaisey Jrelied on Morris v Harris. His decision and reasoning was approved by this court in Smith

v White Knight Laundry Ltd[2001] EWCA Civ 660, [2001] 3 All ER 862, [2002] 1 WLR

616.

[21]In Tymans Ltd v Craven[1952] 1 All ER 613, [1952] 2 QB 100, an application to

the county court for a new tenancy was made on 23 July 1951 on behalf of a companywhich had been struck off the register in November 1950. The company was

subsequently restored to the register pursuant to s 353 of the 1948 Act on 15 October

1951. The application came on for hearing on 31 October 1951 and was dismissed by

the county court judge on the basis that the restoration order was not retrospective.
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The Court of Appeal by a majority (Sir Raymond Evershed MR and Hodson LJ, Jenkins LJ

dissenting) allowed the company's appeal. Having referred extensively to Morris v

Harris, the court held that an order under s 353 declaring that 'the company shall be

deemed to have continued in existence as if its name had not been struck off', was

effective to validate retrospectively all acts done in the name or on behalf of the

company during the period between its dissolution and the restoration of its name to

the register. As the Master of the Rolls put it ([1952] 1 All ER 613 at 620, [1952] 2 QB

100 at 113):

[2013] 1 All ER 13 at 20

'on 31 October 1951, it was no longer open to [the respondent] to allege the non-existence of thecompany on the preceding 23 July, for, by the terms of the sub-section, the company had then to bedeemed to have continued in existence as if its name had never in fact been struck off the register.'

Referring to Morris v Harris, the court recognised the difference between the effect of

orders made under s 352 and s 353. As the Master of the Rolls observed ([1952] 1 All ER

613 at 616, [1952] 2 QB 100 at 107) '[t]he difference in form and language is indeed

of the highest importance', Earlier, during the course of argument, the Master of the

Rolls ([1952] 2 QB 100 at 104) had asked this very pertinent question:

'Suppose a workman started an action for negligence against his employers, a company, and found

that the company had been struck off? Why could not the proceedings be validated?'

[22] In Re Lewis and Smart Ltd[1954] 2 All ER 19, [1954] 1 WLR 755, proceedings had

been begun against a company which was subsequently dissolved. An order having then

been made under s 352 of the 1948 Act declaring the dissolution void, the question

arose as to whether the effect of that order was to revive the proceedings. Wynn-Parry

J held, applying Morris v Harris, that the proceedings, having abated on the dissolution

of the company, did not revive.

[23]In Re Workvale Ltd (in dissolution)[1992] 1 WLR 416, the company was dissolved

on 22 July 1986. A writ claiming damages for personal injury against the company was

issued on 3 September 1986. The plaintiff's primary limitation period expired on 26

November 1986. On 18 January 1991 the company was restored to the register pursuantto s 651 of the 1985 Act (as amended by the 1989 Act). On appeal from the making of

that order the Court of Appeal had to consider various issues which are not relevant for

present purposes. In the course of his judgment, however, Scott LJ, with whom Stocker

LJ and Sir Stephen Brown P agreed, said (at 418):

'It is worth pointing out that when the company became dissolved the primary limitation periodapplicable to [the plaintiff's] proposed action had not yet expired, and that from the date of dissolutionuntil such time as the company should be restored to the register it was not possible for an effectiveaction against the company to be commenced. On 3 September 1986, some 24 days before theexpiration of the primary limitation period, [his] solicitors issued a writ naming the company asdefendant. This, although the solicitors obviously did not realise it, was a nullity. The named defendantdid not exist.'

Stocker LJ said much the same (at 426): 'the only action that has been brought by the

plaintiff was a nullity from the start. He purported to sue a non-existent company.

Therefore there never was an action in existence '

[24]In Re Mixhurst Ltd [1994] 2 BCLC 19, a case where an order was made under s 651

of the 1985 Act, Evans-Lombe J referred to Morris v Harrisand said (at 28):

'In their speeches the House of Lords in that case seemed to be construing s 223 of the 1908 Act asonly bringing back the company for the

[2013] 1 All ER 13 at 21

purpose of proceedings for it or against it but commenced after the relevant declaration. Thedeclaration did not validate anything happening during the dissolution.'

[25]In Steanes Fashions Ltd v Legal and General Assurance Society Ltd[1995] 1 BCLC

332, it was discovered on the first day of the trial of an action that the plaintiff

company had been dissolved. The trial judge accordingly dismissed the action. This
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court held that he should, in accordance with the unreported decision of Evans J in

Eastern Capital Holdings Ltd v Fitter(19 December 1991), have stayed the proceedings

pending an application for the restoration of the company to the register under s 653 of

the 1985 Act. One of the grounds of appeal was that the effect of the order which had

since been made under s 653 was retrospectively to cure the plaintiff's inability to

maintain the action at the date of the trial. This court agreed. Nourse LJ, with whom

Staughton and Leggatt LJJ agreed, expressed his entire agreement with Evans J's

observation in Eastern Capital Holdings v Fitterthat:

'both logic and convenience point to the action being stayed rather than dismissed. Whatever order ismade now during the period of dissolution, it will be retrospectively validated when, and if, thecompany is restored to the Register. An order of dismissal would have to be set aside because it wouldbe inconsistent with the action being resumed. An action which may be revived should not sensibly bedismissed now. But an action which is presently dead may sensibly be stayed, assuming that anyorder can be made now, until such time as circumstances change and the action is revived.'

It may be noted that one of the authorities which Evans J had considered in coming to

this conclusion was Tymans Ltd v Craven.

[26]I go finally to Smith v White Knight Laundry Ltd, where the widow of a former

employee of a company wished to bring a claim against the company in relation to her

deceased husband's mesothelioma. The company had been dissolved in 1963. Her

husband died in February 1995. In January 1998 the company was restored to theregister pursuant to s 651 of the 1985 Act (as amended). The writ was issued in April

1999. Leaving aside the effect of the restoration order, the primary limitation period had

on any view expired on some date between the dissolution and the restoration. A

number of issues arose which there is no need for me to explore. That which is relevant

for present purposes was a dispute as to what the effect of the restoration order was

in relation to the accrual of the claimant's cause of action. Jonathan Parker LJ, giving

the judgment of the court, recorded it as being common ground (para [4]) that, so long

as the company remained dissolved, the claimant could not commence proceedings

against it.

[27]The claimant's case in essence (para [32]) was that there was no defendant

available to be sued until the making of the restoration order, that the cause of actioncould therefore not have accrued at any earlier date, and that the action therefore

could not be statute-barred. The company's case (para [41]) was that, although that

no cause of action could accrue against the company unless and until an order was

made under s 651 declaring the dissolution to have been void, the effect of such a

declaration was to restore the company's corporate existence retrospect ively, as if it

had never been dissolved. Accordingly, for limitation purposesand looking at the

matter as at the date when the action was commencedthe cause of action accrued

on the date

[2013] 1 All ER 13 at 22

when the deceased had the requisite knowledge of damage (whenever that might be)notwithstanding that as at that date the company was in dissolution.

[28]The court agreed with the company. Jonathan Parker LJ commented (para [51])

that the c laimant's case 'simply begs the question as to the effec t of dec laring the

dissolution to have been void'. Having referred to Vaisey J's decision in Re CW Dixon Ltd[1947] 1 All ER 279, [1947] Ch 251, and commented that Vaisey J had cited Morris v

Harris[1927] AC 252 as providing support for his dec ision, Jonathan Parker LJ

continued:

'[53] In our judgment he was right to do so. In the passages from the speeches of Lord Sumner andLord Blanesburgh on which [counsel] relies a crucial distinction is made between on the one hand

the corporate existence of the company, which is restored as from the date of the dissolution, and onthe other hand proceedings which had taken place during the period of dissolution (referred by LordBlanesburgh as corporate activity). In Morris v Harristhe House of Lords decided that purported actsof a dissolved, and hence non-existent, company were not validated by the subsequent avoidance ofthe dissolution. But that is not the instant case. In the instant case, all that is needed for the accrual ofa cause of action against the Company is corporate existence, no question of corporate activity, inthe sense in which Lord Blanesburgh used that expression, arises.
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[54] We conclude, therefore, that by virtue of the restoration order [the claimant's] cause of actionagainst the Company accrued on the date on which it would have accrued but for the dissolution.'

[29]In my judgment, all these cases, correctly analysed, are consistent with Morris v

Harris. What emerges is the clear distinct ion between the consequences of the order

depending upon whether the order was made pursuant to s 651 of the 1985 Act or its

statutory predecessors or pursuant to s 653 of the 1985 Act or its statutory

predecessors. In the first case, the order had no retrospective effect except to restore

the company's corporate existence. It did not validate any ac tions or activities that had

taken place during the period of dissolution. In particular it did not restore to life anaction which, having been commenced before the company was dissolved, had abated

on the company's dissolution, nor did it bring to life an action which, purportedly

commenced while the company was dissolved, was a nullity. In the other case, by

contrast, the effect of the deeming provision was to validate retrospectively what had

happened while the company was dissolved, so that once the restoration order was

made the company was to be regarded as never having been dissolved. The distinctionis well illustrated by a contrasting pair of cases: Tymans Ltd v Craven and Re Lewis and

Smart Ltd.

The issues

[30]In these c ircumstances the parties, both here and below, have sought to canvasstwo broad issues. The first, and by far the more important, point relates to the meaning

and effect of s 1032(1) of the 2006 Act. Mr Joddrell contends that the effect of the

order made in the Companies Court on 10 June 2010 is to preclude any reliance by

Peaktone on the fact that it had been dissolved at the time the proceedings were

issued on 24 August 2009. Peaktone for its part contends that the proceedings were

and remain a nullity. The second point arises out of Mr Joddrell's contention that for

various reasons it is in any event not open to Peaktone to pursue the contention of

nullity.

[2013] 1 All ER 13 at 23

[31] It is convenient to take these two points in turn.

The first issue: the parties' contentions

[32]In a nutshell Peakstone's case was and is that: (i) the proceedings when issued

were a nullity: Re Workvale Ltd [1992] 1 WLR 416. (ii) The order restoring Peaktone to

the register does not validate the proceedings retrospectively: Re Lewis and Smart Ltd

[1954] 2 All ER 19, [1954] 1 WLR 755. Although s 1032(1) of the 2006 Act uses the

same form of words as had previously appeared in s 653 of the 1985 Act and its

predecessors, the jurisprudence which had gathered around the earlier provision shouldnot be applied to s 1032(1). (iii) This is supported by the fact that so long as Peaktone

remained dissolved it was impossible for Mr Joddrell to serve the proceedings in

accordance with CPR 6.3(2), 7.4 and 7.5 and impossible for Peaktone to serve anacknowledgment of service. If any of these matters was in principle capable of being

cured by directions given under s 1032(3) of the 2006 Act, no such directions were

sought by Mr Joddrell or included by Mr Registrar Nicholls in the order he made on 10

June 2010. (iv) On the other hand, the effect of the order is that time continued to run,

so the claim is now time-barred: Smith v White Knight Ltd [2001] 3 All ER 862, [2002] 1

WLR 616.

[33]Mr Joddrell's case in essence is that: (i) s 1032(1) means what it says. (ii) More

particularly, s 1032(1) should be construed in accordance with Tymans Ltd v Craven as

meaning the same and having the same effect as s 653 of the 1985 Act and its

predecessors. (iii) So far as concerns the argument based on limitation, it is not possible

to tell on the evidence or the pleadings whether Mr Joddrell's 'knowledge', pleaded asbeing 'in 2006', was acquired before or after 24 August 2006so it is not yet possible to

determine the matter one way or the other.

[34]The limitation issue was not pursued before us. It is, not least for the reason given

by Mr Joddrell, a matter for another day. I therefore say nothing more about it. Before
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us, the argument on this part of the case turned on the meaning and effect of s

1032(1).

The first issue: the judgments below

[35]District Judge Jones was referred to the more important of the authorities put

before us, just as he was taken to the contrasting wording of ss 651 and 653 of the

1985 Act and their predecessors. He said that he found neither this comparison nor the

authorities in any way helpful or indicative of the meaning of s 1032(1) of the 2006 Act.

None of the authorities, he said, was on the point. His conclusion, in favour ofPeaktone, was set out in the following passage in his judgment. Referring to s 1030(1)

he said:

'the words for the purpose of bringing proceedings make it clear that before any proceeding can beissued against a company that has been struck off the register, the company has to be restored to theregister. In my view, it is just not possible to issue proceedings against a company that has beenstruck off and then seek to resurrect or validate those proceeding by a later successful application torestore to the register. I make the same point with regard to s 1032(1) of the 2006 Act. This sectioncannot in my view validate the actions of a company during the time that it does not exist in the sensethat it has been struck off the register. The effect of restoring it to the register is that the company isdeemed to have continued in existence as if it had not been dissolved or struck off the

[2013] 1 All ER 13 at 24

Register and that means in my v iew that as from the date of restoration, the company continues toexist as to future activities the proceedings issued against [Peaktone] in August 2009 were a nullityand cannot be revived or made legitimate by the Companies Court order of 10 June. The proceedingsremain invalid '

[36]Judge Stewart expressed his 'first reaction' as being that the district judge's

interpretation was 'far removed from the full force of s 1032(1)'. He was, he said,

fortified in that impression by the decision in Tymans Ltd v Craven. Having quoted

extensively from that case, Judge Stewart continued:

'As the Master of the Rolls said in the Tymanscase, the words in issue in the present case werealready of respectable ancestry in 1952. One has to assume that it cannot be by accident that they

were incorporated into s 1032 of the 2006 Act and, unless there is a good reason not to do so, itseems to me that I should regard the Court of Appeal's majority decision in the Tymanscase asdeterminative. As between the two competing possibilities, ie s 352(1) of the 1948 Act and s 651(1) ofthe 1985 Act on the one hand, and s 353(6) of the 1948 Act and s 653(2) of the 1985 Act on the otherhand. Parliament chose the latter for the 2006 Act '

Turning to the district judge's reliance on s 1030(1), Judge Stewart commented that the

district judge had adopted an incorrect approach in first considering s 1030 before

turning to s 1032. He continued:

'The company has been restored and the consequences are those set out in s 1032(1). Section 1030deals with when an application can be made In any event, the company has been restored here. Icannot go behind that and my task is to construe section 1032(1).'

He concluded:

'Notwithstanding that, and asking myself the question I asked before whether there is good reason{not} to depart from the construction of the words in s 1032 as clarified by the Master of the Rolls inthe Tymanscase in respect of the earlier legislation, my answer is that s 1030 does not provide goodreason to depart from that construction.'

In relation to the arguments based on the asserted impossibility of complying with

various provisions of the CPR while Peaktone remained dissolved, Judge Stewart

observed that '[t]he points made by Ms Foster, although seemingly potent on their

face, do not take account of the full force of the retroactivity provision of s 1032(1)'.

The first issue: submissions

[37]Ms Foster's case, as set out in Peaktone's grounds of appeal and in her skeleton

argument, is that Judge Stewart was wrong to conclude that a claimant could properly

issue proceedings against a dissolved company which could subsequently be validated

by an order made pursuant to s 1029. He ought, she says, to have concluded that such


11/14



proceedings were and remain invalid, indeed a nullity. Her argument proceeded in three

stages. First, that the proceedings when issued were a nullity: In re Workvale Ltd (In

Dissolution)[1992] 1 WLR 416. Second, that s 1032(1) merely provides for the 'general

effect' of an order made pursuant to s 1029. This general principle, she says, cannot be

interpreted as meaning that legal proceedings can be retrospectively validated

[2013] 1 All ER 13 at 25

by a subsequent restoration to the register. A claimant, she submits, must always take

what she calls the fundamental step of restoring the company to the register before

commencing proceedings against it. Third, that the points based on the CPR to which Ihave already referred supported this conclusion.

[38]Ms Foster elaborated the second step in her argument by contrasting the 2006 Act

and its predecessors. Section 1032(3) is, she says, a stand alone provision, whereas

previously the corresponding words had appeared at the end of the relevant subsection

in s 655 of the 1985 Act (and its predecessor s 353 of the 1948 Act).1She submits that

the result in Tymans Ltd v Cravenmight have been different if s 1032(3) had been

available. It is not clear, she says, that the draftsman intended the jurisprudence to be

the same merely because he used what she describes as similar wording. Moreover, she

says, s 1032(1) refers to the 'general effect' of the order; it does not specify that all

acts purportedly undertaken are to be validated. In any event, she submits, TymansLtd v Cravenis distinguishable, for there the company was the purported plaintiffso

the ac t which was validated was a positive act undertaken by the company. In the

present case, by contrast, Peaktone as the purported defendant did nothing. Smith v

White Knight Laundry Ltd, she says, was on a different point and therefore on the

central issue does not assist Mr Joddrell. As a fall back position, she says that even if

the effect of the order was retrospectively to validate the issueof the proceedings, it

did not retrospectively validate the serviceof the proceedings.

[39]Mr Malam's response to this was brisk and pointed. Ms Foster's first proposition, he

says, simply begs the question. Her second proposition founders on Tymans Ltd v

Craven. She does not adequately explain why the general principle is to be interpreted

as she asserts, nor why Tymans Ltd v Cravendoes not provide the answer. Historicaland comparative analysis of the legislation, he says, shows that Parliament intended s

1032(1) of the 2006 Act to replicate s 653 of the 1985 Act (from which the c ritical

words were borrowed, to all intents and purposes verbatim) and the rhetorical question

posed by the Master of the Rolls in Tymans Ltd v Cravenis directly in point. The plain

meaning and effect of s 1032(1) is not constrained by s 1030(1) as District Judge Jones

thought. Her third proposition is answered (as Judge Stewart did) by reference to thepowerful effect of s 1032(1). In any event a combination of the overriding objective and

the various general and specific powers conferred on the court by the CPR amply meet

her concerns. Finally, and for good measure, Mr Malam points to what is said in Palmer's

Company Law, binder 4, para 15.521 as being wholly supportive of his case.

The first issue: discussion

[40] In my judgment Judge Stewart was right and for the reasons he gave. I would be

content to adopt his words as my own, but out of deference to the interesting

arguments we have heard I think I should set out the matter in my own words.

1 In each case the relevant wording was as follows: 'the company shall be [1985 Act is] deemedto have continued in existence as if its name had not been struck off; and the court may by the ordergive such directions and make such provisions as seem just for placing the company and all otherpersons in the same position (as nearly as may be) as if the name of the company had not beenstruck off.' The words down to the semicolon now appear in s 1032(1) of the 2006 Act, except that thewords 'dissolved or struck off the register' now appear in place of 'struck off'. The words after thesemicolon now appear in s 1032(3) of the 2006 Act, except that the words 'such provision as seems'now appear in place of 'such provisions as seem'.

[2013] 1 All ER 13 at 26

[41]Prior to the 2006 Act there were, as we have seen, two different procedures. In

the 2006 Act, Parliament did two things: it assimilated these two procedures into a


12/14



single composite procedure; and it applied to the new procedure the principle, now to

be found in s 1032(1) of the 2006 Act, which had previously applied to only one of the

old procedures. The fact that in all material respects Parliament chose to use precisely

the same language in s 1032(1) as had previously appeared in s 653 of the 1985 Act

and its predecessors cannot have been fortuitous. Parliament was plainly seeking to

carry forward, albeit with wider application, the principle which, in a narrower context, it

had repeatedly used in successive Companies Acts for over a century. It is said that Sir

Roger Casement was hanged by a comma. Whatever the truth of that, the fact that

what in s 653 of the 1985 Act appeared as two parts of a single sentence divided by a

semicolon now appears in two separate sentences (indeed in two separate subsections)divided by a full stop cannot possibly, with all respect to Ms Foster's brave submission

deployed in her skeleton argument, make the slightest difference. Nor, I might add,

though she did not suggest the contrary, can the minor differences in language

between s 1032(1) of the 2006 Act and s 353 of the 1985 Act to which I have drawn

attention.

[42]Despite Ms Foster's submission to the opposite effect, there is no reason for

thinking that the previous jurisprudence should not apply to s 1032(1). On the contrary,

given Parliament's deliberate use of a well established and much construed form of

words there is every reason for asserting that the previous jurisprudence is highly

relevant, indeed, as Judge Stewart held, determinative. As Mr Malam says, the crucial

decision for present purposes is that of this court in Tymans Ltd v Craven. In my

judgment it applies to elucidate and explain the meaning and effect of s 1032(1) in just

the same way as it elucidated and explained the meaning and effect of s 353 of the

1948 Act (and thus, subsequently, of s 653 of the 1985 Act). It is precisely in point.

True it is that in Tymans Ltd v Craventhe company was the plaintiff whereas in the

present case Peaktone is the defendant, but that in my judgment cannot make any

difference. In each situation the purported proceedings are a nullity. The proceedingsare a nullity because there is no lis; one of the parties does not exist. It cannot matter

which side of the record is subject to this vitiating feature. In any event, Sir Raymond

Evershed's interlocutory observation in Tymans Ltd v Cravenis directly in point,

demonstrating, as it seems to me, that he saw no material distinction between the two

situations.

[43]That is really the end of it, but for completeness I should add four further points.

[44]First, the words 'general effect' in s 1032(1) cannot be read, as Ms Foster would

have us read them, as cutting down the otherwise unrestricted language of the

subsection. The significance of these words is to signal that the 'general' provision in s

1032(1) is subject to what follows in s 1032(2) and 1032(3).

[45]Second, s 1032(1) is not to be read down, as District Judge Jones did, by

reference to the provisions of ss 1029 or 1030, let alone, as he thought, by reference

to the provisions of s 1030(1). Sections 1029 and 1030 are dealing only with the

application for an order, and not with its effect; that is spelled out in s 1032. As both s1029 and s 1030 show, there are many different forensic routes to the making of an

order. The precise route to the order in any particular case cannot affect the meaning

and effect of the order once it is made; that is spelled out by s 1032(1), which appliesto every order. Otherwise, as Mr Malam points out, one would have the striking

illogicality that whether proceedings which on commencement were a nullity are

retrospectively validated by s 1032(1) will

[2013] 1 All ER 13 at 27

depend upon whether they are proceedings for personal injury (and thus within s

1030(1)) or for some other cause of action (and thus within s 1030(4)). The illogicality

is even greater when one recalls that the prime purpose of s 1030(1) and 1030(4) is

simply to define the different periods within which an application for an order under s

1029 can be made in the two classes of case.2

[46]Third, the sweeping effect of s 1032(1) is illustrated by s 1032(3), which enables

the Companies Court to make directions 'for placing the company and all other persons


13/14



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 observed

in Tymans Ltd v Craven[1952] 1 All ER 613 at 619, [1952] 2 QB 100 at 111 of the

corresponding provision in s 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 ofthose general words, is prima facie their consequence.'

[47]Fourth, the conclusion at which I have is arrived is supported by the views

expressed both by the editors of Palmer's Company Law, para 15.521, and by the

editors of Gore-Browne on Companies, ch 60, para [15A].

[48]There remain the two subsidiary points taken by Ms Foster. She submits that even

if the effect of the order was retrospectively to validate the issueof the proceedings, it

did not retrospectively validate the serviceof the proceedings. She has been able to

provide no convincing argument as to why that should be so. In my judgment there is

nothing in the point. Quite apart from the fact that this difficulty, if it is a difficulty,

could in principle be cured either by a direction of the Companies Court under s 1032(3)

of the 2006 Act or in accordance with the CPR, the effect of s 1032(1) is, on the view I

have adopted, that service, which took place at what prior to dissolution had been

Peaktone's registered office, is retrospectively validated by s 1032(1). More generally

she relies upon the asserted impossibility of complying with various provisions of the

CPR. Again, there is nothing in this point. As Judge Stewart said, the argument does not

take account of the full force of the retroact ivity provision of s 1032(1). In any event,

picking up on points made by Mr Malam, a combination of the overriding objective and

the various general and specific powers conferred on the court by the CPR amply meetMs Foster's contentions.

The first issue: conclusion

[49]In my judgment, the effect of s 1032(1) is retrospectively to validate an actionpurportedly commenced by or against a company during the period of its dissolution.

2 Although nothing ultimately turns on the point it might be thought that there is in any event afundamental internal inconsistency in Peaktone's case. Its argument, accepted by District Judge Jonesand repeated before us by Ms Foster, is that the phrase 'for the purpose of bringing proceedings' in s1030(1) is properly to be understood as confined to proceedings not yet commenced but proposed tobe brought in future after an order has been made. Indeed, except on this hypothesis the argumentthat s 1032(1) is to be read down by reference to s 1030(1) takes Peaktone nowhere. However, if thisis correctand I make clear that I express no view at all on a point which there is no need for us todecidethe consequence must be that Mr Joddrell's application did not in fact fall within s 1030(1) atall, on which footing it was necessarily 'any other case' within the meaning of s 1030(4). But on thisbasis the argument collapses completely. So the very hypothesis which is crucial to the argument infact destroys it.

[2013] 1 All ER 13 at 28

The second issue

[50]Mr Joddrell makes essentially two separate submissions: (i) Peaktone's challenge,

properly understood, is to the jurisdiction of the court: Uphill v BRB (Residuary) Ltd

[2005] EWCA Civ 60, [2005] 3 All ER 264, [2005] 1 WLR 2070; Hoddinott v PersimmonHomes (Wessex) Ltd[2007] EWCA Civ 1203, [2008] 1 WLR 806. Application ought

accordingly to have been made pursuant to CPR Pt 11, but Peaktone did not do so, nor

indeed could it have, given that it has never filed the acknowledgment of service

required by CPR, r 11(2). (ii) Peaktone has in fact submitted to the jurisdiction and thus

waived any right it might have had to challenge the jurisdiction. In the first place it did

so by applying to strike out the proceedings: see Global Multimedia International Ltd v

Ara Media Services (Abu-Aljadail and ors, Pt 20 defendants)[2006] EWHC 3612 (Ch) at

[31], [2007] 1 All ER (Comm) 1160 at [31], where Sir Andrew Morritt C said: 'A

defendant who intends to challenge the jurisdiction of the court does not threaten to

strike out the claim if the claimant refuses to discontinue it.' Moreover, it did so by
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raising the matters relied upon in support of its application under CPR 3.4(2)(c).

Furthermore, it has variously alleged that it has a limitation defence and that there has

been an abuse of process causing it unmitigatable prejudice, both of which presuppose

that the court has jurisdiction to deal with the substance of the claim.

[51]Peaktone disputes all this. District Judge Jones agreed with Peaktone, but Judge

Stewart took a different view. Although he came to no final conclusion in relation to the

second limb of Mr Joddrell's argument, he held that Peaktone's challenge to the validity

of the proceedings was 'fair and square' within CPR Pt 11, just as in Hoddinott's case,

that Peaktone had failed to follow the CPR Pt 11 route and that accordingly it is deemedto accept that the court has jurisdiction. It followed, he said, that he would allow Mr

Joddrell's appeal on this ground if he was wrong in relation to s 1032(1).

[52]In the event, Judge Stewart was entirely correct to allow Mr Joddrell's appeal on

the first ground. There is accordingly no need for us to consider whether he was also

correct on the second ground. Since there is, in my judgment, no compelling reason why

we should do so, I propose to say nothing more about it.

LEWISON LJ.

[53]I agree.

ETHERTON LJ.

[54]I also agree. There is nothing I wish to add.

Appeal dismissed.

Peter Fuller Barrister.
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joddrell v peaktone ltd

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