Wednesday 25 January 2017

UK: England and Wales: restoration of companies to the register and the scope of court directions

Judgment was given yesterday by the Court of Appeal in Pickering v Davy [2017] EWCA Civ 30. At issue was the scope of the directions the court is able to make under section 1032(3) of the Companies Act 2006 where a company has been restored to the register of companies. Section 1032(3) provides that 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 of the register".

The court's decision is important for two reasons. First, it provides guidance on the granting of limitation directions (e.g., directions of the court concerning the running of limitation periods). The court held that the making of a limitation direction under section 1032(3) required the applicant to show a clear causal link between the dissolution and the failure to bring proceedings within the applicable limitation period. The court therefore rejected as being too low the test that the trial judge had adopted: that there should be a "window of opportunity" in which proceedings might have been brought. Second, the court has confirmed (in what appears to be the first authority where such a direction has been sought) that it has the discretion under section 1032(3) - albeit one that should be exercised with extreme caution - to grant a direction that a petition that had not yet been presented for winding-up the company would be regarded as having been presented on the day the company was struck off.

Update (26 January 2017) - the ICLR has published a summary of the decision: see here.

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