Greenwich Millennium Exhibition Ltd. v New Millennium Experience Company Ltd & Anor

The court’s discretionary power to rectify a company’s register is not available as of right. A person affected by rectification must show a legitimate interest requiring notice and an opportunity to be heard. Creditors generally have no interest in the identity of a fully paid shareholder unless rectification directly affects their legal rights. A statement of assets and liabilities satisfies Insolvency Act 1986, section 89(2)(b), if it can reasonably and fairly be described as such. Errors or omissions do not automatically invalidate it or convert a members’ voluntary winding up into a creditors’ voluntary winding up.

Greenwich Millennium Exhibition Ltd. challenged the retrospective rectification of the register of members of The New Millennium Experience Company Ltd. It contended that it had standing as a creditor, had been prejudiced by the liquidation, and that the rectification order should be set aside.

Alternatively, GMEL argued that alleged omissions from the directors’ statement of assets and liabilities made the statutory declaration of solvency ineffective under Insolvency Act 1986, sections 89 and 90. The issues were whether GMEL had a legitimate interest in challenging rectification and whether the statement ceased to be a statutory statement because of alleged inaccuracies.

1. Rectification. The application to set aside the retrospective rectification order failed. Under section 359 of the Companies Act 1985, rectification is discretionary. A person who is merely affected, or interested in a broad sense, does not thereby acquire a legitimate interest requiring notice or a hearing.
2. GMEL had no sufficient interest in whether the registered shareholder was Lord Falconer, Mr Mandelson or the Secretary of State. The shares were fully paid, the relevant public documents identified Lord Falconer as member, and no person had relied on the register as previously constituted. Creditors would have a right to be heard where rectification directly affected their legal rights, but that circumstance was absent here.
3. The alleged loss of procedural advantages arising from liquidation did not constitute relevant prejudice caused by rectification. Insolvency procedure could, where appropriate, accommodate statements of case, disclosure and cross-examination under the Insolvency Rules 1986 and the CPR. GMEL had also abandoned its proof-of-debt appeal.
4. Declaration of solvency. The court followed the ratio in De Courcy v Clements [1971] Ch 693. The statutory requirement is met where the document can reasonably and fairly be described as a statement of the company’s assets and liabilities. Subsequent discovery of errors or omissions does not invalidate the statement.
5. Even if GMEL’s criticisms were considered, it had not discharged the burden of proving that the statement was inaccurate. No value was properly attributed to the residual Dome entitlement; the undrawn grant was conditional and unavailable absent relevant liabilities; and the alleged £15 million provision was in fact £1.5 million and was included in the total provision.
6. The applications by GMEL therefore failed. Declarations sought by the liquidators were ordered.