Peaktone Ltd v Joddrell

An order restoring a company to the register under the Companies Act 2006 retrospectively validates proceedings purportedly commenced by or against the company while it was dissolved. Section 1032(1) requires the company to be treated as having continued in existence throughout. The rule applies equally where the dissolved company was the claimant or the defendant and extends to service at its former registered office.

The words “general effect” do not restrict that retroactivity. They indicate that the deeming provision is subject to the statutory exceptions and the court’s power to give supplementary directions. The route by which restoration was obtained affects eligibility for an order, not the legal effect of an order once made.

The respondent brought a personal injury claim against his former employer while the company was dissolved. The company was subsequently restored to the register by an order under section 1029 of the Companies Act 2006. The District Judge struck out the claim as an abuse of process, holding that proceedings against a non-existent company were a nullity which restoration could not revive.

His Honour Judge Stewart QC allowed the respondent’s appeal and set aside the strike-out order. The company appealed to the Court of Appeal. The central question was whether section 1032(1) retrospectively validated proceedings, including their service, which had been undertaken during the period of dissolution.

1. Appeal dismissed. Section 1032(1) of the Companies Act 2006 retrospectively validated the action purportedly commenced against the company while it was dissolved. It also validated service at the address which had been its registered office before dissolution. The fact that the company was the defendant rather than the claimant made no difference: in either situation the original defect was the absence of an existing party and therefore of a lis.

2. Before the 2006 Act, the legislation provided two materially different restoration regimes. An order under section 651 of the Companies Act 1985 and its predecessors restored corporate existence retrospectively but did not validate corporate activity during dissolution. By contrast, the deeming words in section 653 and its predecessors retrospectively validated acts done during that period. That distinction explained the apparently differing authorities.

3. Parliament replaced those procedures with a single regime and deliberately used in section 1032(1) the established deeming language formerly found in section 653. The earlier construction of that language, particularly in Tyman’s Ld v Craven, therefore determined its meaning. The restoration order required the company to be regarded as though it had never been dissolved.

4. The expression “general effect” did not cut down section 1032(1). It indicated that the general deeming rule was subject to subsections (2) and (3). The power in section 1032(3) to place affected persons as nearly as possible in the position they would have occupied without dissolution complemented and illuminated the retroactive rule.

5. Sections 1029 and 1030 regulate applications for restoration, including who may apply and the applicable time limits. They do not determine the effect of an order once made. That effect is governed by section 1032 and cannot vary according to whether the proposed claim concerns personal injury or another cause of action.

6. The existing restoration order had neither been appealed nor set aside. The Court of Appeal could not go behind it because of alleged inaccuracies in the restoration application. The alternative arguments concerning CPR 11, submission to the jurisdiction and waiver did not require determination.

Munby LJ delivered the judgment. Lewison and Etherton LJJ agreed.

1. Court of Appeal (Civil Division): Dismissed the company’s appeal and affirmed that the restoration order retrospectively validated the issue and service of the proceedings: [2012] EWCA Civ 1035.
2. Manchester County Court, His Honour Judge Stewart QC: Allowed the claimant’s appeal and set aside the District Judge’s strike-out order.
3. Manchester County Court, District Judge Jones: Struck out the claim under CPR 3.4(2)(b), holding that proceedings issued while the company was dissolved remained a nullity.
4. Companies Court: Mr Registrar Nicholls restored the company to the register under section 1029 of the Companies Act 2006.