Joddrell v Peaktone

The Court of Appeal held that section 1032(1) of the Companies Act 2006 has retrospective effect: an order made under section 1029 restoring a company to the register deems the company to have continued in existence as if it had not been dissolved and thereby retrospectively validates proceedings purportedly commenced by or against the company during the period of its dissolution. The court reached that conclusion by reference to the statutory language, the history of the prior two-track regime (distinct restoration and void-declaration routes), and binding authority, in particular Tyman's Ld v Craven. The court rejected submissions that procedural defects in service or compliance with the Civil Procedure Rules meant that proceedings remained a nullity or could not be cured, and it declined to decide subsidiary CPR/jurisdiction points because the appeal succeeded on the statutory construction point.

Background and parties:

• The respondent, Kenneth Joddrell, was a former employee who claimed noise-induced hearing loss allegedly arising from his employment with Peaktone Limited. Peaktone was dissolved on 31 March 2009.
• Proceedings were purportedly issued by Mr Joddrell on 24 August 2009 against Peaktone while the company was dissolved. The company was restored to the register by order of the Companies Court under section 1029 on 10 June 2010.

Procedural history and relief sought:

• Peaktone applied in the county court to strike out the claim as an abuse of process and as a nullity; District Judge Jones struck the claim out. Mr Joddrell appealed to His Honour Judge Stewart QC who allowed the appeal. Peaktone obtained permission to appeal to the Court of Appeal; Ward LJ granted permission. The Court of Appeal heard the appeal and dismissed it.

Issues framed:

• Primary issue: whether an order made pursuant to section 1029, read with section 1032(1) of the Companies Act 2006, retrospectively validates proceedings purportedly commenced during the period of dissolution.
• Secondary issue: whether Peaktone had waived any jurisdictional challenge by failing to follow CPR 11 or by conduct amounting to submission to jurisdiction.

Court’s reasoning:

• The court analysed the prior two-track statutory scheme under earlier Companies Acts (distinct provisions with different wording and effects) and observed that Parliament, in the 2006 Act, adopted the wording previously used in the deeming provision and applied it universally. Given Parliament’s deliberate use of established language, the earlier jurisprudence (notably Tyman's Ld v Craven) is relevant and determinative.
• On that basis the Court of Appeal agreed with Judge Stewart that section 1032(1) operates to deem the company to have continued in existence and so retrospectively validates actions taken in the company’s name while it was dissolved, including the issue and service of proceedings; procedural difficulties under the CPR could be addressed by directions under section 1032(3) or by the court’s procedural powers and the overriding objective.
• The court did not need to resolve the jurisdiction/CPR 11 point because the appeal was decided on the statutory construction point. The limitation question was left open as it was not pursued on the appeal.

Appeal dismissed. The Court of Appeal upheld Judge Stewart’s construction of section 1032(1) Companies Act 2006: a restoration order under section 1029 retrospectively deems the company to have continued in existence and therefore validates proceedings purportedly commenced during dissolution. Arguments based on inability to comply with the CPR or that the proceedings remained a nullity were rejected; subsidiary jurisdictional issues were unnecessary to decide.

Claim issued in the Torquay and Newton Abbot County Court; proceedings transferred to Manchester County Court. District Judge Jones struck the claim out (order dated 10 May 2011). The respondent appealed; His Honour Judge Stewart QC allowed the appeal (28 November 2011). Peaktone obtained permission to appeal to the Court of Appeal (Ward LJ, 8 March 2012). The Court of Appeal (Etherton LJ, Munby LJ, Lewison LJ) heard the appeal (19 July 2012) and delivered judgment dismissing the appeal (26 July 2012), neutral citation [2012] EWCA Civ 1035.