Price v The Registrar of Companies & Anor

The court allowed the appeal against Registrar Barber's order permitting the Welsh Ministers to be joined to restoration proceedings brought by Pablo Star Ltd. Restoration is governed by section 1029 of the Companies Act 2006 and principles established in the authorities under the 1985 Act require that joinder is exceptional and limited to third parties whose rights are directly affected by restoration. The judge held that a potential defendant to revived company proceedings, or uncertainty about the identity of the claimant following an assignment, does not amount to a direct effect on rights sufficient to justify joinder. The judge also held that alleged misleading witness statements or breaches of undertakings by the applicant, absent intervention by the Registrar, do not permit third-party joinder as of right. The judge rejected Registrar Barber's reasoning but upheld her exercise of discretion on the issue of delay as not fatal to joinder.

Background and parties: Pablo Star Ltd (dissolved) sought restoration so it could pursue copyright claims concerning a photograph. Haydn Price (director and sole shareholder) applied for restoration; the Registrar of Companies was the named respondent. The Welsh Ministers (WM) became involved because VisitWales.com was a named defendant in related litigation and because an associated company, Pablo Star Media Ltd (Media), had been said to own or assert rights in the photograph.

Procedural posture: Registrar Derrett restored Pablo Star subject to undertakings by Mr Price (June 2014). Mr Price later obtained variation of those undertakings (June 2015). WM applied to be joined and sought declarations or, alternatively, revocation of the restoration and declarations as to ownership of the copyright; the joinder application was granted by Registrar Barber on 2 March 2016. Mr Price sought permission to appeal and appeal was heard before HHJ Behrens on 14 October 2016 (permission granted; reserved judgment).

Nature of the application and issues: WM sought joinder and relief on grounds that Mr Price's earlier witness statements misled the court and undertakings had been breached; they also relied on the assignment to Media and consequent potential changes in the identity of the party entitled to sue. The principal issues before the court were (i) whether delay by WM in bringing the application was fatal, and (ii) whether Registrar Barber misapplied the law on joinder in restoration proceedings by allowing joinder where WM's rights were not directly affected.

Court's reasoning and conclusions: The court reviewed authorities including Stanhope Pension Trust v Registrar of Companies, Re Blenheim Leisure (Restaurants) Ltd and Spring Salmon & Seafood Ltd v A-G of Scotland and concluded that joinder in restoration proceedings is an exception reserved for cases where rights would be directly affected by restoration (for example, legatees or assignees whose entitlements would be divested). A mere potential defendant or a dispute over which corporate entity holds the right to sue does not constitute a direct effect on rights sufficient for joinder. Assisting the court by exposing alleged misleading evidence is not a proper basis for third-party joinder in restoration proceedings; policing such matters is properly for the Registrar (or by judicial review). On the issue of delay, the judge considered the period between August 2015 and January 2016 and concluded that, although some delay existed, it was not so extreme as to make joinder impossible at that stage and therefore Registrar Barber’s conclusion on delay was not overturned. Overall the judge held that Registrar Barber erred in law in permitting joinder and allowed the appeal, refusing the joinder application and dismissing WM's application.

Appeal allowed. The court held that Registrar Barber erred in permitting the Welsh Ministers to be joined: joinder in restoration proceedings is an exceptional remedy confined to cases where restoration would directly affect a third party’s rights, and neither potential liability as a defendant nor uncertainty about which revived entity holds the right to sue sufficed to justify joinder. The judge accepted Registrar Barber’s exercise of discretion on delay was not wrong, but found the joinder decision inconsistent with the authorities and therefore set it aside; the joinder application was refused and the substantive application dismissed.

Permission to appeal directed by Birss J on 11 May 2016; appeal heard with permission before His Honour Judge Behrens on 14 October 2016, resulting in this judgment allowing the appeal and refusing joinder. Prior decision: Registrar Barber order dated 2 March 2016 permitting joinder (subject of appeal).