Price v The Registrar of Companies & Anor

Joinder in company restoration proceedings is an exceptional and limited remedy. A third party may be joined where the restoration order would or might directly affect that party’s rights or obligations. A person is not entitled to joinder merely because the restored company may sue them, because restoration changes the identity of the person entitled to enforce an existing right, or because they wish to draw alleged misleading evidence or breaches of undertakings to the court’s attention. Delay is relevant to the eventual decision whether to revoke restoration, but is not ordinarily fatal to joinder at an interlocutory stage.

Mr Price appealed against Registrar Barber’s decision joining the Welsh Ministers to proceedings concerning the restoration of Pablo Star Ltd to the register under the Companies Act 2006. The restoration had been granted and later varied subject to undertakings concerning the company’s proposed copyright litigation.

The Welsh Ministers alleged misleading witness statements and breaches of those undertakings. They sought joinder so that the court could consider those matters and issues concerning the assignment of copyright to an associated company. The appeal concerned whether they had a sufficient direct interest to be joined and whether delay was fatal to their application.

1. Appeal allowed. The order joining the Welsh Ministers was set aside and their application to be joined was dismissed.

2. The court accepted that an appellate court should generally be slow to interfere with a case-management decision. It must intervene, however, where the decision conflicts with principles established by the Court of Appeal.

3. The authorities, particularly Stanhope Pension Trust v Registrar of Companies, Re Blenheim Leisure (Restaurants) Ltd and Spring Salmon & Seafood Ltd v A-G of Scotland, established a limited exception to the ordinary practice in restoration proceedings. Joinder is appropriate where the restoration order itself would or might directly affect the proposed party’s rights or obligations.

4. A potential defendant to proceedings by the restored company does not satisfy that test. Restoration affects the identity of the person entitled to enforce the right, but does not itself affect the potential defendant’s liabilities. Nor does uncertainty about the validity of an assignment provide a sufficient basis for joinder.

5. The Welsh Ministers’ wish to assist the court by alleging misleading evidence and breaches of undertakings was not a proper basis for joinder. The statutory policing of restoration applications was entrusted to the Registrar of Companies. If the Registrar did not raise such matters, a disappointed third party’s remedy was to challenge the Registrar’s decision by judicial review.

6. Delay and prejudice may be relevant to whether a restoration order should ultimately be revoked. At the joinder stage, delay is not ordinarily fatal unless it is so extreme that the third party’s objections are bound to fail. This was not such a case, so the decision that the delay was not fatal was upheld.

The judgment concerned permission to appeal and the appeal from Registrar Barber’s order dated 2 March 2016. Birss J directed that permission and the appeal be heard together. Permission was granted, and the appeal was allowed by the High Court.