Housemaker Services Ltd v Cole & Anor

The claimant company sought a court direction under the Companies Act 2006, s 1028(3) and (4) that the period during which it was struck off the register (608 days from November 2014 to July 2016) should be discounted for limitation purposes in respect of unpaid building-services invoices. The court applied the authorities on restoration and limitation (including Regent Leisuretime, County Leasing and Pickering) and treated the test as twofold: (1) causation — whether the dissolution/striking-off caused the failure to bring proceedings within the limitation period (a test of probability rather than mere possibility); and (2) discretion — whether it would be just to give a limitation direction, noting that for a company the court will only exercise the jurisdiction in exceptional circumstances.

The judge found that the evidence showed only a window of opportunity to issue proceedings and did not establish on the balance of probabilities that the company would have issued proceedings but for the striking-off. The judge also found that, even if causation had been made out, it would not be just to give the direction because the company’s officers had failed to ensure compliance with filing obligations and the public interest in preventing stale claims prevailed. The application for a limitation direction was dismissed.

The claimant, a limited company, brought a Part 8 application seeking a direction under the Companies Act 2006, s 1028(3) and (4) to treat the period between the company’s striking-off and its administrative restoration as not running for limitation purposes in relation to unpaid invoices for building services (three invoices totalling about 23,000). The company had been struck off on 18 November 2014 and administratively restored on 18 July 2016; the Part 8 claim for the limitation direction was issued on 12 December 2016.

The factual background included earlier invoices rendered by Mr Wayne Williams in his own name in 2008, later invoices in the companys name (2010 and 2011) that remained unpaid, disputes about the quality of the work, correspondence and a County Court claim issued by the defendants in June 2014, and the companys filing of dormant accounts. A section 1000 notice from Companies House was served at the companys registered address but the director, Mr Williams, did not receive the notice as he had moved address. Restoration was effected administratively in July 2016. Particulars of Claim had been drafted by counsel by 8 July 2016 and the claimants solicitor had written to Mr Williams on 20 June 2016 about the limitation deadline; no substantive claim form had been issued at the date of the decision.

The court framed the legal issues as (i) whether there was a causal link, on the balance of probabilities, between the striking-off/dissolution and the failure to bring proceedings within the limitation period; and (ii) whether it would be just to give a limitation direction under s 1028(3), recognising that when the applicant is the company itself the court will exercise the jurisdiction only in exceptional circumstances. The court applied the two-stage approach in the authorities (Regent Leisuretime, County Leasing and Pickering), holding that a mere window of opportunity to issue proceedings is insufficient and that the applicant must show it probably would have issued proceedings but for the dissolution. The court also considered whether the proposed claim was "obviously unmeritorious" and adopted the summary-judgment type test of "no real prospect of success" for that limb.

The judge concluded that the claimant had not proved on the balance of probabilities that the dissolution caused the failure to issue proceedings in time. The facts showed only a last-minute effort and delay in issuing proceedings after restoration; the company had not taken prompt steps even after restoration and had delayed five months before bringing the Part 8 application. The judge inferred the company was short of funds and seeking leverage rather than proceeding promptly. For these reasons, and because the circumstances were not exceptional, the court dismissed the application for a limitation direction. The judge added that, if the causation limb had been satisfied, he would nevertheless have declined to exercise the discretion in favour of the claimant.

The claim for a limitation direction is dismissed. The court held that the claimant did not demonstrate on the balance of probabilities that the dissolution/striking-off caused the failure to issue proceedings within the limitation period, and that, even if causation had been established, it would not be just to give a limitation direction because exceptional circumstances were not shown and the public interest in preventing stale claims prevailed.