Holmes v S & B Concrete Ltd

Restoration of a dissolved company to the register for a personal injury claim remains subject to the court’s statutory discretion. The court must consider whether the claim would fail under a limitation enactment and must have regard to its power to protect the company and affected insurers.

The rule that limitation stops running on liquidation does not automatically permit an otherwise statute-barred personal injury claim to proceed against restored company proceedings. Where the claim is effectively directed outside the liquidation at compulsory employers’ liability insurance, the court may distinguish that rule. It may impose conditions limiting any claim against the company to the insurer’s liability.

The claimant appealed against the dismissal of his noise-induced hearing loss claim by HHJ Owen QC in the County Court of Lincoln. The defendant company had been dissolved following a voluntary winding-up in 1995 and was restored to the register in 2018, deemed to have continued in existence.

The claimant argued that, because the company was deemed to have been in liquidation since 1995, limitation had stopped running under Financial Services Compensation Scheme Ltd v Larnell (Insurances) Ltd. The preliminary issue judge rejected that argument, having found that the claim was out of time and that it would be inequitable to extend time under section 33 of the Limitation Act 1980. The central issue was whether restoration retrospectively prevented the claim from becoming statute-barred.

1. Appeal dismissed. The claimant’s limitation arguments had already been rejected and there was no appeal against those findings.
2. Under sections 1030 and 1032 of the Companies Act 2006, restoration for the purpose of bringing personal injury proceedings is discretionary. No restoration order should be made where the proceedings would fail under a limitation enactment, and the court must consider directions protecting the company and persons affected by restoration.
3. The rule applied in Financial Services Compensation Scheme Ltd v Larnell (Insurances) Ltd, that a claim not time-barred at the commencement of liquidation does not become time-barred thereafter, did not govern this case. The claim could properly be treated as outside the liquidation because employers’ liability insurance would ordinarily cover the claim. In the unusual case of insufficient insurance, restoration could be conditioned so that any claim against the company was limited to the insurer’s liability.
4. The approach in Smith v White Knight Laundry Ltd was applicable whether or not the company had been in liquidation when dissolved. Restoration should not operate as an undeserved limitation windfall where the claimant’s claim was otherwise unmeritorious and an extension under section 33 would be inequitable.
5. The court considered that insurers should ordinarily receive notice of an application for restoration where they are the intended target. Although the court could have set aside the restoration order by a procedural route, the simpler course was to dismiss the appeal.

• County Court of Lincoln: HHJ Owen QC dismissed the claim on 27 September 2019 after deciding that it was statute-barred and that section 33 of the Limitation Act 1980 should not be applied.
• High Court (Queen’s Bench Division): The appeal was dismissed.