Peter Raymond Henrikson & Ors v Charles Riley Constant & Ors

Administrative restoration requires the statutory conditions in Companies Act 2006 section 1025 to be satisfied. A company is not “in operation” merely because it holds, or claims to hold, an asset. There must be some activity or active steps at the relevant date.

Where registered material is factually inaccurate, section 1096 still requires the court to assess actual or potential damage to the company and balance the company’s interests against those of other persons. The court need not decide the merits of underlying litigation when assessing whether the company has a non-shadowy interest in pursuing it.

Under section 125, the court may create and rectify a register of members, including retrospectively, but should decide only issues properly raised and evidenced.

The applications concerned Truth Data Insights (Holdings) Limited, an English holding company incorporated to hold interests connected with an American business. The company was struck off the register in 2018 and later administratively restored by Charles Constant, who filed statements that it had been carrying on business or was in operation.

Peter Henrikson sought rectification of the register by removing the restoration and subsequent filings and marking the company dissolved. Mr Constant sought restoration and rectification of the register of members to record the Snake River Trust and the Henrikson Family Trust as joint holders of the company’s share. The central issues were whether the restoration conditions had been satisfied, whether the restoration material should be removed under section 1096, and how the company’s membership and directors’ filings should be recorded.

1. Restoration. The Henrikson Parties proved, on the balance of probabilities, that the company was neither carrying on business nor in operation when struck off in November 2018. Its purpose was to act as a holding company, its accounts described it as dormant, and there were no active steps concerning its alleged rights under the Subscription Agreement. The evidence of a resolution to dissolve and an unsigned application to the Registrar was considered with the wider evidence; the decisive feature was the absence of activity at the relevant date. The approach in Re Priceland Ltd was applied.
2. Proper delivery. The expression “properly delivered” in section 1025(5) concerns compliance on the face of documents with the Registrar’s requirements as to contents, form, authentication, manner of delivery and language. It does not require the court, under section 1096, to determine whether accounts were substantively approved by the board. The challenge on this ground failed.
3. Balancing exercise. Although the restoration statement was factually inaccurate, section 1096(3) required proof of actual or potential damage and a balance of interests. The court could not assess the merits of the Texas Litigation or the likelihood of adverse costs orders. The company’s interest in preserving a non-shadowy opportunity to pursue potentially valuable rights outweighed the relevant countervailing interests. The restoration therefore remained on the register. Re Infund LLP was explained and applied as to the statutory balancing exercise, but its reference to “other persons” did not exclude Mr Constant in the circumstances.
4. Share ownership and register. The contract was between the Snake River Trust and the Crown for payment in return for a stock transfer form naming both trusts. It was not void merely because the offer had not been made directly to both trusts. The court directed, under section 125, that the company establish a register of members and register the Snake River Trust and Henrikson Family Trust jointly, in that order, with retrospective effect from 27 May 2021. If the Henrikson Family Trust declined membership, the Snake River Trust was to be registered as sole legal owner.
5. Directors’ filings and disposition. The purported appointments and termination filed in September 2020 did not comply with the company’s articles and were invalid and of no effect. The Registrar was directed to remove them under section 1096. The Henrikson Dissolution Application was dismissed, the company remained restored, and the Constant Restoration Application consequently fell away. Further submissions were invited concerning other filings and the injunction application.