Companies Act 2006 s.1034 – Effect of restoration to the register where property has vested as bona vacantia

(1)The person in whom any property or right is vested by section 1012 (property of dissolved company to be bona vacantia) may dispose of, or of an interest in, that property or right despite the fact that the company may be restored to the register under this Chapter.

(2)If the company is restored to the register—

(a)the restoration does not affect the disposition (but without prejudice to its effect in relation to any other property or right previously vested in or held on trust for the company), and

(b)the Crown or, as the case may be, the Duke of Cornwall shall pay to the company an amount equal to—

(i)the amount of any consideration received for the property or right or, as the case may be, the interest in it, or

(ii)the value of any such consideration at the time of the disposition,

or, if no consideration was received an amount equal to the value of the property, right or interest disposed of, as at the date of the disposition.

(3)There may be deducted from the amount payable under subsection (2)(b) the reasonable costs of the Crown representative in connection with the disposition (to the extent that they have not been paid as a condition of administrative restoration or pursuant to a court order for restoration).

(4)Where a liability accrues under subsection (2) in respect of any property or right which before the restoration of the company to the register had accrued as bona vacantia to the Duchy of Lancaster, the Attorney General of that Duchy shall represent Her Majesty in any proceedings arising in connection with that liability.

(5)Where a liability accrues under subsection (2) in respect of any property or right which before the restoration of the company to the register had accrued as bona vacantia to the Duchy of Cornwall, such persons as the Duke of Cornwall (or other possessor for the time being of the Duchy) may appoint shall represent the Duke (or other possessor) in any proceedings arising out of that liability.

(6) In this section the “Crown representative” means—

(a)in relation to property vested in the Duchy of Lancaster, the Solicitor to that Duchy;

(b)in relation to property vested in the Duke of Cornwall, the Solicitor to the Duchy of Cornwall;

(c)in relation to property in Scotland, the Queen's and Lord Treasurer's Remembrancer;

(d)in relation to other property, the Treasury Solicitor.

Read section 1034 in the full Act → Definitions (3) Cases (3)

Definitions used in section 1034

company

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act

(4) In this section and that Schedule “company” includes any body corporate.

Defined in s.1159(4) · see it in the full Act

the register

(2) The records relating to companies are referred to collectively in the Companies Acts as “the register”.

Defined in s.1080(2) · see it in the full Act

the court

(1) Except as otherwise provided, in the Companies Acts “the court” means—

(a)in England and Wales, the High Court or the county court;

(b)in Scotland, the Court of Session or the sheriff court;

(c)in Northern Ireland, the High Court.

Defined in s.1156(1) · see it in the full Act

(2) The provisions of the Companies Acts conferring jurisdiction on “the court” as defined above have effect subject to any enactment or rule of law relating to the allocation of jurisdiction or distribution of business between courts in any part of the United Kingdom.

Defined in s.1156(2) · see it in the full Act

Cases considering section 1034 (3)

Mistral Asset Finance Ltd v Registrar of Companies & Anor

[2020] EWHC 3027 (Ch) · 12 November 2020Interprets

Section 1034(1) permits certain dispositions of property vested as bona vacantia despite possible restoration. The court held that a Crown disclaimer was not a disposition within this provision and therefore was not preserved against restoration. (see paras [10], [15], [21]-[27]) Section 1034(2) preserves dispositions made while property is vested as bona vacantia. The court treated this as confirmation that dispositions otherwise avoided by restoration require express statutory protection, which a disclaimer does not receive. (see paras [10], [15], [21]-[27])

Fivestar Properties Ltd, Re

[2015] EWHC 2782 (Ch) · 8 October 2015Interprets

The court treated section 1034 as preserving dispositions made by the Crown before restoration. Since disclaimer was not a disposition, the provision did not prevent restoration of the freehold. (see paras [15], [17]-[23]) The court noted that restoration does not affect a disposition made before restoration. It held that the Crown’s disclaimer was not such a disposition. (see paras [15], [17]-[23]) The court referred to the compensation mechanism where property has been disposed of before restoration. No compensation issue arose because the freehold had not been disposed of. (see para [15])

Fit Kitchen Ltd & Anor v Scratch Meals Ltd

[2020] EWHC 2069 (IPEC) · 29 July 2020Limits

Section 1034(1) was relied on to argue that property vested as bona vacantia could be disposed of despite possible restoration. The court left the consequences for the trade mark application and registration undecided. (see paras [24]-[27])

What each judgment says about section 1034 is in the case-law panel in the full Act.

Explanatory note

1285.This section replaces section 655 of the 1985 Act with little change of substance. However, it makes new provision ( subsection ( 3) ) that, where a company’s property has passed to the Crown and been disposed of, the Crown, in reimbursing the newly restored company, may deduct the reasonable costs of sale which were incurred.

All the explanatory notes for the Act

Amendments and notes

4 notes from legislation.gov.uk

Modifications

C1426S. 1034 applied (with modifications) by Building Societies Act 1986 (c. 53), Sch. 15 para. 57(1)(3) (as substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 2(1), Sch. 1 para. 87(11)(b) (with art. 10))
C1427S. 1034 applied by Friendly Societies Act 1992 (c. 40), Sch. 10 para. 68(1) (as substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 2(1), Sch. 1 para. 133(7)(b)(i) (with art. 10))
C1428S. 1034 applied (with modifications) (1.10.2009) by The Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 (S.I. 2009/1804), regs. 2, 58 (with Sch. 1 paras. 26, 34, 35)
C1429S. 1034 applied (with modifications) (8.12.2017) by The Risk Transformation Regulations 2017 (S.I. 2017/1212), regs. 1(2), 185(5) (with reg. 189)