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Re: Blenheim Leisure (Restaurants) Ltd (1999)

Summary

Where a company had been struck off the register of companies, once an applicant could establish that a company had some real prospect of being valuable then, save in a very unusual case, the right course would be to restore the company to the register and let any other arguments be dealt with in another court.

Facts

The applicants (X), shareholders and directors of a company (B), applied to restore B to the register of companies pursuant to the Companies Act 1985 s.653(2B) . The respondent creditors of B opposed restoration on the ground that a sum of £180,000, owed to them by B as a result of previous agreements, should be paid as a prior condition of B's restoration. X argued that the wording of s.653 was not strong enough to allow for the imposition of any sort of condition, the decision whether or not to restore being an issue by itself. Further, that granting the court the power to impose conditions would undermine the whole purpose of the second limb of s.653.

Held

The court had power under s.653 to order restoration of the company on certain limited conditions. However, the exercise of that power was limited since an application to restore a company involved an administrative element and should not be seen as having the full status of ordinary court proceedings. Balancing the nature of the prejudice and taking into account the weak but real prospect of B having a significant value if restored, it was right to accede the application. Once an applicant could establish that a company had some real prospect of being valuable then, save in a very unusual case, the right course would be to restore the company and let any other arguments be dealt with in another court.

Application granted.

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Judgment
07 Oct 1999

Chancery Division
Neuberger J

References
LTL 3/10/2005 : [2000] BCC 821 : (1999) 96(40) LSG 42 : (1999) 143 SJLB 248 : Times, October 26, 1999

Practice areas
Company, Partnerships & LLPs