9911796707
TMI Blog1969 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... to be made by the company and also by a Mr. Lindsay-Bowman, a contributory, who is one of the only two shareholders in the company. In addition to seeking the restoration of the company to the register, the petition asks for a winding-up order. Mr. Weaver appears for the petitioners, and Mr. Hamilton appears for a creditor claiming a debt of rather over 100 incurred before the dissolution and another debt of rather over 300 incurred after the dissolution. Mr. Hamilton's attitude is conditional. He supports the petition if the order is to include what I may call the Rugby Auto Electric clause, but opposes it if there is to be no such clause. That clause is to the effect that the order "is to be without prejudice to any remedy which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if their right to sue a director who is well able to pay 20s. in the pound is replaced by a claim against a company which, on a winding up will perhaps pay only Is. in the pound. True, it was to the supposedly existing company that the creditors gave credit; but the law having given them the right against the director, the subsection is being used to snatch away what the law has given. It ought not to be open to a director to revive the company in order to escape from his personal liability. On the other hand, it may be questioned whether creditors who give credit to the supposed company ought, by the operation of the clause, to be in a position to claim two rights in respect of the same debts. Is it just that they should have, first, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the subsection that is primarily in point. First, the effect of the order, when delivered for registration is that the company " shall be deemed to have continued in existence as if its name had not been struck off". This, as I read it, is a necessary and automatic result of the order; and such a deeming carries with it all the consequences that flow from it. If I may borrow the classic sentence that Lord Asquith of Bishop-stone uttered, in an entirely different context, in East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109, 132 . " If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven five other years by way of replacement. This will put him "in the same position as nearly as may be as if the name of the company had not been struck off". I may add that In re Huntington Poultry Ltd. [1959] 1 WLR 204, shows such a provision will be inserted in the order only if sufficient grounds for so doing appear, and not as a matter of routine ; and in In re Vickers and Bott Ltd. [1968] 2 All. ER 264, where the company was already in liquidation, Pennycuick J. also refused to insert such a provision. In the present case, the position seems to me to be very different. What is sought is a provision that will preserve to the creditor the rights that he acquired while the company was defunct. The statutory fiction that results f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot see any escape from the conclusion that the power of the court is limited to giving directions and making provisions for the sole purpose of effectuating the statutory fiction, namely, that the name of the company has not been struck off. Such a power cannot, in may judgment, be used for the purpose of negativing the statutory fiction. The words governing the exercise of the power are " for placing the company and all other persons in the same position as nearly as may be as if..."; and it is for this purpose, and this alone, that the court may give such directions and make such provisions " as seem just". lf the subsection had ended with the words "as seem just," thus omitting the purposive words " for placing... " and all that fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a typewriter and filing cabinet each said to be worth 20. These assets are all in premises of which the landlord has taken possession by reason of arrears of rent. The arrears are said to be some 211, so that if the estimate of value is correct, there is a surplus of a little over 40. Second, there is a Renault van estimated to be worth 85, and this is in the possession of a garage which claims just under 80 for repairs to it. Both these debts were incurred after the dissolution. When one has regard to costs and to preferential claims, it seems plain to me that there is no real case for restoring the company to the register. The power to apply under the subsection arises "if a company or any member or creditor thereof feels aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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