“Volunteer” replacement liquidators do not have standing to restore Companies to the Register

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The Claimants, sought to restore 31 companies (Companies) to the Register and sought to be appointed as liquidators over the Companies. They failed to establish that they had locus to bring the claim for the restoration of the Companies, causing ICC Judge Barber to propose dismissal of the claim.

The Defendants were the Registrar of Companies, and the Interveners (being Begbies Traynor, and four former officer holders), who were joined by consent. 29 of 31 restorations were opposed by the Interveners on the basis that the Claimants did not have the locus to seek restoration of the Companies as they were not persons appearing to the court to have an interest in the matter pursuant to section 1029(2) of the Companies Act 2006.

The Claimants were slow to identify the grounds on which they had standing to bring the claim. Counsel for the Claimants developed the position in his skeleton argument and submissions. Six grounds for interest were argued:

  1. as a creditor of each of the Companies, HMRC supported the claims for the restoration of the Companies and the appointment of the Claimants as liquidators, albeit that it was not in a position to fund the claim itself;
  2. the Claimants’ interest was concomitant with that of HMRC;
  3. the Claimants had an interest to apply to be replacement office holders pursuant to section 108 of the Insolvency Act 1986, but the Companies needed to be restored in order for that to happen;
  4. the Claimants were already replacement office holders, and investigating the payment of fees, in respect of three companies where the defendant office holders had variously been the former office holders;
  5. the Claimants sought to make a distribution of an asset to the various companies, which was consistent with the original purpose of the restorations; and
  6. the Claimants’ appointment would be in the wider public interest.

Barber J held that with regard to 1 and 2, HMRC support for the claim is not sufficient to give the Claimants locus to bring the restoration claim in their names. With regard to 3, the Claimants are strangers to the Companies; wishing to be replacement office holders does not render them interested persons for the purpose of the restoration claims. Likewise, the connection suggested at 4 was insufficient to establish the Claimants as interested persons in these Companies.

With regard to 5 and 6, Barber J held that it is important not to conflate the purpose of seeking restoration with the question of standing. Whilst Barber J recognised that the Claimants had identified matters which prima facie appeared to warrant investigation, in itself that was not sufficient to establish them as interested person. To find otherwise would set an unhealthy precedent.

In the matters of BCB Environmental Management limited (in Liquidation) & Ors [2020] EWHC 1561 (Ch)

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