Litigators are sometimes called upon the restore limited companies to the register and make a limitation direction.  The decision of the Court of Appeal today in Pickering -v- Davy [2016] EWCA Civ 30 gives rise to additional problems. It emphasises the need for a party to act speedily if it is known an application is being made to struck off the register.

“The position is therefore that the making of a limitation direction under section 1032(3) requires the applicant to show a clear causal link between the dissolution and the failure to bring proceedings within the applicable limitation period.”


  • The court has power to restore a company to the register and make a direction that the limitation period does not apply during the period of dissolution.
  • That power is exercised for the purpose of placing the parties in the same position they would have been in had the company not been dissolved.
  • The applicant had failed to establish that he would have acted any differently and brought an action within the limitation period even if the company had not been dissolved.
  • The effect of making an order was to place the applicant at an advantage rather than restore him to the same position he would have been in had the company not been dissolved.
  • The order restoring the company and making a limitation direction was set aside by the Court of Appeal.



  • The limited company carried on business as a financial advisor.
  • A client Mr Davy took advice from the company and transferred his pension fund from his employers into a personal pension plan. This caused him to suffer a loss of some £617,507.
  • After Mr Davy made a complaint the director of the company applied for the company to be struck off the register.
  • No notice of this was given to Mr Davy.
  • Mr Davy discovered that the company had been dissolved and sought an order restoring it to the register (with the intention of placing it in liquidation) and a limitation directly.
  • The restoration was allowed by the High Court judge.
  • The directors of the company appealed against that decision.


    1. Section 1032(1) and (3) provide:

“(1) The general effect of an order by the court for restoration to the register is that the company is deemed to have continued in existence as if it had not been dissolved or struck off the register.

(3) The court may give directions and make such provision as seems just for placing the company and all other persons in the same position (as nearly as may be) as if the company had not been dissolved or struck off the register.”



The judge at first instance held that the purpose of the section was to place persons in the same position as if the company had never been struck off the register.  Mr Davy had lost a window of opportunity to bring his claim and the court ordered restoration and made a limitation direction.


  1. The principal issue on this appeal is essentially whether, as a matter of law, that is a sufficient basis on which to have made the directions.
  2. The main grounds of appeal are directed to the express statutory purpose of a direction under section 1032(3) and what the applicant must show in that respect before the court can consider the justice of giving a particular direction. The appellants submit that the judge was wrong to hold that the relevant question was whether the applicant had been deprived of the opportunity of bringing proceedings or presenting a winding-up petition, but rather whether the applicant had changed his position by reasonably abstaining from taking such steps as a result of the company’s dissolution. The direction should not put the applicant in a substantially different position than he would have been in if the company had not been struck off the register.
  3. The judge was right, in my view, to emphasise that the discretion conferred by section 1032(3) is not unlimited but must be exercised only for its stated purpose (“for placing the company and all other persons in the same position (as nearly as may be) as if the company had not been dissolved or struck off the register”) and, assuming a direction would meet that purpose, only if such direction “seems just”.
  4. In the context of an application for a limitation direction, the issue is the requisite degree of likelihood that a claimant would in fact have issued proceedings if the company had not been struck off the register. If it can be seen that the claimant would not have done so, then a limitation direction is not needed to place him in the same position as if the company had not been struck off. Quite the reverse: a limitation direction would place him in a position that he would not otherwise have been in and would confer an unwarranted benefit on him.


  1. I turn to the question whether Mr Davy can show that he probably would have issued proceedings against the company during the period of its dissolution or presented a winding-up petition against the company before the end of June 2012.
  2. Understandably Mr Davy took his complaint to the FOS, on 28 July 2011. Telephone and written contact followed between the FOS and the company in August to October 2011. Although the FOS stated in its initial letter dated 28 July 2011 that the company should issue a final response within eight weeks, no such response was provided within that time or at all. On 26 October 2011, the FOS requested the company to provide a statement of its case by 9 November 2011. The company did not reply. It was not until 12 April 2012 that the FOS wrote again to the company, probably (as the judge found) because it had received no reply to its previous letter. In early May 2012 the striking off of the company was discovered, which meant that the FOS no longer had a role, and Mr Davy’s complaint was referred to the FSCS.
  3. The question is what would have happened if the company had not been struck off. In answering this hypothetical question, it is appropriate to take account of events before the striking off as well as those after that date. Mrs Pickering started the process for striking off the company in October 2011, but she did not take the step required by section 1006 of notifying Mr Davy as a contingent creditor. If she had done so, it would have alerted Mr Davy to the particular circumstances of the company. The judge accepted Mr Davy’s evidence that he would have objected to the striking-off but would he have done more to pursue his claim and to discover the company’s circumstances than he in fact did?
  4. Notice of the application could have acted as a spur to the FOS to pursue Mr Davy’s complaint against the company with vigour and as a spur to Mr Davy to instruct solicitors and review the options open to him. If he had done so, he or his solicitors might have read the company’s accounts for the year ended 31 January 2011 filed at Companies House and learned of the gratuitous disposal of the company’s freehold property to its shareholders in June 2010. In those circumstances, and with the benefit of legal advice, he would have realised the importance of establishing his claim and presenting a winding-up petition by 21 June 2012.
  5. The problem is that this is no more than speculation as to what might have happened. The only evidence given by Mr Davy is that, if Mrs Pickering had given notice of the application to strike off the company, he would have objected. His conduct after he learned of the striking-off does not suggest that he would have instructed solicitors or otherwise behaved differently. The strong probability is that he would have continued with his complaint with the FOS or transferred his claim to the FSCS.
  6. In my judgment, it is not possible to conclude that he might well have either established a claim or issued proceedings, or presented a winding-up petition, against the company by 21 June 2012. The judge was right when he said that the evidence showed only a small window of opportunity in which Mr Davy might have taken these steps.
  7. I conclude therefore that the judge was wrong to give the limitation and petition directions and the appeal must be allowed.
  8. I do so with some regret, because I consider the conduct of Mr and Mrs Pickering in 2011-2012 in failing to engage properly with the FOS investigation and instead proceeding to strike the company off the register without giving the required notification to Mr Davy as worthy of censure. But, as the judge himself said, the directions sought by Mr Davy cannot, consistently with section 1032(3), be given merely because he has suffered a loss and Mr and Mrs Pickering will otherwise avoid compensating him. Nonetheless, Mr Davy may be able to succeed on his reliance on section 14A of the Limitation Act 1980 and, even without the benefit of a claim under section 238 or 239 of the Insolvency Act 1986, the circumstances in which the client list of the company was disposed of and the freehold property transferred to the shareholders, apparently leaving the company with a deficit, may still be worth investigation by a liquidator.