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COMPANY RESTORATION: DISAPPLYING THE LIMITATION PERIOD

Yesterday, in the case of Hawkes v. County Leasing Asset Management [2015] EWCA Civ 1251 the Court of Appeal considered the circumstances in which a direction disapplying a limitation period would be made in favour of a company being restored to the register, under Section 1032 Companies Act 2006. Usually a direction is made in favour of a creditor who is seeking to sue the company.

The Court held that is was bound by its previous decision in Regent Leisuretime v. NatWest Finance Ltd [2015] EWCA Civ 391 which had held that the discretion should only be exercised in exceptional circumstances. It held that fairness would normally require that the company was left to rely on the principles relating to extension of time contained in the Limitation Act itself. The main question to consider was whether the company would have brought the claim if it had not been dissolved, although that principle was not to be slavishly applied in every case.

The Court considered that the possibility, rather than proof, that a liquidator had acted improperly in failing to bring the claim itself was not sufficient to constitute exceptional circumstances.

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