BL-2021-002293 - [2025] EWHC 678 (Ch)

An issue concerning limitation arises because the events relied upon by claimant in support of the claim occurred around 20 years ago. The claimant accepts that the primary limitation period had expired pre-issue of the claim form in relation to each of the claims pursued in the particulars of claim and pleads reliance on section 32 of the Limitation Act 1980, which provides as material as follows:

The question whether a fact has been concealed is a matter of ordinary English, and there is no requirement of a duty to reveal that information, and for the concealment to be deliberate the fact must be intentionally hidden or withheld: see Potter v Canada Square Operations Ltd [2024] AC 679 at [98]–[99], Lord Reed PSC. The focus in the parties’ submissions was on the claimant’s knowledge, although Mr Flohr did not accept that he had deliberately concealed any material facts from the claimant or from Mr Horlick.

The test as to when time starts to run in a case where deliberate concealment is alleged against the defendant has been set out by the Court of Appeal in Gemalto Holding BV v Infineon Technologies AG [2023] Ch 169, following the decision of the Supreme Court in FII Test Claimants in the FII Group Litigation v Revenue and Customs Comrs [2022] AC 1. Although the FII case was about a mistake of law, it was made clear that section 32(1)(b) was to be treated consistently with section 32(1)(c): see at [44] and [47].

Before this decision, the test as to the knowledge which the claimant must possess before time will run in a case where there has been deliberate concealment was known as the ‘statement of claim’ test. This meant that time would not run until the claimant had discovered every essential element of the claim which had been concealed: see Gemalto at [49], where Sir Geoffrey Vos MR said this could no longer be so in a concealment case. Then, at [50], (and bearing in mind that Gemalto concerned an allegation of an unlawful cartel):

The Master of the Rolls then summarised the position in this way, at [53]:

Because of the correspondence that passed in 2013 between lawyers acting for Mr Horlick and Mr Flohr, a question also arises as to whether time stopped running for the purposes of FCGPL’s pursuit of the claim during the time when it was struck off the Guernsey Register of Companies.

In English law, the effect of a company being restored 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: Companies Act 2006, s.1032(1). Mr Cohen points out that Companies (Guernsey) Law 2008, s.371(7) is to similar effect. In his skeleton argument, Sir Geoffrey intimated an argument that in the absence of expert evidence, the court could not be satisfied that this provision falls to be interpreted in the same way as English Law, but this argument was not pursued at the hearing. The claimant thus accepts the application to FCGPL of the principle that, once restored to the Guernsey register, it was deemed to have remained in existence throughout the relevant period. The parties also agreed that I should proceed on the basis that the application of Guernsey law as to the effect of the restoration of a company to the register is the same as English law on that question.

The interaction between section 32 of the Limitation Act 1980 and the restoration of the company, and the question how knowledge is to be attributed to the company, was considered by the Court of Appeal in Bilta (UK) Ltd v Tradition Financial Services Ltd [2023] Ch 343. An appeal against that decision has been heard by the Supreme Court (and, indeed, was heard at the same time as the hearing of the present application), but judgment has not yet been handed down.

In Bilta, the liquidators of the claimant companies alleged that the defendant had dishonestly assisted in breaches of fiduciary duty by the directors of the companies, those directors having been apparently involved in missing trader intra-community VAT fraud. Two of the companies had been dissolved and later restored to the register after the alleged fraud had occurred. As the primary limitation period had expired when the claims of those companies were issued, a question arose whether the knowledge of the (allegedly fraudulent) directors of those companies could be attributed to it during the period between the dissolution of the companies and their restoration to the register. Albeit with somewhat different reasoning, the Court of Appeal upheld the decision of Marcus Smith J that it would be contrary to the scheme of the Limitation Act for the time that a restored company spends in enforced non-existence not to count towards the running of time for limitation purposes. On the basis of an assumption (not shared by the Court of Appeal) that the claimant companies had the minimum number of ordinarily competent directors in place at all times, he concluded that they could with reasonable diligence have discovered the alleged fraud, and so held the claims to be statute barred.

Lewison LJ set out at [125]ff, by reference to the development of the authorities, the effect of the restoration of a company. First, the deeming provision in s.1032(1), that the general effect of an order for restoration is that the company has continued in existence as if it had not been dissolved or struck off, is aimed only at the inevitable consequences of restoration. Secondly, it does not follow from the restoration of the company that the directors in post at the date of dissolution are assumed to have remained in office throughout. So, at [131] he said:

Lewison LJ went on to discuss the power of the court to make a direction under s.1032(3) of the Companies Act 2006, making such provision as seems just for placing a restored company and others in the same position (as nearly may be) as if the company had not been dissolved or struck off the register. That power is not directly relevant to the present case, as FCGPL was restored in Guernsey such that the power does not apply (and it was not suggested to me that a direction might be sought in Guernsey under the parallel local legislation or that, if such a direction were to be obtained, it would have extra-territorial effect). What I do consider to be relevant to the present case is that the power to give a direction is not exercisable when the court finds that the company would probably have failed to pursue its claim in time anyway (see at [145]). In any event, ‘fairness will generally require that the company, like any other claimant faced with a limitation defence, should be left to meet that defence by recourse to the Limitation Act 1980, rather than by a direction under section 1032(3)’: see at [147], citing Regent Leisuretime v National Westminster Bank plc [2003] EWCA Civ 391 at [90], Jonathan Parker LJ.

Where a s.1032(3) direction is sought, it is a question of asking what would have happened after the date of dissolution, if dissolution had not occurred: Bilta at [145], citing Hawkes v County Leasing Asset Management Ltd [2016] 2 BCLC 427 at [33] (Briggs LJ). Lewison LJ then said that the answer to the question is a matter not of speculation or assertion, but of evidence, to be decided by the court on the balance of probabilities, citing Davy v Pickering [2017] Bus LR 1239 at [60], [71] (David Richards LJ). The conclusion in the Court of Appeal in Bilta was stated this way, bearing in mind that this was an appeal following trial, not after an application for summary determination: