The Welsh Ministers v Price & Anor

Factual and Procedural Background

The appeal concerns the procedural question of when it is permissible and appropriate to join a third party to proceedings for the restoration of a dissolved company to the register of companies. The company at the centre of the proceedings, Company A, was struck off the register on the application of its sole director and shareholder, Appellant. Subsequently, Company A was restored to the register by an order of the Registrar, which included undertakings by the Appellant. This order was later varied to release the Appellant from those undertakings and impose new ones.

The restoration was sought to enable Company A to bring copyright infringement proceedings against various parties, including Appellee, a government entity. Appellee applied to be joined to the restoration proceedings to challenge the validity of the restoration orders and the assignment of copyright, alleging misrepresentation, non-disclosure, and breaches of undertakings by the Appellant.

The Registrar initially granted the application to join Appellee. The Appellant appealed this decision to a High Court Judge, who set aside the Registrar’s order and dismissed Appellee’s application to be joined. This judgment is the subject of the current appeal.

Legal Issues Presented

1. Under what circumstances is it permissible and appropriate to join a third party to proceedings for restoration of a dissolved company to the register of companies?
2. Whether the Appellee, as a potential defendant in subsequent litigation, is directly affected by the restoration order so as to justify joinder under Civil Procedure Rules (CPR) 19.2.
3. Whether alleged misrepresentations, non-disclosure, and breaches of undertakings by the Appellant justify the joinder of the Appellee to challenge the restoration and variation orders.

Arguments of the Parties

Appellee's Arguments

• The court was misled on the restoration application about the true purpose of restoration, ownership of copyright, and intended litigation targets.
• The Appellant breached undertakings by assigning copyright to another company and commencing litigation beyond the scope of the undertakings.
• The Appellant made false representations regarding the ownership and enforcement rights of the copyright.
• The restoration and variation orders should be revoked or declared invalid, and the assignment of copyright set aside, leaving ownership with the Crown.
• Joinder is necessary because the Appellee is directly affected by the restoration order and the subsequent litigation.

Appellant's Arguments

• The Appellee is not directly affected by the restoration order as their position is no worse than before the company was struck off.
• The right to challenge restoration orders lies with the Registrar of Companies, not third parties.
• Breaches of undertakings are properly addressed by contempt proceedings, not by revocation of the restoration order.
• The alleged misrepresentations and non-disclosures would not have materially changed the court’s decision to restore the company.
• Joinder of the Appellee is not desirable and would lead to unnecessary costs and delays.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by considering the scope of CPR 19.2, which permits joinder of a party if it is desirable to add them to resolve matters in issue. The court interpreted “in dispute” broadly as “in issue,” consistent with established case law allowing joinder post-judgment in certain circumstances.

Registrar Barber had allowed joinder on the grounds that the Appellee could assist the court in determining whether the restoration order was obtained by misrepresentation or breach of undertakings, and because the Appellee was directly affected by the restoration order, particularly due to the retrospective validation of a copyright assignment executed post-dissolution.

However, the High Court Judge reversed this, relying heavily on precedent distinguishing third parties who are “directly affected” by restoration orders from those who merely wish to argue that the revived company’s claims have no merit. The Judge held that the Appellee fell into the latter category, as restoration did not create new rights or liabilities but merely restored the status quo ante.

The court rejected the argument that only the Registrar of Companies may raise issues of misleading evidence or breaches of undertakings, affirming that no statutory provision limits such challenges to the Registrar alone.

Nevertheless, the court emphasized policy considerations limiting joinder in restoration proceedings to avoid opportunistic and costly litigation by numerous third parties with indirect interests. The court found no real prospect that the Appellee could succeed in persuading the court to revoke the restoration or variation orders, noting that breaches of undertakings are typically sanctioned by contempt proceedings rather than revocation.

The court further reasoned that the Appellee was not directly affected because the restoration did not create new liabilities; the Appellee’s position was the same as if the company had never been struck off. The retrospective validation of the assignment only changed the identity of the party entitled to enforce copyright, not the Appellee’s substantive rights or liabilities.

Consequently, the court concluded that while it has the power to join third parties in appropriate cases, this was not one such case, and the joinder application should be refused on the basis that it was not desirable under CPR 19.2(2).

Holding and Implications

The court DISMISSED the appeal against the High Court Judge’s decision to set aside the Registrar’s order joining the Appellee to the restoration proceedings and to dismiss the Appellee’s application for joinder.

The decision means that the Appellee will not be joined to the restoration proceedings and cannot challenge the restoration or variation orders within those proceedings. The restoration and variation orders remain valid and effective. The ruling confirms the limited scope for third-party intervention in restoration applications, reinforcing that only parties directly affected by restoration orders may be joined. No new precedent was established beyond reaffirming existing principles and the court’s discretion under CPR 19.2.