Insolvency Act claims
- Thread starter Gyumri
- Start date
- Original Poster
- #3
Claims under the Companies Act and the IA86 - like a.423 - were always considered to be an action on a specialty with a 12 year limitation period thanks to S.8(1) of the Limitation Act 1980.
Not any more. They are not actions upon a specialty and hence there is no statutory time limit for such claims.
Upvote
0
Firstly to clarify, the first line of the Report is:-
" The issue in this case is whether any limitation period applies to applications for minority prejudice under sections 994-996 of the Companies Act 2006."
IA86 was not an issue and, so far as I can see, was not even mentioned.
There never have been time limits applied to s994 claims. No limitation has been extended - nothing has changed with this case save that an attempt to change was fully kicked out by the Supreme Court.
"The High Court held, relying on previous decisions, textbooks and Law Commission reports, that no limitation period applied to claims under section 994. "
Its in their nature (minority prejudice often over a period of time) that time limitations in s994 cases would not be appropriate. In this case the Petitioners wanted to add to an existing claim denial of a bonus issue of shares that occurred more than 12 years previously .
The Respondents did put up a limitation challenge (based, by the way, on a 1985 decision that was nothing to do with minority prejudice) and lost. They appealed to the Court of Appeal and did win but were roundly defeated 4-1 at the Supreme Court who confirmed there never was a limitation to s994 cases.
" The issue in this case is whether any limitation period applies to applications for minority prejudice under sections 994-996 of the Companies Act 2006."
IA86 was not an issue and, so far as I can see, was not even mentioned.
There never have been time limits applied to s994 claims. No limitation has been extended - nothing has changed with this case save that an attempt to change was fully kicked out by the Supreme Court.
"The High Court held, relying on previous decisions, textbooks and Law Commission reports, that no limitation period applied to claims under section 994. "
Its in their nature (minority prejudice often over a period of time) that time limitations in s994 cases would not be appropriate. In this case the Petitioners wanted to add to an existing claim denial of a bonus issue of shares that occurred more than 12 years previously .
The Respondents did put up a limitation challenge (based, by the way, on a 1985 decision that was nothing to do with minority prejudice) and lost. They appealed to the Court of Appeal and did win but were roundly defeated 4-1 at the Supreme Court who confirmed there never was a limitation to s994 cases.
Upvote
0
- Original Poster
- #6
The judgment applies equally to claims under the IA86 and refers to Hill v Spread Trustee Co as I recall - a s423 claim brought by Mr Nurkowski's TIB. The point now established is that claims brought by mere reliance upon a statute is not sufficient to say that they are actions upon a specialty and hence are entitled under s.8(1) of the LA80 to a limitation period of 12 years.
Upvote
0
@Gyumri Its your use of the word 'now' in both your original post and this one that is the issue. This judgment does in no way amount to support for the notion you put forward that there ever has been a limitation period applying to minority prejudice claims which NOW no longer applies. Further it did not deal with IA86 claims in any shape or form.
You refer to a case about s423 of the IA but s423 is about the power of the court to deal with a sale at an undervalue and has absolutely nothing to do with the subject matter of the case. I imagine this was a reference in the dissenting judgment but I haven't had the time to search (for sme reason my screen right now has no search facility) . The judgment is 70 pages long and you are welcome to search and extract any statement that suggests otherwise.
I thank you for alerting the case but lets not misrepresent its significance. Nothing has changed. There are no limitations to worry about.
You refer to a case about s423 of the IA but s423 is about the power of the court to deal with a sale at an undervalue and has absolutely nothing to do with the subject matter of the case. I imagine this was a reference in the dissenting judgment but I haven't had the time to search (for sme reason my screen right now has no search facility) . The judgment is 70 pages long and you are welcome to search and extract any statement that suggests otherwise.
I thank you for alerting the case but lets not misrepresent its significance. Nothing has changed. There are no limitations to worry about.
Upvote
0
Leading Counsel discussing this on LinkedIn appears to challenge that perspective:
Lance Ashworth KC Author
KC specialising in Chancery, Commercial and Insolvency, both domestic and international1w
James Morgan KC it seems unlikely as in Farmizer the Court of Appeal said that the only remedy was for money and therefore it was a claim for money under section 9(1). The Supreme Court did not disapprove that decision like it did the others, saying That conclusion was justified - para 135. There is no “wide discretion as to the nature of the relief” which the court can give under s 214 IA so it does not fall foul of the comments at para 156. The same would seem to apply under s213 IA 1986.
https://www.linkedin.com/feed/updat...899378176,urn:li:ugcPost:7432373518870253568)
Upvote
0
- Original Poster
- #9
The appeal was because Lewison LJ in the CoA stated that there WAS a limitation which was determined by the nature of the relief sought - whether 12 years under s8(1) or 6 years under 9(1) of the LA80. That decision overturned the received wisdom of many years that there was NO limitation period subject to such claims under 996 of the Companies Act.
The Supreme Court's decision reverted the law to what had been the case for many years that there was as you say no limitation period.
Upvote
0
- Original Poster
- #10
I think you are reading it out of context. The limitation Act under 8 or 9 has no application to unfair prejudice petitions simply because such actions are not actions on a specialty. So whether a petitioner is claiming money is irrelevant as far as the LA80 is concerned. I will look again at what was approved in regard to Farmiza Products if anything.Leading Counsel discussing this on LinkedIn appears to challenge that perspective:
Lance Ashworth KC Author
KC specialising in Chancery, Commercial and Insolvency, both domestic and international
1w
James Morgan KC it seems unlikely as in Farmizer the Court of Appeal said that the only remedy was for money and therefore it was a claim for money under section 9(1). The Supreme Court did not disapprove that decision like it did the others, saying That conclusion was justified - para 135. There is no “wide discretion as to the nature of the relief” which the court can give under s 214 IA so it does not fall foul of the comments at para 156. The same would seem to apply under s213 IA 1986.
https://www.linkedin.com/feed/update/urn:li:ugcPost:7432373518870253568?commentUrn=urn:li:commentugcPost:7432373518870253568,7432738134205050880)&replyUrn=urn:li:comment
Upvote
0
Latest Articles
-
The Most Dangerous Moment in Business Is When Everything Is Going WellThey Saw It Coming. They Did Nothing. The Lessons Every Business Owner...- Ozzy
- Updated:
-
AI and Your Business: Useful Tool, Not a Magic WandThere is no shortage of noise around artificial intelligence right now...
- Ozzy
- Updated:
-
Companies House WebFiling security incident: what happened, what to check, and what to do nextCompanies House has confirmed that its WebFiling service suffered a...
- Ozzy
- Updated:
-
Spring Budget 2026: A Quiet Update for UK BusinessesChancellor Rachel Reeves delivered the UK’s Spring Statement on 3 March...
- Ozzy
- Updated:
-
Practical Ways to Make Your Small Business More Resilient (Especially When the Unexpected Happens)Running a business means juggling plenty of things you can plan for and...- UKBF Editor
- Updated:
