Chancery Division
Kings Court Trust Ltd and others v Lancashire Cleaning Services Ltd
[2017] EWHC 1094 (Ch)
2017 April 12
Judge Hodge QC sitting as a High Court judge
CompanyRegister of membersRectificationSole director of company dyingNo surviving director or company secretaryCompany continuing to tradeExecutors of deceased applying to omit deceased member from register and enter themselves in his placeWhether sufficient cause to rectify registerCompanies Act 2006, s 125

The sole director of the defendant company died. There was no surviving director of the company and no company secretary. The company continued to trade but its bank account was frozen. Under the company’s articles the deceased’s shares passed by operation of law to the claimants as his personal representatives. However, there was no provision which permitted the personal representatives to appoint a director where, as a result of death, the company had no shareholders or director. Probate was still to be granted. The claimants, in their capacity as executors of the deceased, brought a Part 8 claim, seeking an order, pursuant to section 125 of the Companies Act 2006, to omit the deceased member from the register and to enter themselves in his place.

On the claimants’ application—

Held, application granted. In a normal case, directors of a company could not be said to be in default in refusing to enter on the register the name of the personal representatives of a deceased member without production of a grant of probate or letters of administration in respect of the deceased member. However, in determining the question of whether there was sufficient cause to omit a deceased member from the register, and to enter his executors in his place, the court was entitled to have regard to all of the circumstances and the claimants’ circumstances were quite exceptional. Given that there was no power, without the intervention of the court, to enter the executors in the register or for any director to be appointed in place of the sole deceased director, that there was no company secretary and also the imminent failure to be able to draw sufficient funds to pay wages and salaries to employees and to account for unpaid value added tax due to the revenue, it was inappropriate to wait until the grant of probate had been obtained. Section 125(3) recognised that a court may, on an application under section 125, decide questions relating to the title of someone in the position of the present claimants. Normally a company should await the grant of probate but, in this case, it would be too late for company if it did. In the circumstances, which were wholly exceptional, and in order to ensure the survival of the company, the court could and should exercise its power under section 125 of the 2006 Act to order rectification of the register (paras 14–17).

Neil Berragan (instructed by Taylors Solicitors) for the claimants.

The defendant company did not appear and was not represented.

Sarah Addenbrooke, Barrister

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