The claimant brought an application to vary a security for costs order made against it. The claimant was a BVI-incorporated company which was struck off the register of BVI companies at the end of last year. Accordingly, Smith J considered the effect of this striking off on the application.
Where an English company is struck off the register, it will be dissolved once a notice has been published in the Gazette. The court will then dismiss proceedings in which the company was a party or (if more appropriate to do so), it might stay the proceedings pending an application to restore the company to the register (see Stearns Fashion v Legal & General ).
However, Smith J noted that the law of the place of incorporation of a company will determine the effect on a company's capacity of an event such as being struck off the register. The evidence on the BVI position was that a company which is struck off can still exist for a further 7 years (at which point it is automatically dissolved), and can continue to carry on legal proceedings that were started before the company was struck off.
Accordingly, the application could not be dismissed on the basis of the company's striking off. A further issue which arose was whether anyone could have authority to act on the company's behalf and whether the former director/shareholder of the company still had authority to act. The judge considered the application on the assumption that she did, although had the issue been of crucial importance, he would have required further argument on the point.