A Carey Olsen regulatory team consisting of Guernsey partner Mark Dunster and associate Luke Sayer, have had a significant success for their client, a leading financial services business (the “Liquidator” or “Applicant”), by successfully making an application for the restoration of a Guernsey company – previously a property holding company (the “Company”) - pursuant to the Companies (Guernsey) Law, 2008, as amended (the “Companies Law”).
On 3 April 2008, at an Extraordinary General Meeting of the Company, the members passed a special resolution to voluntarily wind up the Company and appoint the Liquidator. The Company was wound up as at 27 January 2010.
Unfortunately, due to an administrative oversight (by third parties and not the Liquidator) when dealing with the conveyances of property held by the Company, at the time of the winding up, the Company continued to hold legal title to a property in England (the “Property”). It was not until sometime after the administrative oversight that the ultimate beneficial owner of the Company brought this matter to the Liquidator’s attention. Thereafter, the sole purpose of restoring the company was to allow a subsequent transfer of the property from the Company to the ultimate beneficial owner.
When deciding whether or not to restore a company to the Register of Companies, and without prejudice to any other matter it may have regard to, the Court shall have regard to a number of factors including inter alia, the circumstances in which the company was struck off; and whether it would be just and equitable to restore the company to the Register (section 371(3) of the Companies Law).
However, although not specifically stated as one of the factors the Court “may have regard to”, from their experience of previous applications of this nature, the Carey Olsen team is aware that the Court may seek information as to any assets of a company and the legal ownership of the same. Under Guernsey law, where a company is dissolved all property and rights then vested in it or held on trust for it shall, unless Her Majesty’s Receiver-General directs otherwise, become bona vacantia belonging to the Crown (section 369 of the Companies Law).
In this case, whilst the Company is a Guernsey registered company, the Property is situated in England. Accordingly, English law applies lex situs in determining title to immovable property such as the Property in question here. A legal opinion from English solicitors was able to provide evidence to the Court that should the Company be restored, it will become the legal owner of the Property and can thereafter, pursuant to English law, distribute the Property to the ultimate beneficial owner.
Following detailed evidence pertaining to the background of the Company, the liquidation, and the purpose of the restoration, the Royal Court was minded to restore the Company to the Register.
However, as detailed above, although a consideration of a company’s assets is not specifically listed as a factor, the Court will have regard to when considering whether to restore it (albeit the Company must satisfy the solvency test if it is restored), in this case the presiding Judge, the Deputy Bailiff, directly sought clarification of the position in relation to the Property in England. With the assistance of Advocate Dunster’s court submissions, the Deputy Bailiff was satisfied with the evidence presented in the form of an English legal opinion.
The Judgment is a welcome reminder that the Court has a wide range of powers that include an investigatory nature by exploring factors that although not specifically listed within applicable statute will affect the very order(s) that are sought. As was also previously the case when the Carey Olsen team successfully applied to restore a separate Guernsey company with an Italian property as its sole asset, it was of significant assistance to the Court that the evidence included an opinion from a lawyer qualified in the jurisdiction where the property is held. In this case, failure to provide such evidence could foreseeably have led to the adjournment or even, dismissal of the application to restore and the unwanted element of delay and/or wasted costs for the client.