The Court of Appeal allowed National Asset Loan Management Ltd’s appeal against orders requiring it to pay some of the accounting costs of Middleview Ltd, a dissolved company. The court held that the statutory power to make directions when restoring a company could not be used to resolve a separate dispute over who owed the fees.
The appeal concerned orders made by the High Court alongside Middleview’s restoration to the Register of Companies. The High Court had directed NALM to pay the costs of audited accounts for the years ended March 2010 and 2011, and to share equally with director Garrett Kelleher the costs for 2012 and 2013. It also directed Kelleher to deliver outstanding annual returns and awarded him 75% of his costs in the application. The order had been stayed pending the appeal.
NALM argued that the restoration provision allowed only directions needed to put the company and others, as nearly as possible, in the position they would have occupied if the company had not been struck off. Kelleher maintained that NALM had agreed to fund the accounts while controlling Middleview’s income. Those accounts of the alleged funding arrangement were disputed in affidavit evidence.
The Court of Appeal held that the provision did not create a general power to make whatever order seemed just. Its directions had to serve the statutory purpose of restoring the company and addressing consequences of its removal from the register. The High Court therefore lacked jurisdiction under that provision to decide the accounting-cost dispute as part of the restoration order.
The appeal court also concluded that the affidavit evidence did not entitle the High Court to decide whether NALM’s willingness to pay for the 2010 and 2011 accounts was subject to conditions, or whether those conditions had been met. The evidence showed a dispute on that question. The court said that the 2012 and 2013 costs were clearer: there was no agreement by NALM to pay them, and the High Court’s prediction about what NALM might have done did not establish a legal liability. Any claim concerning an agreement could be pursued in separate proceedings.
The appeal was allowed on the accounting-fee orders. The Court of Appeal did not interfere with the High Court’s conclusions concerning its comments on an affidavit by NALM official Peter Malbasha. The High Court had reconsidered those comments, describing the affidavit evidence as having left a misleading impression while accepting that Malbasha did not intend to mislead. The appeal court considered that response measured and grounded in the affidavits.