In December 2004, Telerate Limited (the Company) entered into a sale and leaseback arrangement (the Arrangement) arranged by the respondent (Mr Hawkes), the Company’s sole director and shareholder, with a view to salvaging the Company’s business before an impending winding up petition initiated by HMRC.
Mr Hawkes was assisted in structuring the transaction by Mr Cook and Mr Kirkpatrick, the third and fth appellants, and arranged to sell the Company’s assets (including a large plot of land) for £225,000 to the second appellant, County Leasing Limited (CLL) of which Mr Kirkpatrick was a director. The intention was that CLL would lease the assets back to two new companies formed by Mr Hawkes, MGP 2 Limited and Quotepool Limited, with their liabilities under the leaseback agreements being guaranteed by Mr Hawkes. County Leasing Asset Management Limited (CLAM) also provided some funding towards the Arrangement. The Arrangement proceeded before the Company was placed into administration in late January 2005.
Of the £225,000 due under the Arrangement, the administrator, Mr Valentine, received only £40,000 and substantial sums appeared to have been paid to, or for the bene t of, Mr Kirkpatrick and Mr Cook. Mr Valentine began investigating the transaction in April 2005, but he was unable to achieve any tangible result for the Company before it was dissolved in April 2009. By that time, Mr Hawkes’ attempt to continue the former business of the Company had failed, and he was made subject to proceedings in the County Court by CLL and CLAM to enforce his guarantees and to claim rental arrears from MGP 2 Limited and Quotepool Limited.
In September 2010, Mr Hawkes applied for the restoration of the Company to the register and in December 2010, just before the expiry of the period in which a claim could be brought, Mr Hawkes applied for a direction that the period for which the Company had been dissolved should not count for limitation purposes. At this point Mr Hawkes had received judgment in the County Court proceedings upholding his defence and counterclaim on the ground that both he and his new companies had entered into the Arrangement in reliance upon misrepresentations for which CLL and CLAM were responsible.
The restoration order was made in October 2011 and the Company was restored for the purpose of continuing its liquidation under a new liquidator, who assigned any cause of action the Company might have against CLL, CLAM, Mr Kirkpatrick and Mr Cook to Mr Hawkes in September 2012.