Case No: A3/2007/1885
Neutral Citation Number: [2007] EWCA Civ 1072
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION, BRISTOL DISTRICT REGISTRY
(HIS HONOUR JUDGE ALLEN QC)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Wednesday, 17th October 2007

Before:

LORD JUSTICE CHADWICK,
LORD JUSTICE TUCKEY
and
LORD JUSTICE MAURICE KAY
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Between:

	CUDDY
	Appellant	
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HAWKES	
Respondent	

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(DAR Transcript of 
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Counsel Name (instructed by Insert Solicitor’s name and address if available) appeared on behalf of the Appellant.
Counsel Name (instructed by Insert Solicitor’s name and address if available) appeared on behalf of the Respondent.
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Judgment
Lord Justice Chadwick:

1.	These are adjourned applications for permission to appeal from orders made on 27 July 2007 by HHJ Havelock-Allan QC, sitting as a judge of the Chancery Division in Bristol District Registry.  Those orders were made in proceedings brought under section 459 of the Companies’ Act 1985, as it then was, in relation to Neath Rugby Limited (“the company”).  The shareholders of that company are Mr Frederick Hawkes and Mrs Simone Cuddy: they each own one share.  Mrs Cuddy claims to hold the share registered in her name as trustee for her husband, Mr Michael Cuddy.  Mr and Mrs Cuddy are respondents to a petition presented by Mr Hawkes on 4 May 2007.  Mr Hawkes is respondent to a cross‑petition issued by Mrs Cuddy on 13 June 2007.  The company has been joined as respondent to both petition and cross‑petition.  It took part in the argument before the judge; but, although represented by counsel on a watching brief on this appeal has taken no part in the argument before us.  

2.	The background to the proceedings is fully set out by the judge, which he delivered on 23 July 2007, [2077] EWHC 1789 (Ch.).  It is unnecessary to rehearse the underlying facts at length in this judgment.  It is sufficient to summarise the position.

(1) Neath Rugby Limited (the company) was incorporated on 9 May 2003 under the name ‘Neath Swansea Rugby Limited’.  It is the owner and manager of Neath Rugby Football Club (which I shall call ‘the club’).  The company acquired the assets of the club from the Welsh Rugby Union (“WRU”) in January 2004.  

(2) The club itself was founded as long ago as 1871 as a traditional members’ club run by a committee; and it continued as such until 1998.  At that date it was in financial difficulties with substantial debts. WRU mounted what was, in effect, a rescue.  

(3) On 28 May 1998, WRU established a private company, Gower Park Limited, to undertake the day-to-day running of the club.  On 30 September 2001, Mr Cuddy was appointed a director of Gowerpark.  On 16 October 2003, Gower Park went into creditors’ voluntary liquidation, with an estimated deficiency of some £750,000.  

(4) The company was incorporated pursuant to an agreement -- which the judge referred to as the Hawkes/Cuddy Agreement -- made between Mr Hawkes and Mr Cuddy in early 2003.  That agreement was reached against the background of the club’s financial difficulties, in the WRU rescue, and the reorganisation of Welsh Rugby by the WRU by the establishment of a new professional league comprising regional sides.  The WRU had specified that the regional sides must be owned by an existing local club or clubs.  One such regional side was the Neath and Swansea Ospreys, owned equally by the club and Swansea Rugby Football Club Limited.  

(5) The terms of the Hawkes/Cuddy Agreement were summarised by the judge at paragraph 23 of his judgment.  He said this:

“The, following terms of the Hawkes Cuddy Agreement, reached sometime between January and the beginning of April 2003, are common ground.  1.  Mr Hawkes and Mr Cuddy would each assume personal liability to repay half of the debt of £180,000 owned by Neath FRC to WRU.  2.  They would establish, as joint co‑owners, a new corporate entity, Newco, to purchase the assets of Neath RFC from the WRU and, thereafter, to own and manage the club.  3. Mr Hawkes would own one share in Newco, and Mr Cuddy would own the other share.  4.  Mr Hawkes and Mr Cuddy would each be entitled to nominate one of the two directors of Newco.  5.  Mr Hawkes would become a director of Newco and Mr Cuddy would nominate Mrs Cuddy as the other director.  6.  Mr Hawkes would concentrate on management of Neath RFC.  7.  Mr Cuddy would concentrate on the management of the regional side, Neath Swansea Ospreys, and for that purpose would be nominated by Newco to act as one of the two directors of the new entity, being established to clearly manage Neath Swansea Ospreys.  8. Any payments to be made by Newco should be authorised by Mr Hawkes and Mr Cuddy.”

(6) The entity established to own and manage Neath Swansea Ospreys was South West Wales Rugby Limited (“SWWRL”), which later changed its name to Neath Swansea Ospreys Limited.  It was incorporated on 10 April 2003.  Mr Cuddy was appointed a director.  The other director, nominated by Swansea, was Mr Roger Blythe.  Following incorporation of the Neath company -- the “Newco” envisaged in the Hawkes/Cuddy Agreement -- Mr Hawkes and Mrs Cuddy were appointed directors of that company.  

3.	The reason why Mrs Cuddy, rather than her husband, was registered as the holder of the Cuddy share in the company -- and the reason why she, rather than her husband, was appointed director of the company -- was that there was concern, arising from advice given by a Swansea solicitor, Mr Newman, that Mr Cuddy might be acting in contravention of section 216 of the Insolvency Act 1986 if he were to be a director of, or to take part in, a creation or management of the company.  Section 216 of the Insolvency Act 1986 was in these terms so far as material:
         “(1) This section applies to a person when a company -- the liquidating company -- has gone into insolvent liquidation on or after the appointed day, and he was a director or shadow-director of the company at any time during the period of 12 months, ending with the day before it went into liquidation.  (2) For the purposes of this section, a name is a prohibited name in relation to such a person if (a) it is a name by which the liquidating company was known in any time of that period of 12 months, or (b) it is a name which is so similar to a name falling within paragraph (a) as to suggest an association with that company.  (3) Except with leave of the court, or in such circumstances as may be prescribed, the person to whom this section applies shall not at any time, in the period of five years, beginning with the day on which the liquidating company went into liquidation (a) be a director of any other company that is known by a prohibited name; or (b) in any way, whether directly or indirectly, be concerned or take part in the promotion formation or management of any such company.”

I need read no more of that section.  The concern that Mr Cuddy might be acting in contravention of section 216 of the 1986 Act was founded on the fact that, as I have said, Mr Cuddy was or had been a director of Gowerpark;  Gowerpark was expected to go into insolvent liquidation, (as it did in October 2003); and it was thought that Gowerpark had traded as Neath RFC.  

4.	From the start of the 2003/2004 season, Mr Hawkes was engaged in running the company and the club, and Mr Cuddy with Mr Blythe was engaged in running Neath Swansea Ospreys.  Mrs Cuddy played no active part in the affairs of the company; Mr Cuddy attended a few board meetings in her place.  Over the years 2004 to 2006 the relationship between Mr Hawkes and Mr Cuddy became strained, to the point where there was a mutual breakdown of trust and confidence.  The judge explained the problem, as he saw it, at paragraph 51 of his judgment:

“In short, it would appear that Mr Hawkes believes that Mr Cuddy is intending building himself an empire at the Swansea Ospreys at the expense of Neath.  If it is permissible to mix avian metaphors, Mr Hawkes sees the Ospreys team as a cuckoo in the nest which will come to dominate the affairs of Swansea and Neath to the detriment of both local clubs.  Mr Cuddy, on the other hand, believes that Mr Hawkes resents the growth of regional rugby and the lion’s share of WRU funding which it now receives.  He is hostile to the ambitions of the Ospreys and will do his best to undermine their success.”

5.	By March 2007, if not earlier, the position in relation to the affairs of the company had reached deadlock.  Mrs Cuddy was refusing to sign the company’s 2004/2005 statutory accounts.  That refusal led in due course to prosecution, conviction and fine, in proceedings before the Cardiff Magistrates.  It is alleged that she was blocking payments due to the company’s suppliers by refusing to sign cheques.  It was in those circumstances that a petition, under section 459 of the Companies Act 1985, was presented on behalf of Mr Hawkes on 4 May 2007.  The section is in these terms, so far as material:

“459(1)	A member of a company may apply to the court by petition for an order under this Part on the ground that company’s affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its members generally, or some part of its members including at least himself, or that any actual or proposed act or omission of the company, including an act or omission on its behalf, would be so prejudicial.”

The section has been replaced by section 994 of the Companies’ Act 2006, in much the same terms.  Nothing turns on that.  Section 461(1) of the 1985 Act provides that:

         “If the court is satisfied that a petition under this part is well‑founded it may make such order as it think fit for giving relief in respect of the matters complained of.”

Then section 461 (2) there are a number of examples of the sort of order that a court may make on a petition; but without prejudice to the generality of sub‑section (1).  

6.	The Hawkes Petition extends over 99 pages.  The judge summarised the allegations in the petition at paragraph [74] of his judgment.  He identified 18 allegations (in groups) which he set out under separate sub‑paragraphs.  In the context of the present appeal, it is necessary only to refer to the first group, which appear in the petition at paragraphs 11.1 to 11.9, under the heading “Mr Newman’s solution – the sham”.  The judge’s summary of the effect of those paragraphs was that:

“The solution reached by Mr Cuddy and Mr Newman to get round the section 216 problem by nominating Mrs Cuddy as a director of Neath was a sham designed to conceal the fact that Mr Cuddy would be a de facto director, telling his wife what to do.”

7.	The relief sought by the petition included, at paragraph (2) of the prayer for relief, a declaration:

“(2)…that in the period of five years, beginning with 16 October 2003, it has been, and remains, unlawful pursuant to section 216(3) of the Insolvency Act 1986 for Mr Cuddy, except with the leave of the court, in any way, whether directly or indirectly, to be concerned or take part in the management of Neath or the carrying on of the business of Neath.”

In that context the reference to Neath is a reference to the company.  The relief sought included, also, at paragraph (11) of the prayer, a share purchase order in these terms:

“(11) A share purchase order pursuant to which Michael Cuddy and/or Simone Francesca Cuddy shall sell, and Mr Hawkes shall purchase, the one issued share in Neath, registered in the name of Simone Francesca Cuddy, for such consideration as the court shall see appropriate and fair.”

8.	The judge summarised the case made in relation to the alleged contravention of section 216 of the Insolvency Act 1986, at paragraphs [71] and [72] of his judgment in terms which, for the purposes of this judgment, I gratefully adopt:

 “[71] In brief, it is Mr Hawkes’ case that he was not advised by Mr Newman that the solution to the section 216 problem which he and Mr Cuddy devised -- of appointing Mr Cuddy to the board of Neath, albeit as Mr Cuddy’s proxy -- was not capable of shielding Mr Cuddy from the contravention of the Act if, through his wife, Mr Cuddy was concerned in any way in the management of Neath.  Mr Hawkes says that until he received legal advice to the contrary from a different legal team on or about 14 April 2007, he believed that the solution was a lawful one and that he could deal properly with Mr Cuddy and indeed was obliged to deal with Mr Cuddy over the affairs of Neath.  The legal advice he received in mid‑April, following disclosure by Mr Newman of his files.  The advice was to the effect that the solution was not a lawful one and that if and insofar as Mr Cuddy had since the liquidation of Gowerpark on 16 October 2003 been in any way, directly or indirectly, concerned in the management of Neath through the medium of his wife, he committed a criminal offence.  The advice went further.  Mr Hawkes was told that the evidence established that Mr Cuddy had acted throughout as a de facto director of Neath and that, by reason of the prohibition in section 216 the Hawkes Cuddy Agreement, had been incapable of lawful performance by Mr Cuddy after Gowerpark was liquidated.  If the agreement did give rise to a quasi-partnership -- and in my judgment it did -- it was a quasi-partnership which was unlawful after 16 October 2003, and that, if it had been a real partnership, would automatically have been dishonoured by the operation of section 34 of the Partnership Act.”

“[72] If justified by the facts, it is a formidable case with remorseless logic.  Mr Cuddy is prohibited from being concerned in the management of Neath, whether directly or through his wife, or through any other nominee.  His position as Neath’s nominee director for Neath Swansea Ospreys is for that reason vulnerable, because without his influence on the board of Neath the board of Neath could decide at any time to remove him.  In those circumstances the only legitimate and practical solution to these proceedings would be if Mr Hawkes is ordered to purchase the Cuddy share at a fair value.”

9.	On 10 May 2007 -- shortly after he presented the petition -- Mr Hawkes made an application for summary judgment.  Relief sought by that application included a declaration in the terms of paragraph (2) of the prayer for relief in the petition: that is to say, for a declaration that it had been unlawful, since 16 October 2006, for Mr Cuddy to be concerned with the management of the company.  The application sought also an order removing Mrs Cuddy from acting as a director of the company.  That prompted Mrs Cuddy’s resignation, at least on a temporary basis, on 23 May 2003: the date on which the application was first heard.  Her place as a director of the company has been taken by Mr Eric Evans, a Cardiff solicitor.  

10.	On 12 June 2003, Mrs Cuddy issued a cross‑petition.  The claim for relief in that petition included the following:

 “(1) That Mr Hawkes do join in the sale by Neath to Mrs Cuddy’s nominee (inaudible) club as defined in paragraph 4, Schedule 2.  The regional rugby agreement between the Welsh Rubgy Union and Ospreys dated 1 September 2004 or to WRU of Mr Hawkes’ share in Ospreys at a fair value to be determined by this court or an independent valuer.

“(2) That Mr Hawkes do purchase Mrs Cuddy’s share in Neath subject to and on the same terms as those set out in the preceding paragraph.

“(3) Alternatively, Mr Hawkes do sell his share to Mrs Cuddy or her nominee at a fair value to be determined by this court.”

The reference of the sale of the share to Ospreys to the WRU must have been, I think, a reference to the company share, rather than Mr Hawkes’ share.  Mrs Cuddy also sought to strike out Mr Hawkes’ petition.  

11.	On the following day, 13 June 2003, Mr Hawkes applied to strike out the claim for relief in the cross‑petition.  So the judge had before him (1) the Cuddys’ application to strike out the Hawkes petition; (2) Mr Hawkes’ application for summary judgment on the petition to the extent indicated; and (3) Mr Hawkes’ application to strike out the principal for relief sought in the cross‑petition.  

12.	The judge dismissed the application to strike out the petition.  There is no appeal from that part of his order.  Insofar as that application had been founded on an allegation of abuse of process, the judge accepted that the issue turned on disputed facts.  The right course, as he said at paragraph [90] of his judgment, was to let the issue go to trial.  The allegation of abuse of process was to the effect that it had been an abuse for Mr Hawkes to seek declarations in relation to section 216 of the 1986 Act in his petition under section 459 of the 1985 Act in the circumstances that, as alleged, he had advanced those claims only in order to embarrass Mr Cuddy.

13.	The petition is due to be heard by Lewison J in Bristol, commencing on 22 October 2007: that is next Monday.  It is listed for 15 days.  The imminence of the petition hearing has led to these applications being brought on with expedition, and to the need to give this judgment ex tempore at the conclusion of the hearing.  

14.	The judge granted summary judgment in relation to part of the relief sought in the petition.  He made a declaration in, substantially, the terms sought in paragraph (2) of the prayer for relief in the Hawkes petition.  The declaration which he made was:

“That, since 16 October 2003, in contravention of section 216(3) of the Insolvency Act 1986, Mr Cuddy has been directly or indirectly concerned and had taken part in the management of Neath and/or the carrying on of the business of Neath by (a) performing the acts of a director of Neath in the name of Simone Francis Cuddy; and (b) using the name of Simone Francis Cuddy as a means of concealing that he has been a de facto director of Neath since 16 October 2003.”

15.	The judge struck out paragraphs (1) and (2) of the prayer for relief in the Cuddy cross‑petition, for reasons which he gave at paragraph [149] of his judgment:

“Counsel submitted in the course of argument on the summary judgment application that the cross-petition cannot survive a finding of a declaration by this court that Mr Cuddy has contravened section 216 either (1) by being a de facto director of Neath; and (2) by being concerned in, or taking part in, the management of Neath by virtue of his activities as nominee director of the Ospreys.  Either conclusion undermines the quasi-partnership which is the foundation of the claim in the cross‑petition.  I agree with him.  I have made the first of the above findings and propose to grant a declaration that, since 16 October 2003, Mr Cuddy has been performing in contravention of section 216(3)(a) and/or (b) of the Insolvency Act by performing the acts as a director of Neath in the name of Mrs Cuddy and using her name as a means of concealing that he has been a de facto director.  In the light of that conclusion, the cross‑petition is, in my judgment, unsustainable in its present form.  However, the applications to strike out the cross‑petition confined the claim for de‑merger relief in paragraph 30 of those grounds and paragraphs one and two of the prayer.  The argument on those applications proceed on that basis.  In the circumstances, I consider the right course is to strike out the claim for de‑merger and counsel for the Cuddys to make what he can of what remains of the cross‑petition in the light of the declaration I propose to grant.”

16.	If the judge had not been persuaded that the cross-petition was unsustainable for the reasons which he set out in paragraph [149], he would not have struck out paragraphs (1) and (2) in the prayer for relief on the basis of the argument advanced tribunal of Mr Hawkes: that there was no real prospect of the court making an order in the terms sought (see paragraph [153] of his judgment).  It is clear, from paragraph [149], that the judge was, at first, mindful to strike out the whole of the cross-petition; but was persuaded that that would not be an appropriate course, given the limited relief that had been sought in the application made in June 2003.  The reasoning which led him to strike out paragraphs (1) and (2) of the prayer would have been of equal application to paragraph (3).  

17.	Events have moved on since the judge made the orders of 27 July 2007.  Applications for permission to appeal were considered by Thomas LJ on the papers on 24 August 2007; and were adjourned for oral hearing on notice, with the appeal to follow, if permission were granted.  It is those applications which have come before us.  In the course of argument we indicated that we would grant permission to appeal and, accordingly, we have heard the substantial appeals.  Pre‑trial directions were given by Lewison J on 5 October 2007, in preparation for the trial that is due to start on Monday of next week.  There is no sealed order recording those directions, but a minute of order -- prepared by counsel and substantially agreed between the parties -- has been put before us.

18.	The final recital in that minute of order is in these terms:

         “And upon it being confirmed by Mr Hawkes that he will not contend at trial, that a relevant factor in the exercise of the court’s discretion to grant him the relief claimed in the cross‑petition is any disability that may be imposed on Mr Cuddy under section 216 of the Insolvency Act.”

It was agreed, in the course of the hearing before us, that the words, “the petition or” should be inserted before the words “cross‑petition” in that recital.  The effect is that, on the hearing of the petition and the cross‑petition, the judge will not be asked to exercise his discretion to grant relief, or as to the relief to be granted pursuant to that discretion -- on the basis of any disability that may now be imposed upon Mr Cuddy under section 216 of the Insolvency Act.  

19.	That position has been reached, as we were told, in the circumstances that Mr Cuddy sought to persuade the judge to allow him to join in the cross-petition an application for permission to act as a director under section 216 of the Insolvency Act 1986.  It will be remembered that sub‑section (3) of that section begins with the words “Except with leave of the court”.  It is a curious feature of this case that no application under section 216(3) was made in 2003 when the problem first emerged.  Be that as it may, the position for the future could be cured by a successful application under that section.  The judge recognised that such an application would put in jeopardy the trial date.  Mr Hawkes and his advisers clearly recognised that as well; and, in those circumstances -- in order to avoid the possibility that there might be an adjournment of the trial for the purpose of considering an application under section 216(3) of the 1986 Act -- Mr Hawkes, through his advisers, agreed he would not take the point that relief should on the petition or cross-petition be influenced by any existing disability imposed under S. 216.  That does not, however, it is said, prevent Mr Hawkes from relying -- for what it is worth -- on the declaration as to past contravention of section 216 which was obtained from the judge.  

20.	There are, therefore, two appeals that we need to consider.  The first is an appeal against that part of the judge’s order which made a declaration on Mr Hawkes’ petition.  The second is an appeal from that part of the other order made by the judge on 27 July 2003 by which he struck out paragraphs (1) and (2) in the prayer for leave in the cross‑petition.  

21.	In my view, the judge was wrong to make a declaration in the terms that he did.  He was wrong (as it seems to me) for two reasons: first, because a declaration in those terms was premature; and, second, because to make a declaration went further than was necessary to serve a useful and proper purpose in the proceedings.  

22.	The declaration, as it seems to me, was premature in that one of the issues raised by the application to strike out the Hawkes petition was that the presentation of that petition had been an abuse of process of the court.  The judge held that that issue should go to trial.  If there is to be a trial on the question whether the petition seeking a declaration was an abuse of process of the court, it would pre‑empt the outcome of that trial, to make the declaration that is sought.  If the judge were to hold, after trial, that the presentation of the petition was an abuse, then there would be no petition before the court on which such a declaration should have been made.  On that ground I would set aside the declaration.  

23.	Further, the declaration goes further than is necessary to achieve the very sensible case management objective which the judge identified.  What the judge wanted to achieve was to ensure that the questions of fact which he had decided - in relation to the issue whether Mr Cuddy had acted in contravention of section 216 of the Insolvency Act - should not be re‑litigated at the trial.  That objective could have been achieved simply by a direction that the trial be conducted on the basis of those findings of fact: that is to say, on the basis of the facts in relation to the allegation of contravention of section 216(3) of the Insolvency Act 1986 by Mr Cuddy which the judge had found in his judgment.  Mr Chivers, who appears for the petitioner Mr Hawkes on this appeal - but who did not appear as counsel below - accepts that, for practical purposes, the matter could be dealt with in the way that I have indicated.  Accordingly, for my part, I would set aside the declaration which the judge made, and replace it by a direction in the terms which I have just indicated.

24.	The second issue is whether the judge was right to strike out paragraphs (1) and (2) of the prayer for relief in the cross-petition.  Although the issue can be put in that way -- because that was the order which the judge actually made -- the judge’s reasoning goes to the whole of the cross‑petition; so that, if the judge was right in the reasons which he gave there is, as it seems to me, to be no answer to an application at the start of the trial that the costs petition be dismissed, unless, of course, the judge is willing to allow an amendment to the cross‑petition so as to raise a new case for relief under section 459 of the 1985 Act at the suit of Mrs Cuddy.  

25.	The judge’s reasons in section [149] include the sentence “the cross‑petition is in my judgment unsustainable in its present form.”  That invites attention to the allegations made in the cross‑petition.  At paragraphs 26, 27 and 28 the allegations pleaded are these: (26) breakdown of the relationship of trust and confidence between Mr Cuddy and Mr Hawkes has broken down; (27) In the event of such breakdown, a state of deadlock exists at meetings of the directors and of the shareholders of the company; (28) there has been, since about June 2006, a state of deadlock in relation to the affairs of the company.  Those paragraphs must be read in the context of the other allegations made in the cross-petition: in particular, the allegation at paragraph 14 that, in the conduct of the affairs of the company, Mr Hawkes owed Mr Cuddy a duty of good faith, in relation to the conduct of the affairs of the company, including (i) a duty to consult Mr Cuddy in relation to the affairs of the company; and (ii) a duty to provide Mr Cuddy with such information as he should reasonably require in relation to the affairs of the company.  Those duties are said to arisen out of the Hawkes/Cuddy Agreement; which is pleaded in paragraph 11 of the cross‑petition.  The petition then goes on to give particulars of the breaches of duty of good faith by Mr Hawkes in relation to Mr Cuddy.  But the foundation of the allegation in the petition - as in most petitions based on an allegation of quasi-partnership - is that there was a duty of good faith on Mr Hawkes to cooperate with his co‑venturer.  The difficulty with that pleading is that the acts, about which complaint is made, are essentially acts of failure to consult; and, as it is put in paragraph 20, “determination to exclude Mr Cuddy from any involvement of the affairs of the company”, those are acts which the restriction imposed by section 216(3) requires.  In other words, if Mr Hawkes behaved in the way in which he is said to have behaved, he was doing no more than excluding Mr Cuddy from being concerned, directly or indirectly, for taking part in the management of the company.  He was doing what section 216(3) would require him to do if a breach of section 216(3) by Mr Cuddy was to be avoided.  

26.	It was said on behalf of Mr Cuddy, that a duty to consult and a duty to provide information required in relation to the affairs of the company, does not run counter to the restriction in section 216(3)(b).  I am unable to accept that submission.  It seems to me that the whole purpose of consultation and provision of information would have been to enable Mr Cuddy could influence the affairs of the company.  Indeed, that was the basis of the Hawkes/Cuddy Agreement, made in early 2003.  That agreement was a lawful agreement at the time when it was made; but it became impossible to perform it lawfully, following the insolvent liquidation of Gowerpark on 16 October 2003.  The obvious solution to the problem -- as I have indicated -- was to make an application under section 216(3) of the Insolvency Act for the leave of the court for Mr Cuddy to be involved in the affairs of the company.  But, for whatever reason, Mr Cuddy and his advisers did not choose to make that application.  In those circumstances, the matters complained of in the particulars in the cross‑petition seem to me to be an inevitable consequence of the restriction imposed by the section; and, as the judge thought (in my view correctly), that is an insurmountable hurdle in pursuit of relief under section 459 on the basis of the cross-petition as it stands.

27.	The remedy, now, is to seek to amend the cross-petition so as to plead an effective case that the agreement, as originally envisaged in April 2003, has been overtaken by events and cannot be carried out as the parties intended that it should be carried out.  Whether to allow such amendment at this stage is, of course, a matter for the judge; and whether, if so amended, it would be right to grant relief is again a matter for the judge.  That is not a matter for this court.  It is enough to decide, as I do, that the cross‑petition as it stands is not sustainable.  The judge was right to appreciate that; and so was entitled to strike out paragraphs (1) and (2) of the prayer.  For those reasons I would dismiss the cross‑appeal, while allowing the appeal on the order made on the petition, in the respect that I have indicated.

Lord Justice Tuckey:
 
28.	I agree.

Lord Justice Maurice Kay:
 
29.	I also agree.

Order:   One of two applications granted.