I'm not sure exactly what the problem is?
Are they claiming that your ATPL theory has expired? In which case assuming you passed all exams with 18 months of the first sitting and no more than 6 sittings total the 36 months from which to obtain your CPL and IR starts from the passing of the
last ATPL exam.
If you completed ATPL theory in October 2010 then you should have until October of this year to complete CPL and IR. You say you already have done this so I don't really see what the problem is.
Also what is this about issuance of a "frozen ATPL"?
There is no such thing as such as far as the actual licences are concerned. The CPL should have been issued after you passed that and then the IR attached to it when you passed the IR. Why do they (the CAA presumably?) make a reference to you having to "retake the CPL skills test" in their answer. Even if it needed renewing I don't see why the skills test would ever need to redone?
All sounds rather odd to me...
Edit to add: I assume you are doing the modular course at OAA?