Tradition Financial Services Ltd v Bilta (UK) Ltd & Ors
[2023] EWCA Civ 112
Adrian Charles Hyde & Anor v Sukhwinder Todd
11 June 2024
[2024] EWHC 1423 (Ch)
High Court
The liquidators of a fraudulent company sued the director for contributing to the company's losses. A judge said the case was too complicated to decide without a full trial, and a higher court agreed. The higher court said there were important facts that needed to be explored before a decision could be made about who is responsible for the company's debts.
Key Facts
- •Adrian Charles Hyde and Kevin Anthony Murphy (Appellants) are joint liquidators of Radarbeam Limited (Company).
- •Sukhwinder Todd (Respondent) was the sole director of the Company.
- •The Company was involved in MTIC (Missing Trader Intra-Community) fraud and went into liquidation.
- •Appellants brought a Section 214 Insolvency Act 1986 claim against Respondent for contribution to the Company's assets.
- •The lower court dismissed the application for summary judgment.
- •Appellants appealed the dismissal.
Legal Principles
Summary judgment principles under CPR 24.3: claimant must have no real prospect of success, and no other compelling reason for trial.
CPR 24.3
Rule in Hollington v Hewthorn: judgments in previous civil proceedings are not admissible evidence in subsequent proceedings between different parties.
Hollington v Hewthorn [1943] KB 587
Section 214 Insolvency Act 1986: allows the court to declare a director liable to contribute to a company's assets if they knew or ought to have known there was no reasonable prospect of avoiding insolvent liquidation and failed to take steps to minimise losses.
Insolvency Act 1986, Section 214
Abuse of process: relitigating issues already decided by a competent tribunal can be an abuse of process, particularly when fairness and efficiency are considered.
Secretary of State for Business Innovation and Skills v Potiwal [2012] EWHC 3723 (Ch); Mark John Wilson v Nemish Mehta [2023] EWHC 1214 (Ch)
Outcomes
Appeal dismissed.
The Section 214 claim was deemed unsuitable for summary determination due to fact-sensitive issues regarding the Respondent's knowledge, financial position of the Company, and actions taken. The court also questioned the admissibility of the FTT decision in the Section 214 claim.
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