The
Judicial Committee of the Privy Council delivered its opinion today in
Byers v Chen (British Virgin Islands) [2021] UKPC 4: see
here or
here (
pdf). The case concerned a claim by liquidators against a former director of a company. Of particular interest is what the Board had to say about directors' duties (at para. [92]):
It has been held in a number of cases, correctly, in the Board’s opinion, that a director may not knowingly stand by idly and allow a company’s assets to be depleted improperly: see, for example,
Walker v Stones [2001] QB 902, at 921D-E per Sir Christopher Slade;
Neville v Krikorian [2006] EWCA Civ 943; [2007] 1 BCLC 1, paras 49-51 per Chadwick LJ;
Lexi Holdings v Luqman [2007] EWHC 2652 (Ch), paras 201-205 per Briggs J (as he then was). To the contrary, a director who knows that a fellow director is acting in breach of duty or that an employee is misapplying the assets of the company must take reasonable steps to prevent those activities from occurring".
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