Thursday 1 August 2013

UK: England and Wales: Court of Appeal rejects application of 'sole actor exception' and considers extra-judicial effect of section 213 of the Insolvency Act 1986

The Court of Appeal gave judgment yesterday in Jetivia SA v Bilta (UK) Ltd [2013] EWCA Civ 968 (on appeal from [2012] EWHC 2163 (Ch), [2012] WLR (D) 236). The court unanimously held that section 213 ("Fraudulent trading") of the Insolvency Act 1986 had extraterritorial effect. The court also rejected the argument that the sole actor exception was an established feature of English law for all purposes, noting that it was bound by Belmont Finance Corpn Ltd v Williams Furniture Ltd [1979] Ch 250 and Attorney-General's Reference (No 2 of 1982) [1984] QB 624 to hold that the director of a one-man company could be held liable to account for breaches of fiduciary duties which he committed against the company. The fact that a fraudulent director was the directing mind and will of the company was not an answer to a claim by the company against the director for breach of duty committed against the company.

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